How ​​Pools Verify Work Done on Ethereum

When multiple nodes on a blockchain network agree on the state of the ledger, it is crucial that all nodes have verified that they are not simply copying and pasting values. This ensures the integrity and reliability of the blockchain. However, a common mistake is how pools verify work done on Ethereum.

To understand this, let’s dive into the basics of what happens when nodes agree on the state of the ledger on an Ethereum network with a proof-of-work (PoW) consensus algorithm.

Proof-of-work: The energy-based consensus

In a PoW-based system, nodes compete to solve a complex mathematical problem. This process requires significant computational power and energy consumption. When a node finds a valid solution to the puzzle, it broadcasts the state of the ledger as “confirmed” on its local network.

However, if someone were to try to withhold or manipulate certain data without being detected by other nodes (a “solution withholding attack”), they would have an advantage over honest validators. This is because their malicious actions could go unnoticed until a majority of nodes re-verify and agree that the data was manipulated.

How ​​pools verify work done on Ethereum

A pool, in this context, refers to a group of nodes or miners that work together to validate transactions and create the blockchain. When a node in the pool finds a valid solution to the mathematical puzzle (i.e. agrees with the state of the ledger), it broadcasts its findings.

Here’s what happens next:

• Verification: The solution is verified by other nodes in the pool, which use specialized software to verify the validity of the solution.

• Chain Propagation: When a node finds a valid solution, it updates the blockchain by broadcasting the change to all other nodes on the network.

• Consensus Update: Each node verifies the updated state and broadcasts the necessary changes to the pool.

Ensuring Integrity

To prevent solution-holding attacks, pools must be designed with security in mind. Some key features of Ethereum’s proof-of-work consensus algorithm include:

• Multi-Signature: Pools typically use a multi-signature setup, where multiple nodes verify solutions before allowing them to propagate to other nodes.

• Network-Wide Verification: Verification occurs across the entire network, making it difficult for malicious actors to tamper with data without being detected.

Mitigating Solution Hold

While solution hold attacks are still possible in Ethereum’s PoW-based system, pools can mitigate this risk by:

• Using a secure multi-signature setup: Pools typically use strong multi-signature setups to prevent individual nodes from tampering with the solution.

• Implementing node verification: Regular updates and security audits ensure that each node is fully verified before participating in the consensus process.

Conclusion

In summary, pools on Ethereum verify the work done through a combination of:

• Setting up multiple signatures

• Network-wide verification

• Secure software updates

To prevent solution hold attacks, pools should be designed with strong security features and regular audits to ensure that all nodes have verified the state of the ledger.

Further Reading

• Ethereum Whitepaper: “Ethereum: A New Architecture for Decentralized Applications”

• Ethereum Core Development Guide

• Preventing Solution Hold Attacks