[Cryptography] Blockchain without proof of work

[jamesd at echeque.com]

On 04/01/2019 02:29, Phillip Hallam-Baker wrote:
> 
> The next obvious technical topic to tackle is blockchain. Right now, 
> blockchain is using more electricity than Ireland and minting several 
> billion worth of new currency to process fewer transactions than a 
> moderately busy CostCo.

Obviously, blockchain should work on proof of stake.

I have proposed the following system.

Stake is registered with peers, of which there are a few hundred, which 
tend to be very large machines with very high bandwidth connections, but 
stake is owned by clients, who are hosted by peers.  Clients tend to be 
small machines with low storage and low bandwidth connections.  Client 
signatures can move stake from one peer to another.  Stake is client 
money, so that power is ultimately in the hands of the clients, though a 
peer somewhat resembles a bank from the point of view of clients.

Paxos protocol with peers holding fifty percent of stake get to decide 
on which transactions are committed and which are rolled back.

I also have a plan for making this system anonymous, through transaction 
pooling, where each transaction is a pool of payments made by several 
public keys to several other public keys, and the block chain does not 
reveal which key in the pool were paying which other key in the pool, 
just the total going in and out, but I intend to publish the full 
details when I have something working.

Bitcoin payments are pseudonymous, but when money goes in and out of the 
system, apt to connect pseudonyms to true names, and when bitcoin goes 
from one nym to another, reveals connections between nyms.  Pooling 
would hide connections between nyms, because you would not know which of 
the many nyms in the pool was paying which of the many other nyms in the 
pool.

Because the pools cannot be very large, and will often be quite small, 
this still leaks some information, giving people trying to follow the 
money clues and hints, but it leaks far less information than the 
bitcoin blockchain.