# Bonded Mining: Difficulty Adjustment by Miner Commitment

## TL;DR

Bonded Mining introduces a proactive difficulty adjustment algorithm that uses miner commitments secured by bonds to maintain consistent block times and resist manipulation, outperforming traditional reactive DAAs in simulations.

## Contribution

The paper proposes a novel proactive DAA using miner commitments and bonds, with a statistical detection method for deviations, improving stability over existing DAAs.

## Key findings

- More effective at maintaining target block time than Bitcoin Cash DAA
- Detects hash rate deviations with high sensitivity and low false positives
- Supports miners with at least 1% of total hash rate in simulations

## Abstract

Proof-of-work blockchains must implement a difficulty adjustment algorithm (DAA) in order to maintain a consistent inter-arrival time between blocks. Conventional DAAs are essentially feedback controllers, and as such, they are inherently reactive. This approach leaves them susceptible to manipulation and often causes them to either under- or over-correct. We present Bonded Mining, a proactive DAA that works by collecting hash rate commitments secured by bond from miners. The difficulty is set directly from the commitments and the bond is used to penalize miners who deviate from their commitment. We devise a statistical test that is capable of detecting hash rate deviations by utilizing only on-blockchain data. The test is sensitive enough to detect a variety of deviations from commitments, while almost never misclassifying honest miners. We demonstrate in simulation that, under reasonable assumptions, Bonded Mining is more effective at maintaining a target block time than the Bitcoin Cash DAA, one of the newest and most dynamic DAAs currently deployed. In this preliminary work, the lowest hash rate miner our approach supports is 1% of the total and we directly consider only two types of fundamental attacks. Future work will address these limitations.