Bergstake – distributed consensus
Bergstake represents the right to sign blocks in crypto-currency block-chains. Block signers receive rewards for securing the network. Rewards can be new coins and/or transaction fees. Bergstake differs from typical coin-stake, in that bergstake is non-transferable and lasts-forever *.
The bergstake concept is a generalization of “Proof-of-Skill” described by Jay Berg in the Satoshi Fantasy whitepaper (1). As each coin is created, whether by proof-of-work, pre-mine, or fantasy football points, the private-key holder of those new coins, automatically receives and equal amount of bergstake. Even if those new coins are transferred away, the bergstake remains.
Bergstake is an alternative distributed consensus mechanism, to Bitcoins proof-of-work mining. Bergstake attempts to solve known issues in all proof-of-stake blockchains.
Bergstake blockchains have knowledge of alternative forks. This enables a “proof-of-double-mining”, which has ability to destroy bergstake and its recent block reward. The risk of losing bergstake and recent virgin coins, is incentive to mine on only the “real” blockchain fork. This core feature fixes the “nothing-at-stake” flaw in proof-of-stake blockchains.
The algorithm that chooses the next block-signer can be gamed in other proof-of-stake blockchains. This technique, known as “costless simulation” or “stake-grinding”, entails a type of “mining” of the block data until its produces a hash that gives rights to sign the next block. Since all bergstakers are known in advance, a block-signer selection algorithm that mitigates grinding can be used. One technique, employed by Nxt, is to use the hash of the previous two signers to select the next signer. Another technique involves choosing the next N signers based on current signer and a pseudorandom number.
Other problems arise, as Peter Todd asks, “can I use stake to get more stake”. Bergstake can only be used to generate coins, not more bergstake.
Bergstake is currently being developed within the new upcoming Breakoutcoin. There will be a proof-of-work period where block signers will get bergstake in addition to the normal Breakoutcoin reward. After the initial phase, Breakoutcoin will be secured and will reach distributed consensus using pure “bergstaking”. Block signers will continue to receive the same new coin reward as in the proof-of-work phase. Once all coins have been distributed, bergstakers will be rewarded with transaction fees only.
*bergstake can be lost by Proof-of-double-mining. Bergstake can be transferred, as an inheritance for example, by providing the original private-key
– Distributed Engineered Autonomous Agents : Satoshi Fantasy