Proof of Provision: Improving Blockchain Technology by Cloud

Computing

Matthias Pohl, Abdulrahman Nahhas, Sascha Bosse and Klaus Turowski

Faculty of Computer Science, University Magdeburg, Germany

Keywords:

Blockchain, Consensus, Proof Algorithm, Proof of Provision, Cloud Computing.

Abstract:

Blockchain technology is mainly used in so-called cryptocurrencies and smart contracts. From a technological

point of view, securing these applications requires a lot of computing power, which results in high energy

consumption. The reason for this is the proof of work algorithm integrated in most cases. In order to promote

the problem of high energy consumption and the sustainable use of cloud computing resources, this paper

presents a consensus concept for use in a blockchain. We also present the classiﬁcations for discussion and

give an outlook on a future evaluation.

1 INTRODUCTION

Even though the hype about blockchain technology

and Bitcoin & Co. has died down in the meantime

there are still many data centers around the world that

dig for cryptocurrencies. The energy requirements of

Bitcoin mining industry alone estimated to be nearly

43.44 TWh yearly (Kosharnaya et al., 2018), which

correspond to the demand of entire countries, as for

instance, Peru, Hongkong, or Iraq (International En-

ergy Agency, 2017). Another study predicts that the

energy demand will even increase in the future to

reach 7.67GW (de Vries, 2018), which is nearly con-

sistent with the demand of Austria 8.2 GW (Interna-

tional Energy Agency, 2017). Yet from a worldwide

perspective, a testimony presented to the U.S Senate

committee on energy and natural resources suggests

that the bitcoin mining process alone constitutes 1

percent of the overall worldwide energy consumption

(Narayanan, 2018). The associated CO2 emissions

of mining processes of cryptocurrencies can be ob-

viously compared with the CO2 emissions of entire

countries, as for instance, Bolivia or Portugal (Stoll

et al., 2018).

The reason for this is the integrated use of a hash-

ing algorithm and a deposited puzzle, whose difﬁculty

increases with the increasing computing capacity of

the actively mining participants in the Bitcoin net-

work.

A blockchain network basically consists of par-

https://coinmarketcap.com/currencies/bitcoin/#charts

ticipants, computing units, which are located in a

peer-to-peer network. Each participant has a key that

uniquely identiﬁes it and a key pair to perform autho-

rized activities on the network. In the case of a cryp-

tocurrency, it is possible to transfer virtual amounts

of money in this network. With the appropriate au-

thorization, a participant can place a transaction of an

amount to another participant in the network. To en-

sure that a participant can only transfer amounts that

he has received once before, it is only possible to cre-

ate a transaction on the basis of an older transaction.

If the transactions are posted correctly, you can

also prevent amounts from being transferred more

than once. This is made possible by the prooﬁng al-

gorithm and the consensus. After a certain period of

time, the proof algorithm determines a checksum of

the current accrued and prioritized postings so that

these can no longer be changed or deleted. In addi-

tion, the result of the checksum calculation of the last

time window is added. In the initial bitcoin technol-

ogy, the proof of work is used here. The checksum

is calculated using a hashing algorithm. In order to

prevent a malicious recalculation of old transaction

bundles, the difﬁculty of the calculation is inﬂuenced

by constraints.

The block of transactions and checksum is then

distributed in the network and recognized and re-

distributed by involved participants. If a block has

been evenly distributed in the network, a consensus

is reached on the current bookings. If two blocks are

randomly distributed at the same time, both are ini-

tially accepted by all. As soon as a branch can no

Pohl, M., Nahhas, A., Bosse, S. and Turowski, K.

Proof of Provision: Improving Blockchain Technology by Cloud Computing.

DOI: 10.5220/0007765605230527

In Proceedings of the 9th International Conference on Cloud Computing and Services Science (CLOSER 2019), pages 523-527

ISBN: 978-989-758-365-0

523

longer be continued in a coming time window, it is

no longer used. Some participants in the network pur-

suit the calculation of the proof, others participate the

conﬁrmation of the consensus and yet others only use

the transaction functions as normal participants. The

distribution ensures that each participant can moni-

tor the entire accounting process by viewing the dis-

tributed ledger (Drescher, 2017; Wattenhofer, 2016).

Furthermore, it is possible to link the transactions to

conditions that are checked by so-called oracles (e.g.

data feeds, user trigger). This allows contracts to be

mapped (Szabo, 1997; Wood, 2014).

In this way, it is possible to replace classical ﬁ-

nancial institutions, since no third party is necessary

anymore to conﬁrm the transaction process and the

correctness of the account balances. There exist the

hyptothesis that the Bitcoin network consumes more

energy than the booking and vending systems of ﬁ-

nancial institutions. For instance, Swiss banks con-

sume 8.4GWh per year with 3233 devices (Aebischer,

1998). Nonetheless a reduction in energy use due to

environmentally harmful factors is desirable.

In this paper, we want to present an approach to

reducing energy consumption and the sustainable use

of the data centers that have been established so far.

This work does not claim to introduce a new cryp-

tocurrency or a new detailed blockchain technology.

In section 2, we give an overview of various prooﬁng

algorithms currently used by many cryptocurrencies

networks and conceptually presented in the literature.

In section 3, we will again explain the fundamental

problem of the further use of the proof of work and

also highlight the problems with alternative proof al-

gorithms. We present a solution concept in section 4

and discuss the integrated approaches as well. Finally,

we describe an evaluation concept and give a short

summary as well as an outlook for future research.

2 RELATED WORK

In this chapter we will present an overview of existing

proof concepts. We will use a literature review with

the key terms ’blockchain’ and (’proof of’ or ’consen-

sus’). We were able to assign the following essential

concepts from the literature.

2.1 Proof of Work

The proof of work algorithm has been known since

the initial idea of the bitcoin network. According to

cryptoslate

, it is now used by most blockchain tech-

nology. The principle has already been explained in

https://cryptoslate.com/cryptos/proof-of-work/

the introduction, since it originates from the basic idea

of the technology. A set of transactions, together with

the hash value of the last transaction bundle and an

additional variable, is re-input into a checksum cal-

culation. The checksum must meet a certain condi-

tion to be accepted by the blockchain. By chang-

ing the variable, you can change the checksum. The

process is also called hash puzzle. The many calcu-

lations generate the high computing effort. A block

that is to be newly created is always appended to the

longest chain of the blockchain if there is a branch

(Nakamoto, 2008).

2.2 Proof of Stake

The proof of stake goes back to the developments of

the PeerCoin (King and Nadal, 2012) and the Black-

Coin (Vasin, 2014). In this concept, the process

of checksum calculation is changed by limiting the

puzzle to be solved by the equation proo f hash <

coins ∗ age ∗ target. The target is predeﬁned per cal-

culation round, while the age of coins depend on min-

ing user’s stake. Furthermore, a bookkeeper who cal-

culates the checksum must have an amount of coins

to get a lighter puzzle. Participants who have a high

amount of coins can solve the puzzle with a higher

probability. In the original variant, the age of the coins

was taken into account. A further development of the

proof of stake is the delegation of the checksum cal-

culation to selected participants per calculation block

(Kiayias et al., 2017). The chain with the most used

coin days or used coins will be added continuously.

2.3 Proof of Importance

The proof of importance begins with the determina-

tion of the importance of the participants in the net-

work. Each participant who holds coins in the net-

work for a certain time and takes a topologically suit-

able position in the network can thus increase its im-

portance. The importance serves to determine the par-

ticipants who are allowed to calculate the next block.

The calculation of the checksum is based on the proof

of work, but the difﬁculty of the puzzle is so reduced

that the puzzle can be solved in about 60 seconds. The

continuation of a branch depends on the total impor-

tance in it (NEM, 2018).

2.4 Proof of Luck

The checksum is calculated at the proof of luck us-

ing a randomized procedure. Each participant who

starts the calculation receives a time delay, which is

CLOSER 2019 - 9th International Conference on Cloud Computing and Services Science

524

randomly determined for each participant. The net-

work communication is optimized because the ran-

dom component does not send so many checksum re-

sults through the network. The proof of luck contains

a proof of work. If a branch is formed, the chain with

the greatest accumulated luck is used in the next step

(Milutinovic et al., 2016).

3 PROBLEM

We have already highlighted the problem of increased

energy consumption in the Bitcoin checksum calcula-

tions in the introduction. Although, Bitcoin mining

has its own specially designed data centers, there are

other cryptocurrencies that run in standard data cen-

ters. The energy consumption of datacenter industry

witnessed a gigantic growth in the last years. Statisti-

cal analysis suggests a total growth of roughly a hun-

dred percent between 2005 and 2010 with a steadily

increasing behaviour (Koomey, 2011). Clearly, the

associated CO2 emissions of datacentre’s operations

reported an immense growth and observed to be the

most accelerated growing carbon-footprint compared

to various IT-ﬁelds (Avgerinou et al., 2017). Accord-

ingly, the worldwide energy consumption and its as-

sociated carbon-footprint have triggered extreme anx-

iety on an international level. In the meantime, this

problem stands in the top agendas of many coun-

tries. For instance, the European Union has intro-

duced many new regulations in addition to some ini-

tiatives and research to reduce the proportion of data-

center’s operations of CO2 global emissions (Avgeri-

nou et al., 2017).

In this paper we address the enormous environ-

mental pollution caused by the high energy consump-

tion of Proof-of-work-cryptocurrencies and the sus-

tainable use of data centers.

The various concepts for changing the consensus

in section 2 have always been motivated by the so-

lution to the same problem. The computing time of

the proof of work should be reduced to regulate en-

ergy consumption. However, the approaches do not

really do justice to the claim, since only the puzzle

was simpliﬁed and the possible circle of authorized

persons for the checksum calculation was regulated.

The proof of work still has to be executed. Further-

more, in some concepts (e.g. proof of stake) partici-

pants are preferred, so that there is a risk of third party

creation.

We therefore continue to address the abolition of

the proof of work from the consensus mechanism

and the avoidance of preferential treatment of partici-

pants.

4 CONCEPT

We now present a consensus concept of a blockchain

technology that can be used to provide cloud comput-

ing instances in data center. As a starting point we

consider a peer-to-peer network in which transactions

should take place.

Participants. The participants of this blockchain

technology are primarily cloud providers, who always

keep the ledger of the blockchain available and can

provide cloud computing instances in their own data

center. If a subscriber does not fulﬁll the second con-

dition, he is only active in the network as an auditor of

the blockchain. Other participants initially take on the

role of the customer who commissions a cloud com-

puting instance.

Based on familiar blockchain concepts, all partic-

ipants are equipped with a unique ID and a key pair

for authorization.

Smart Contract. The provision of cloud comput-

ing instances by a provider to a customer is recorded

in a smart contract. This contract speciﬁes the time

of availability, equipment and the amount due. The

amount due is transferred at the end of the contract

period or at deﬁned intervals. The smart contract se-

cures the future receipt of the amount.

Availability is checked via a software component

running on the cloud computing instance. At short

intervals, the software component sends a signal to

the smart contract. If a user is active on the instance,

the software sends a proactive status. If the instance

is available, the status is transmitted as active, oth-

erwise as inactive. If an instance is inactive for too

long, deﬁned rules (e.g. ﬁnes, invalidity of contract)

will apply.

Software Component. The software component con-

sists of a module that transmits the status and an ad-

ditional module that calculates the checksums of the

blockchain transactions. While a customer is using an

instance, the software sends a customer signed com-

bination of identiﬁer (e.g. MAC address) and times-

tamp. This ensures that the user is really using the

instance. If the instance is in sleep mode, only a

provider signed variant can be sent. Otherwise, the

smart contract receives the message that the instance

is inactive. The second module of the software is de-

scribed in more detail in the next section.

Block Creation. A new block containing a set of

transactions can be created in a predeﬁned time win-

dow (e.g. every 60 seconds). If a time limit is

reached, a time-based random value is formed by the

blockchain. However, this value can only be read

from a current blockchain, i.e. the signals of all run-

ning Smart Contracts must be current. This random

Proof of Provision: Improving Blockchain Technology by Cloud Computing

525

value is used to select one of all providers that hold

smart contracts with the status ’proactive’ from the

blockchain. This provider in turn selects a customer

who is then commissioned to calculate the checksum

of the transaction block. The checksum of the last

block, a time stamp and the provider and customer ID

are added to this block. The checksum of the new

block is then encrypted again by the customer and

transmitted to the blockchain via the provider. For

the checksum calculation, a hash value function can

also be used in this concept. A user who has been

commissioned with the calculation does not have to

accept this order. If this is the case, the system waits

for the next time window and the next random value

determination. A reward for the calculation serves to

motivate the execution.

Synchronisation. The new block is split after cre-

ation in the network and added to the blockchain. Due

to overlapping calculation times and the simultaneous

distribution of a block in the network, branches of the

blockchain can occur. If this is the case, the string

with the most recent end will be used when creating

the next block.

5 DISCUSSION

We ﬁrst take a look at the extent to which the concept

meets the addressed problems. The calculations of the

checksum in the consensus could be reduced from in-

deﬁnitely many to one. Further, if a speciﬁc resource

is not booked, the data center could shut down the re-

source. This means that the energy consumption as-

sociated with this can be signiﬁcantly reduced com-

pared to other consensus procedures. By distribut-

ing the calculation task, centralization of transaction

management is avoided, so that the second problem is

also addressed.

Due to the many status transfers, however, a high

network load is to be expected. Optimizing trafﬁc

data or reducing transmissions by changing the time

pattern could help.

Furthermore, a general change in cloud provision-

ing could be made. The control of the provisioning

could run completely over the blockchain, so that the

provider only hangs his systems in the blockchain net-

work and only takes care of the hardware. Differ-

ent provision strategies could be integrated into the

blockchain technology to ensure a standard in quality

over all smart contracts. A detailed modelling of the

smart contracts would also make it possible to inte-

grate different service level agreements (SLA). Con-

trol mechanisms necessary for veriﬁcation can be in-

cluded in the software component. The current design

is only designed for cloud instances such as desktop

units, as proactive use is always assumed. Further

mechanisms have to be developed to check different

instance variants.

In the following section we give an outlook on

how to proceed.

6 CONCLUSION

For further investigating our hypothesis and evaluat-

ing the presented concept, we will rely on the De-

sign Science Research evaluation pattern presented in

(Sonnenberg and vom Brocke, 2012). Brieﬂy, the au-

thors presented a generalized evaluation pattern that

comprises four evaluation stages, which lies between

four main activities: problem identiﬁcation, design,

construction and use. The presented argument ﬂow

and the analyzed literature strongly points out the

extensive use of computational resources for min-

ing process due to the inefﬁcient adopted consensus

mechanisms (e.g. Bitcoin). Accordingly, CO2 emis-

sions of this industry will keep rising in the future

which already pose signiﬁcant problem. The initial

design of the presented concept will be further an-

alyzed from a security point of view to insure that

the presented consensus mechanism will overcome at-

tacks such as 51%-attack or Double block generation.

Furthermore, a simulation model will be built to in-

vestigate the feasibility of the concept to enhance the

operations of cloud providers to reduce their energy

consumption using the concept of proof-of-provision,

which provide a higher form of transparency through

incorporating the SLA conditions and violations. In

the simulation, we will demonstrate the role of dy-

namic scaling of virtual machines and virtual ma-

chines live migration to reduce energy consumption

in datacenters. One can argue that the transparency is

a major problem that demotivate cloud services con-

sumer from accepting speciﬁc forms of services as for

instance, a dynamic scaling of virtual machines or hi-

bernating computing resources if they are not in use.

In the third and fourth evaluation phases we will de-

velop a prototype to demonstrate the applicability of

the concept and further investigate the mentioned se-

curity matters.

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