Guldencoin, a national cryptocurrency in the Netherlands, has developed a “readjustment” algorithm called DELTA that adjusts the difficulty in mining block chains. The algorithm helps miners generate blocks at regular intervals.
The DELTA readjustment algorithm maximizes the amount of hash power miners have to generate blocks. In doing this, the readjustment algorithm addresses the mining difficulty caused by profit-switching pools. These are centralized mining pools that switch between coins based on the level of coin profitability.
The pool normally waits until the chain has low block difficulty (a low hash rate from other miners). The pool then has high hash power and starts mining and finds as many quick blocks as possible until the level of difficulty starts to rise. Once the difficulty rises to a point that quick blocks are no longer possible, the pool leaves to mine on a different coin.
DELTA won’t prevent pools from coming in and claiming blocks, but it will make it less profitable for them to do so, said Jason van Heerden, a Guldencoin development project manager. DELTA works by using a weighting system determined by behavior in previous block counts and times as opposed to a pre-determined adjustment percent.
Many smaller coins have resorted to merged mining, switching to new algorithms that are currently ASIC-resistant, or going full “proof of stake” to evade the long block times caused by jump pools, according to van Heerden. There are also other issues that currencies confront that DELTA can address.
A bad readjustment algorithm can either result in too many quick blocks, which can compromise security if the difficulty does not adjust correctly or cause extremely long blocks that will slow down transaction speeds. The latter is the norm with profit switching pools if a currency does not have enough dedicated hashing power. The level of mining difficulty depends on various factors, van Heerden said. For larger coins that have a lot of dedicated hashing power, it is less of an issue. For smaller coins, it can be a big issue.
One example of a coin that will benefit greatly from DELTA would be goldcoin, which is currently experiencing gaps of greater than 16 hours and is meant to be averaging a block every 120 seconds, van Heerden said. DELTA can also be used with any “proof of work” algorithm.
In a future Guldencoin release, DELTA will support a multiple algorithm implementation. A multiple algorithm implementation helps maintain the block chain operation and adds more security to the network. DELTA in combination with a multiple algorithm will be a perfect fit, according to van Heerden.
Having multiple algorithms opens up mining to a wider variety of miners. More miners will be able to participate in securing the network. The three algorithms that will be used are Sha 256, Scrypt and X11.
One of the main goals of DELTA is to bring back dedicated mining to Guldencoin.