One last farting shot so the ignoramuses here can ponder respecting those who are smarter than they are.

Decentralized Proof-of-Work Ordering

Some decentralized databases such as cryptocurrencies or smart contracts require consensus on the ordering of events.

Bitcoin provides consensus on ordering with a Bzyantine fault tolerance of up to 50% of the network proof-of-work hashrate, or as low as 33% due to the economic advantage of selfishly mining the block chain rewards. Bitcoin employs proof-of-work puzzles to identify whom is authorized to produce the next block of events and consensus is the longest chain of blocks which contains the greatest cumulative proof-of-work difficulty.

Consuming a resource such as proof-of-work to produce a chain of event blocks is necessary to disambiguate conflicting events in competing chains by choosing the longest chain. Otherwise there would be unresolvable conflict over which of the conflicting events is valid.

Given a longest chain rule consensus, block periods of events are required because otherwise for example in a DAG there is a divergent proliferation of unmergeable chains induced by conflicting events, e.g. cryptocurrency double-spends. One need only graph some complex scenarios to visualize this effect. In any other attempt to consume a resource to prove a consensus on ordering of events that does not use a longest chain rule, irreconcilable ambiguities will proliferate due to lack of a globally consistent rule for disambiguating double-spends. Globally in this context refers to the fact that nodes of a decentralized network will disagree about the order in which events arrived because propagation can not be made consistent.

This paper analyzes the flaws in Bitcoin's algorithm which:

* effectively make it centralized over time
* limit scalability and transaction rate
* cause an irresolvable tension over the ideal block data size
* induce a Tragedy of the Commons on the economics of funding mining
* deny instant confirmations
* allow less than 50% Byzantine fault tolerance (due to selfish mining)

I propose a new design to resolve all these issues that retains the core principle of a proof-of-work block chain.