5.26.2020

Coinbase Maturity time as a disincentive for 51% attack on merged mined coin

So you want to make your coin able to be merge mined with another more popular cryptocurrency.  But you are afraid that one large pool will start merged mining and you will have over 51% of your hashpower from one pool.  Don't fret.

Why this would be a problem:

Lets say you didn't have merged mining and this large pool decided to shift to mining your coin to see if they could make more money on your coin than the big coin they were mining before.  They figure out they are making less so they give up mining your coin because they thought it sucked and are going to go back to the big coin.  They would sell all their coins they earned from your blockchain then privately fork the blockchain so no one else can mine just to troll the blockchain.  This seems to happen often with small coins that share an algorithm with a large coin.  Merged mining helps prevent that by letting the large pool mine both at once so they don't get bored of mining your coin.

But lets say they get bored of your coin anyway even with merged mining and decide to sell all the coins they earned on your blockchain and then 51% attack you.  How can we counter that?  Well we could increase the coinbase maturity time.  Instead of waiting a few dozen blocks and they can sell everything they have earned and attack the chain, if we make that maturity time several months long (say 9 months), thousands and thousands of blocks, then it is really hard for them to quickly sell everything they have earned.

We can think of a long coinbase maturity time as a sort of de facto Proof of Stake (PoS) but one that is as easy to implement as changing a single number in the code.  Making a long coinbase maturity time forces miners to be heavily invested in your coin so they won't attack it, even if one pool has over 51% of the hashrate, the chain will still likely be safe.

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