A number of people - most recently Gavin Andresen - have speculated that cloud hashing operations may in fact be ponzi schemes that don't actually own the hashing power they claim to own. The claim is that the customers upfront purchase of hashing power is simply kept and used to pay off existing customer profits rather than actually being used to purchase mining equipment.

We can use merkle sum trees to detect this fraud cryptographically: 1) Put the MH/s paid for by each account into a merkle sum tree, each with a customer supplied unique identifier. (like their email address) This allows the customer to verify that the hashing power they paid for has been included in the total hashing power claimed. 2) Mark blocks found by the operation publicly so they can be associated with the specific cloud mining operation; putting the merkle sum tree root hash into the coinbase or an OP_RETURN output would be ideal. This allows anyone to verify that the hashing power claimed corresponds to the # of blocks actually found. -- 'peter'[:-1]@petertodd.org 0000000000000000201d505432d708aa2edb656f6fe34d686b37d4747e5ff389

signature.asc

Description: Digital signature

------------------------------------------------------------------------------

_______________________________________________ Bitcoin-development mailing list Bitcoin-development@lists.sourceforge.net https://lists.sourceforge.net/lists/listinfo/bitcoin-development