Theoretical foundations

In this section, various theoretical concepts are introduced to the reader that have been developed with the introduction of different altcoins in the past few years.

Alternatives to Proof of Work

The Proof of Work (PoW) scheme in the context of cryptocurrency was first used in bitcoin and served as a mechanism to provide assurance that a miner had completed the required number of work in order to find a block. This in return provided decentralization, security, and stability for the blockchain. Also, this is the main vehicle in bitcoin for providing decentralized distributed consensus. PoW schemes are required to have a much desired property called progress freeness, which basically means that the reward for consuming computational resources should be random and proportional to the contribution made by the miners. In this case, some chance of winning the block reward is given to even those miners who have comparatively less computational power. The term progress freeness...