HiveMine, the new “buzzword” in blockchain security. But what is it? and how will it revolutionize the industry?

 

The price of Litecoin Cash has soared 65% just in the past week as news is circulating that HiveMine is set to officially launch in September around the world, where a public testnet will be made available for the community in the first half of the month before the mainnet is officially released. It will become the first cryptocurrency in history to utilize the latest cutting-edge technology to help provide the ultimate protection from 51% attacks and double spending as well as ensuring the sustainable and long-term security of its public distributed ledger. But what is HiveMine?

HiveMine is an alternative method of mining to proof-of-work and proof-of-stake, that instead uses an agent-based block minting priority contest to validate transactions on the blockchain. It essentially works like any traditional mining rig but instead of physical hardware that you use to mine, you have virtual bees that you can release at any time to help secure the network. These bees then mature and find blocks to mine during their lifecycle, and the bees that are most successful also earn themselves associated block rewards. Read more how HiveMine works here.

 

“What’s really most impressive about HiveMine is that it is the most democratized and decentralized distribution system we have in blockchain security to date. Not only that is solve the underlying problems of 51% attacks but it opens up mining to all the community. It’s a win win.”

To understand how HiveMine will revolutionize the industry, one must delve into reasons into why blockchain security is important. In general, cryptocurrencies use what’s known as cryptographic protocols to avoid the need for a third party (i.e. banks) to validate transactions. These protocols: proof-of-work, proof-of-stake…etc, allows for transactions to be recorded on a public distributed ledger, and then through a rigorous selection process, transactions get validated. For example, person A wants to send something to person B. Every node on the public ledger records this same transaction (person A sends person B, 100 LCC) and if all these records come to an agreement, then the transaction gets validated (person B receives 100 LCC from person A).

 

Each cryptographic protocol have slightly different ways that it records and validates transactions, but they all want to achieve the same goal, which is to establish a consensus on the public distributed ledger (i.e. agreeing on which recorded transactions are legitimate to validate). Once a consensus has been reached, the transaction then gets pushed through and new block is built on top of this existing block — giving every node their own new identical copy of the ledger and then the process of validating a new transaction starts again. With enough validated transactions, these blocks then become chained on top of one another and form what’s referred to as the “blockchain”. As prior blocks cannot be destroyed or altered, the blockchain will continue accumulating blocks for all new transactions. Therefore, the longer the blockchain is, the more historical transaction data it contains.

Now, there are a few ways to ensure that transactions within the blockchain are legitimate. For instance, each protocol has some costs and weighting associated with validating transactions, so that only a select group of “trusted” people with a certain requirement can make additions to the blockchain. For proof-of-work, these people (often referred to as miners) require specialized mining hardware in order to add to the blockchain, and the more energy that is put into this process, the more voting power within the consensus these miners have. Differently, in proof-of-stake, although specialized mining hardware is not required to add to the blockchain, the cost element comes from the fact that coins must be held in a bound wallet (so these people are called forgers), and the more coins held the more voting power within the consensus this forger has. This means that for the proof-of-work protocol, miners will need to input computational “work” in the network to validate transactions, and for proof-of-stake, some form of “staking” is also required by forgers to validate transactions.

Without this cost and weighing factor, everyone would be able to record transactions and push them onto the public ledger simultaneously, resulting in the network not knowing which transactions are legitimate, and this leads to many different validations of the same transaction, which then causes short orphan chains (an disorganised blockchain where miners work on multiple chains at once with no penalty). These factors allow the public distributed ledger to reach a consensus much more effectively and ensures that the blockchain remains accurate. However, this security mechanism comes with it also a design flaw, as will be discussed in the next section below.

 

Double Spending & 51% Attacks

As mentioned previously, if some type of cost is required to validate transactions on the blockchain, then theoretically, with enough computational power and money, one could override this security mechanism and dominate the overall network consensus — this is often referred to as 51% attack, which is when an malicious actor controls more than half of the network consensus to attempt to double-spend a transaction (rewriting the public ledger so that they can influence which transactions can be validated). For example, one could theoretically spend cryptocurrency then erase the transaction so it appears it never happened — that’s if they control more than half of the consensus.

This highlights an fundamental peril of any given coin in cryptocurrency. For proof-of-work protocols, any coin secured with a given block hashing algorithm is highly susceptible to a 51% attack, since it is expected that the total amount of hashpower available across all coins using the same hashing algorithm will dwarf the amount of hashpower typically available on the marginal coin. For proof-of-stake protocols, any coin secured with a given stake algorithm is also susceptible to the same 51% attack, since it is expected that a few of the nodes on the network can still be monopolized, and therefore, those that have the most coins can effectively control most of the mining.

In the case for cryptocurrencies that use the proof-of-work protocol, this risk is exacerbated by the fact that Bitcoin, the largest cryptocurrency also uses this same protocol, and has already a vast existing amount of hashpower available already. This means that should Bitcoin miners choose to mine any other smaller coin within proof-of-work, they would already have large computational hash power to use and will effectively own a large percentage of the consensus within that smaller coin. Alternatively, for cryptocurrencies that use the proof-of-stake protocol, this risk is also exacerbated by the fact that Ethereum and several other large cryptocurrencies that use this protocol have extremely high market shares compared to other smaller coins, and thus, if these coins are sold and bought in for those smaller coins, the holder of the new coin will equivalently own a larger proportion of the network consensus within that smaller coin.

The case for HiveMine, the ultimate blockchain security

HiveMine is an alternative form of block contest whereby the right to produce a block is secured by an agent working on behalf of a user. This simple yet intricate architecture allows for a new dexterity as a system of trust that goes beyond being a simple database that stores transactions.

How does this work? Think of HiveMine like this — imagine there are two identical people at a basketball court.

The first identical person has 1 basketball, and the second identical person has 10 basketballs. Both people are asked to throw as many balls in the hoop. Keep in mind that this is the first time both have ever encountered a basketball before, which of the two would you pick to get more in?

The second person would be more likely. This is because in reality, human beings are conditioned to learn from their mistakes. So if the second people misses their first few attempts they can adapt themselves and adjust their hand-ball coordination to get the rest of the balls in the hoop. The first person however has only one single chance at finding the hoop so is unlikely going to beat the second person.

Let’s now think of this same thought experiment with a new variable: the second person will not be able to learn from their previous attempts. Still keeping in mind that this is their first ever encounter with a basketball, both identical people are asked to throw as many balls in the hoop.

For this case, the chance element of throwing is exactly the same between both people. But how? Because both people are identical there is no way to really distinguish who is “capable” at throwing more between the two, and because the second person cannot learn from their previous encounters, every new attempt acts as if it is being reset. This creates the effect that the second person has 1 ball to start with at every time.

With this new variable, what we’ve essentially created is a situation where no matter how many basketballs you have — theoretically the second person has the same chance at finding more basketballs in the hoop as the first person. This is because throwing basketballs in the hoop is an extremely speculative process, whereby it’s possible that the first person will get their basketball in straight away but the second person can miss all their respective 10 attempts, or the other way around. All that happens with more basketballs is that you have more “guesses” at finding the hoop but the chance element between the two people always will remain the same.

In both these thought experiments, we have considered the fundamental differences between Proof-of-Work/Stake and HiveMine and how HiveMine reaches true decentralization compared to both. Firstly, proof-of-stake is the first thought whereby the more basketballs you hold the better chances you have — i.e. the more coins you hold in your wallet the more voting power you have in the mining process. Or in regards to Proof-of-Work, the more computational hash power you have the more weight you have in the mining process. The main problem with the first thought is that as people get richer or if people have more mining power, they inevitably gain more weight in the mining process and this then gives them more rewards. It is almost impossible for these protocols to produce a distribution that doesn’t skew strongly in favour of large stakeholders or powerful computational miners, without much action from those stakeholders or miners themselves.

HiveMine is the second thought whereby the chance element at finding a block will always remain the same — i.e. no matter how many bees you hold, every bee has the same chance at finding a block as other bees. This ultimately means that HiveMine is the ultimate blockahin security as the requirement to invest in bees means the inherent inequality of proof of-stake, where the richer get richer, is mitigated. In addition, by introducing an actual monetary cost to the process of producing blocks, HiveMine provides a superior “proof of commitment” to proof-of-stake whereby it becomes difficult for any individual to dominate the overall network consensus. Furthermore, HiveMine requires no investment in powerful hardware and so it democratises the mining process better than in proof-of-work schemes making it difficult for attacks based on computational power to occur.

In summary, the additional chain-work dimension introduced by HiveMine secures the blockchain indefinitely from 51% attacks, as although someone may control 51% of the bee population, this doesn’t necessarily mean that all those bees will start finding consecutive blocks to mine. Alongside this, benevolent bee keepers have vastly greater visibility into an incoming attack and so can leverage their holdings to assist in attack prevention. HiveMine ultimately ensures the sustainable and long-term security of its public distributed ledger than Proof-of-Work as well as Proof-of-Stake.

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References

Litecoin Cash (2018). THE HIVE: AGENT-BASED MINING IN LITECOIN CASH (Whitepaper). Available at: https://hive.litecoinca.sh/whitepaper.pdf [Accessed 31July. 2018].