Mining Collaterials

Miner Collaterial

In order to participate in the consensus process, the vast majority of permissionless blockchain networks necessitate an initial expenditure of resources. The greater the influence an entity has on the network, the greater the share of total resources it is required to own, whether in the form of real assets or staked tokens, in order to maintain that influence (collateral).

It is necessary for HyperCube to achieve security through resource allocation. Due to the fact that HyperCube mining employs just commercial hardware (as opposed to ASIC technology) that is inexpensive to amortize and easily recycled, the protocol cannot rely solely on the hardware as the capital investment at stake for attackers, as would be the case with ASIC technology. Additionally, HyperCube makes use of upfront token collaterals, similar to proof-of-stake systems, that are equal to the amount of storage hardware that has been committed to the project.

Thus, you have the ideal combination: in order to attack a network, not only must the hardware be purchased, but also large numbers of the token must be purchased in order for the attack to be successful.

HyperCube contains two unique collateral systems to satisfy the multiple collateral requirements while lowering the load on miners to a bare minimum.

Among the three types of collateral are

• Type 1: collateral for the initial pledge,
• Type 2: collateral for the block reward, and
• Type 3: collateral for the hardware rigger.

The first is a one-time HyperCube commitment that a miner must make for each sector in which they are participating.

The second is a mechanism for minimizing the initial token investment by allowing block rewards to be progressively vested over time.

The third option attempts to strike a balance between the motivations of hardware riggers and miners, potentially allowing miners to distinguish themselves in the market. The remainder of this section goes into deeper depth on each of these topics..