Difficulty Prediction for Proof-of-Work Blockchains

In Proof-of-Work (PoW) based blockchains, difficulty control is an important concept. It largely determines the stability of the block produce time (BPT). However, the current difficulty control algorithm in Ethereum has two problems. First, the difficulty control algorithm cannot trace the hashrate fast enough. Thus, the BPT has a large variance and cannot converge to the targeted time. The second problem is that the targeted time is uncontrollable. The BPT cannot be targeted to arbitrary given value. To mitigate these two problems, we propose a linear predictor based difficulty control algorithm. Based on the relationship between the hashrate, the difficulty and the BPT, the prediction based algorithm has much better stability and controllability in an ideal situation. Although the improvement is reduced in the real situation, the proposed prediction based algorithm is still a better choice than the existing Ethereum one. In conclusion, the linear prediction can be a powerful tool in the design of difficulty control algorithms of blockchains.