Technical Specification: Cellular Automaton Tournament Blockchain with Zero-Knowledge Smart Contracts
Version: 1.0
Date: November 2025
Status: Architectural Specification
This document specifies a novel blockchain architecture combining cellular automaton-based tournament consensus with privacy-preserving zero-knowledge smart contracts. The system solves the cartel coordination problem inherent in proof-of-work blockchains whilst enabling programmable privacy-preserving computation through unified ZK-SNARK circuits.
Core Innovation: Mining cartels cannot coordinate because consensus emerges from pairwise competitive glider battles in cellular automaton space, where cooperation is mathematically impossible whilst maintaining competitive advantage.
Key Properties:
- Anti-cartel consensus through CA tournament game theory
- Native privacy-preserving smart contract execution
- Longest chain consensus eliminates synchronization bottlenecks
- Scalability comparable to Bitcoin with superior decentralization
- System Architecture
- Consensus Mechanism
- Cellular Automaton Engine
- Tournament System
- Zero-Knowledge Smart Contracts
- Cryptographic Primitives
- Network Protocol
- Economic Model
- Security Analysis
- Performance Characteristics
- Trade-offs and Design Decisions
- Implementation Roadmap
┌─────────────────────────────────────────────────────────────┐
│ Blockchain Layer │
│ ┌────────────┐ ┌────────────┐ ┌──────────────────────┐ │
│ │ Block │ │ Longest │ │ State Transition │ │
│ │ Production │→ │ Chain │→ │ Verification │ │
│ └────────────┘ │ Consensus │ └──────────────────────┘ │
│ └────────────┘ │
└─────────────────────────────────────────────────────────────┘
↓ ↓ ↓
┌─────────────────────────────────────────────────────────────┐
│ Tournament Consensus Layer │
│ ┌────────────┐ ┌────────────┐ ┌──────────────────────┐ │
│ │ Random │ │ Pairwise │ │ Winner │ │
│ │ Pairing │→ │ Battles │→ │ Determination │ │
│ └────────────┘ └────────────┘ └──────────────────────┘ │
└─────────────────────────────────────────────────────────────┘
↓ ↓ ↓
┌─────────────────────────────────────────────────────────────┐
│ Cellular Automaton Competition Layer │
│ ┌────────────┐ ┌────────────┐ ┌──────────────────────┐ │
│ │ Glider │ │ Collision │ │ Battle │ │
│ │ Generation │→ │ Simulation │→ │ Outcome │ │
│ └────────────┘ └────────────┘ └──────────────────────┘ │
└─────────────────────────────────────────────────────────────┘
↓ ↓ ↓
┌─────────────────────────────────────────────────────────────┐
│ Zero-Knowledge Proof Layer │
│ ┌────────────┐ ┌────────────┐ ┌──────────────────────┐ │
│ │ Battle │ │ Contract │ │ State │ │
│ │ Proofs │ │ Execution │ │ Transition │ │
│ │ (SNARK) │ │ Proofs │ │ Proofs │ │
│ └────────────┘ └────────────┘ └──────────────────────┘ │
└─────────────────────────────────────────────────────────────┘
↓ ↓ ↓
┌─────────────────────────────────────────────────────────────┐
│ Smart Contract Execution Layer │
│ ┌────────────┐ ┌────────────┐ ┌──────────────────────┐ │
│ │ ZKVM │ │ Private │ │ Contract │ │
│ │ Runtime │→ │ State │→ │ Logic │ │
│ └────────────┘ └────────────┘ └──────────────────────┘ │
└─────────────────────────────────────────────────────────────┘
Miner Node:
1. Generates glider patterns for CA tournament
2. Computes pairwise battles through CA simulation
3. Creates ZK-SNARK proofs of battle outcomes
4. Executes smart contracts with privacy preservation
5. Assembles block with tournament results + contract executions
6. Broadcasts block to network
Validator Node:
1. Receives block from network
2. Verifies block header and structure (fast)
3. Validates tournament bracket correctness
4. Samples and verifies subset of ZK proofs
5. Accepts block if sample passes
6. Performs full background verification asynchronously
7. Rejects block later if full verification fails
Light Node:
1. Receives block headers only
2. Verifies proof-of-work (tournament difficulty)
3. Follows longest chain
4. Can verify specific transactions with merkle proofs
Fundamental Principle: Instead of solving meaningless hash puzzles, miners compete in cellular automaton tournaments where victory emerges from superior glider pattern design and CA simulation skill.
Consensus Rule: The valid chain is the one with the most accumulated tournament difficulty (analogous to Bitcoin's most accumulated work).
def produce_block(previous_block, transactions, contracts):
# Phase 1: Tournament Pairing
seed = hash(previous_block.hash || timestamp || ca_state)
miners = get_active_miners()
pairs = random_shuffle(miners, seed).chunk(2)
# Phase 2: Pairwise Battles
battles = []
for (miner_a, miner_b) in pairs:
glider_a = miner_a.generate_glider_pattern()
glider_b = miner_b.generate_glider_pattern()
ca_state = initialize_ca_grid()
ca_state.spawn_glider(glider_a, position_a)
ca_state.spawn_glider(glider_b, position_b)
for step in range(CA_TIME_STEPS):
ca_state.evolve()
if collision_detected(glider_a, glider_b):
winner = determine_collision_winner(ca_state)
break
battle_proof = generate_zk_snark(
ca_initial_state,
ca_final_state,
battle_outcome
)
battles.append(BattleResult(
participants=(miner_a, miner_b),
winner=winner,
proof=battle_proof
))
# Phase 3: Tournament Advancement
winners = [battle.winner for battle in battles]
# Recursive tournament rounds
while len(winners) > 1:
winners = conduct_tournament_round(winners)
block_winner = winners[0]
# Phase 4: Smart Contract Execution
contract_executions = []
for contract_call in contracts:
execution_result = execute_contract_privately(contract_call)
execution_proof = generate_contract_zk_proof(execution_result)
contract_executions.append((execution_result, execution_proof))
# Phase 5: Block Assembly
return Block(
header=BlockHeader(
prev_hash=previous_block.hash,
merkle_root=compute_merkle_root(transactions, battles, contracts),
tournament_winner=block_winner,
difficulty=compute_tournament_difficulty(battles),
timestamp=current_time()
),
body=BlockBody(
tournament_results=battles,
transactions=transactions,
contract_executions=contract_executions
)
)Fork Resolution: When multiple valid blocks exist at the same height, nodes follow the chain with highest cumulative tournament difficulty.
def select_best_chain(chains):
def chain_difficulty(chain):
return sum(block.difficulty for block in chain)
return max(chains, key=chain_difficulty)Rationale: This follows Bitcoin's longest chain principle, enabling asynchronous verification whilst preventing synchronization bottlenecks. Nodes need not agree on every detail immediately; they converge on the chain with most accumulated computational work (tournament victories).
Grid Size: 1024 × 1024 cells
Cell States: 8-bit values (0-255)
Boundary Conditions: Toroidal (edges wrap around)
Update Rule: Modified Conway's Game of Life with energy conservation
def evolve_cell(cell, neighbors):
"""
Modified Conway rules with energy conservation for cryptographic properties
"""
live_neighbors = count_live(neighbors)
cell_energy = cell.state
# Standard Conway birth/death rules
if cell.is_alive():
if live_neighbors < 2 or live_neighbors > 3:
return Cell(state=0) # Death
else:
return Cell(state=cell_energy) # Survival
else:
if live_neighbors == 3:
# Birth with energy from neighbors
energy = sum(n.state for n in neighbors if n.is_alive()) // 3
return Cell(state=energy)
else:
return Cell(state=0)Glider Specification:
class Glider:
pattern: BitMatrix # Shape of glider (typically 3x3 to 10x10)
energy: uint8 # Energy level (affects collision outcomes)
velocity: (dx, dy) # Movement vector
owner: MinerID # Miner who generated this gliderStandard Glider Library:
- Classic Conway glider (3x3, diagonal movement)
- Lightweight spaceship (5x4, horizontal movement)
- Middleweight spaceship (6x5)
- Heavyweight spaceship (7x5)
- Custom patterns (miner-designed)
def detect_collision(glider_a, glider_b, ca_state):
"""
Collision occurs when glider patterns overlap in CA grid
"""
bounds_a = glider_a.get_bounds()
bounds_b = glider_b.get_bounds()
return bounds_a.intersects(bounds_b)
def resolve_collision(glider_a, glider_b, ca_state):
"""
Winner determined by:
1. Pattern stability after collision
2. Energy conservation
3. Resultant glider survival
"""
# Simulate CA for N steps after collision
post_collision_state = ca_state.evolve(POST_COLLISION_STEPS)
# Check which glider pattern persists
a_survives = glider_a.pattern_exists_in(post_collision_state)
b_survives = glider_b.pattern_exists_in(post_collision_state)
if a_survives and not b_survives:
return glider_a.owner
elif b_survives and not a_survives:
return glider_b.owner
elif a_survives and b_survives:
# Both survive: winner is one with more energy
return max((glider_a, glider_b), key=lambda g: g.energy).owner
else:
# Both destroyed: draw (re-match with different initial conditions)
return NoneDeterministic Randomness: All nodes must generate identical pairings from the same seed.
def generate_pairings(miners, seed):
"""
Deterministic Fisher-Yates shuffle using seed derived from previous block
"""
rng = PRNG(seed)
shuffled = miners.copy()
for i in range(len(shuffled) - 1, 0, -1):
j = rng.randint(0, i)
shuffled[i], shuffled[j] = shuffled[j], shuffled[i]
# Pair adjacent miners
pairs = [(shuffled[i], shuffled[i+1])
for i in range(0, len(shuffled) - 1, 2)]
return pairsSeed Composition:
seed = SHA256(previous_block_hash || block_timestamp || aggregated_ca_state_hash)
Rationale: Seed incorporates unpredictable elements (previous block hash, CA state) whilst remaining deterministic for all nodes. Miners cannot predict opponents in advance, preventing coordination.
Round 1: N miners → N/2 battles → N/2 winners
Round 2: N/2 miners → N/4 battles → N/4 winners
...
Round log₂(N): 2 miners → 1 battle → 1 winner
Total rounds: ⌈log₂(N)⌉
Total battles: N - 1
Advancement Rules:
- Winners from round k advance to round k+1
- Pairings regenerated each round using updated seed
- Final winner becomes block proposer and receives block reward
Purpose: Hide miner identities during tournament to prevent targeted attacks and coordination.
class AnonymousBattle:
ring: List[PublicKey] # All miners in current round
commitment: Hash # Commitment to glider pattern
proof: RingSignature # Proves membership without revealing identity
def commit_to_battle(miner, glider_pattern, ring):
"""
Miner commits to glider pattern using ring signature
"""
commitment = hash(glider_pattern || random_nonce)
message = commitment || timestamp
ring_sig = ring_sign(miner.private_key, ring, message)
return AnonymousBattleCommitment(
ring=ring,
commitment=commitment,
signature=ring_sig
)Verification:
def verify_battle_commitment(commitment):
"""
Anyone can verify commitment is from a miner in the ring,
but cannot determine which specific miner
"""
return ring_verify(
commitment.signature,
commitment.ring,
commitment.commitment || commitment.timestamp
)Virtual Machine Specification:
Instruction Set: RISC-style opcodes
Word Size: 256-bit (native field arithmetic)
Memory Model: Random access with commitment-based privacy
Gas Model: Metered execution with privacy overhead costs
Core Instructions:
Arithmetic: ADD, SUB, MUL, DIV, MOD
Logic: AND, OR, XOR, NOT, SHL, SHR
Memory: LOAD, STORE, MLOAD, MSTORE
Control: JMP, JZ, CALL, RET
Crypto: HASH, VERIFY_SIG, COMMIT, OPEN
State Commitment Scheme:
class PrivateState:
commitment: Hash # Commitment to actual state
nullifier_set: Set[Hash] # Spent commitments (prevent double-spend)
merkle_root: Hash # Root of state commitment tree
def private_state_transition(old_state, function, args):
"""
Execute contract function on private state
"""
# Decrypt state (only contract owner can do this)
actual_state = decrypt_state(old_state.commitment, private_key)
# Execute function
new_state = function(actual_state, args)
# Create new commitment
new_commitment = commit(new_state, random_nonce)
# Generate ZK proof of valid state transition
proof = generate_zk_proof(
public_inputs=[old_state.commitment, new_commitment],
private_inputs=[actual_state, new_state, function_code],
circuit=state_transition_circuit
)
return PrivateStateTransition(
old_commitment=old_state.commitment,
new_commitment=new_commitment,
proof=proof
)Unified Circuit Architecture:
Circuit Components:
├── Tournament Verification Subcircuit
│ ├── CA Evolution Constraints
│ ├── Glider Collision Detection
│ └── Battle Outcome Determination
│
├── Contract Execution Subcircuit
│ ├── ZKVM Instruction Execution
│ ├── Memory Access Constraints
│ └── Gas Metering
│
└── State Transition Subcircuit
├── Commitment Verification
├── Nullifier Checks
└── Merkle Proof Validation
Circuit Constraints:
// Pseudocode for ZK circuit constraints
circuit TournamentAndContracts {
// Public inputs
public prev_state_root: Field;
public new_state_root: Field;
public tournament_winner: Field;
// Private inputs
private ca_evolution: CAState[];
private glider_collisions: Collision[];
private contract_executions: Execution[];
// Constraints
constraints {
// CA evolution must follow rules
for step in ca_evolution {
assert_ca_rules_followed(step);
}
// Collisions must be detected correctly
for collision in glider_collisions {
assert_collision_valid(collision, ca_evolution);
}
// Tournament winner must be legitimate
assert_tournament_winner_valid(tournament_winner, glider_collisions);
// Contract executions must be valid
for execution in contract_executions {
assert_execution_valid(execution);
assert_state_transition_valid(execution, prev_state_root, new_state_root);
}
}
}Primary Hash: SHA-256 (for compatibility with existing infrastructure) Commitment Scheme: Pedersen commitments (for ZK-friendly operations) Merkle Trees: Binary merkle trees with SHA-256
Standard Signatures: ECDSA on secp256k1 (Bitcoin-compatible) Ring Signatures: Linkable ring signatures (Monero-style) Aggregate Signatures: BLS signatures for efficient multi-sig
Proof System: Groth16 ZK-SNARKs
- Proof size: ~200 bytes
- Verification time: ~5-10ms
- Generation time: ~100ms for tournament circuits, ~50ms for contract circuits
Trusted Setup:
- Multi-party computation ceremony
- Minimum 100 participants
- 1-of-N honest assumption
- Public ceremony transcript for auditability
Alternative: Transition to STARK proofs in future versions to eliminate trusted setup requirement.
Network Type: Unstructured P2P overlay (Bitcoin-style) Discovery: DNS seeds + peer exchange Connection Limits: 125 connections per node (8 outbound, 117 inbound max)
message Block {
BlockHeader header = 1;
repeated Battle tournament_battles = 2;
repeated Transaction transactions = 3;
repeated ContractExecution contract_calls = 4;
}
message Battle {
bytes participant_a_pubkey_hash = 1;
bytes participant_b_pubkey_hash = 2;
bytes winner_pubkey_hash = 3;
bytes ca_state_commitment = 4;
bytes zk_proof = 5;
RingSignature ring_sig_a = 6;
RingSignature ring_sig_b = 7;
}
message ContractExecution {
bytes contract_address = 1;
bytes function_selector = 2;
bytes input_commitment = 3;
bytes output_commitment = 4;
bytes execution_proof = 5;
uint64 gas_used = 6;
}
message Transaction {
bytes from = 1;
bytes to = 2;
bytes amount_commitment = 3; // Hidden amount
bytes range_proof = 4; // Proves amount is positive
bytes signature = 5;
}Compact Block Relay:
1. Block producer sends compact block (header + short IDs)
2. Receiving nodes request missing transactions
3. Nodes reconstruct full block from mempool + received data
Rationale: Reduces bandwidth by ~95% since most transactions already in mempool.
Block Reward = Base Reward + Transaction Fees + Contract Execution Fees
Distribution:
- 60% to tournament winner (block proposer)
- 30% to all tournament participants (proportional to round reached)
- 10% to protocol treasury (development fund)
Reward Schedule:
Initial: 50 tokens per block
Halving: Every 210,000 blocks (~4 years at 10-minute blocks)
Terminal: Minimum 0.01 tokens per block (never reaches zero)
Gas Price Discovery:
def compute_gas_price(block):
base_fee = calculate_base_fee(parent_block)
priority_fee = user_specified_tip
privacy_multiplier = 1.5 if transaction.is_private else 1.0
zk_overhead = 1.2 # ZK proof generation overhead
total_gas_price = (base_fee + priority_fee) * privacy_multiplier * zk_overhead
return total_gas_priceFee Burn Mechanism:
- 50% of base fee burned (deflationary pressure)
- 50% goes to miners (incentive alignment)
- Priority fees go entirely to miners
Tournament Participation Rewards:
def calculate_participation_reward(miner, tournament_results):
"""
Miners earn rewards even if they don't win, incentivizing participation
"""
round_reached = get_highest_round(miner, tournament_results)
max_rounds = log2(total_participants)
participation_share = (round_reached / max_rounds) ** 2
participation_reward = 0.3 * block_reward * participation_share
return participation_rewardDefection Incentive:
Individual expected value from honest mining > Expected value from cartel participation
Because:
1. Cartel coordination costs reduce effective rewards
2. Individual skill (glider design) matters more than cartel size
3. Random pairing prevents cartel members from avoiding each other
4. Detection risk increases with cartel size
Assumptions:
- Adversary controls up to 49% of mining power
- Network adversary can delay but not permanently block messages
- Cryptographic primitives (SHA-256, ECDSA, ZK-SNARKs) are secure
- Trusted setup ceremony had at least one honest participant
Attack Vectors:
Attack: Cartel coordinates to advance specific member
Defense: Random pairing + ring signatures prevent advance coordination
Analysis:
- Small cartels (<25%): Statistically unlikely to dominate tournament
- Large cartels (>50%): This is the 51% attack problem (universal to all blockchains)
Verdict: Effective defense against realistic cartel sizes
Attack: Discover pathological CA patterns that guarantee victory
Defense:
- Use well-studied CA rules (Conway's Game of Life variants)
- Implement pattern detection for known exploits
- Allow governance to update CA rules if exploits discovered
Analysis: CA theory is mature; exploitable patterns are known and avoidable
Verdict: Manageable risk through careful CA rule selection
Attack: Generate false proofs of battle victories or contract executions
Defense: Cryptographic security of ZK-SNARK system
Analysis: Requires breaking underlying cryptographic assumptions (DLP, pairing security)
Computational complexity: 2^128 operations (infeasible)
Verdict: Cryptographically secure under standard assumptions
Attack: Spend same commitment twice in private transactions
Defense: Nullifier set prevents commitment reuse
Analysis:
- Each spent commitment adds nullifier to global set
- Transactions with duplicate nullifiers rejected
- ZK proof ensures nullifier derived correctly from commitment
Verdict: Provably secure via nullifier mechanism
Attack: Split network to create conflicting chain histories
Defense: Longest chain rule + majority of honest nodes
Analysis:
- Temporary partitions resolve when connectivity restored
- Longest chain (most accumulated difficulty) wins
- Same security as Bitcoin against partition attacks
Verdict: Standard blockchain partition resistance
Hash Functions (SHA-256): 128-bit security
Signatures (ECDSA secp256k1): 128-bit security
ZK-SNARKs (Groth16): 128-bit security
Ring Signatures: 128-bit security
Overall System Security: 128-bit (determined by weakest component)
Block Production (Miner):
Tournament Computation:
- CA simulation: O(N × grid_size² × time_steps)
= O(1000 × 10⁶ × 100) = O(10¹¹) operations
≈ 200 seconds on modern CPU
- ZK proof generation: O(N × proof_time)
= O(1000 × 100ms) = 100 seconds
- Total: ~300 seconds < 600 second block time ✓
Contract Execution:
- ZKVM execution: O(contracts × instructions)
= O(100 × 10⁴) = O(10⁶) instructions
≈ 5 seconds
- Contract proof generation: O(contracts × proof_time)
= O(100 × 50ms) = 5 seconds
Grand Total per Block: ~310 seconds (feasible within 10-minute target)
Block Verification (Validator):
Critical Path (Block Acceptance):
- Header validation: O(1) ≈ 1ms
- Tournament structure: O(log N) ≈ 10ms
- Sample K battles: O(K × verify_time) = O(10 × 10ms) = 100ms
- Sample K contracts: O(K × verify_time) = O(10 × 5ms) = 50ms
Total: ~161ms (acceptable)
Background Verification:
- All battles: O(N × verify_time) = O(1000 × 10ms) = 10 seconds
- All contracts: O(C × verify_time) = O(100 × 5ms) = 500ms
Total: ~10.5 seconds (asynchronous, non-blocking)
Per Block:
- Header: 256 bytes
- Tournament data: ~1000 battles × 1KB = 1MB
- Transactions: ~2000 tx × 500 bytes = 1MB
- Contract executions: ~100 × 2KB = 200KB
- Total: ~2.5MB per block
Annual Growth:
- Blocks per year: 52,560 (10-minute blocks)
- Storage per year: 52,560 × 2.5MB ≈ 131GB
- Compare to Bitcoin: ~50GB/year
Pruning Opportunities:
- Old tournament data can be pruned after 6 confirmations
- Only recent ZK proofs needed for verification
- Effective storage: ~50GB/year after pruning
Block Propagation:
- Full block: 2.5MB
- Compact block: ~50KB (98% reduction via compact relay)
- Actual bandwidth: 50KB per block = 0.08 KB/s average
Transaction Relay:
- Average transaction: 500 bytes
- TPS target: 100 transactions/second
- Bandwidth: 50 KB/s
Total Bandwidth: ~50 KB/s (comparable to Bitcoin)
Current Parameters (N=1000 miners):
- Block time: 10 minutes ✓
- TPS: ~100 ✓
- Storage growth: 131GB/year ✓
- Bandwidth: 50 KB/s ✓
Scaling to N=10,000 miners:
- Tournament computation: 2000 seconds (still < 10 minutes) ✓
- Verification: 100 seconds background (acceptable) ✓
- Storage: ~150GB/year (manageable) ✓
- Bandwidth: ~75 KB/s (acceptable) ✓
Conclusion: System scales to 10,000 active miners without fundamental changes
Decision: Pairwise tournament instead of independent hash mining
Advantages: ✅ Natural anti-cartel properties (coordination is game-theoretically unstable) ✅ Useful computation (CA simulation has applications beyond consensus) ✅ Skill-based competition (glider design matters) ✅ Progressive elimination (creates engaging competitive dynamic)
Disadvantages: ❌ More complex consensus mechanism (higher implementation risk) ❌ Novel approach (less battle-tested than Bitcoin's PoW) ❌ Tournament structure adds latency (log₂N rounds)
Rationale: The anti-cartel benefits outweigh the complexity costs. Bitcoin's mining cartels are an existential threat to decentralization; tournament structure makes cartel coordination mathematically difficult rather than merely economically discouraged.
Supporting Analysis:
Bitcoin cartel problem:
- 3 mining pools control >50% of hashrate
- Geographic concentration (70% in China historically)
- Economic incentive to cartelize (variance reduction)
Tournament solution:
- Random pairing prevents pool coordination
- Individual skill matters more than aggregate hashpower
- Participation rewards reduce variance without cartels
- Ring signatures prevent targeted attacks
Result: Superior decentralization properties at cost of implementation complexity
Decision: Longest chain rule instead of synchronous Byzantine agreement
Advantages: ✅ Eliminates synchronization bottlenecks (major scalability win) ✅ Proven consensus mechanism (Bitcoin's 15-year track record) ✅ Asynchronous verification (nodes don't block on tournament rounds) ✅ Natural fork resolution (most accumulated difficulty wins)
Disadvantages: ❌ Probabilistic finality (not instant, requires confirmations) ❌ Potential for temporary forks (until longest chain emerges) ❌ 51% attack vulnerability (universal to longest-chain systems)
Rationale: Initial architecture attempted synchronous Byzantine consensus for tournament rounds, requiring all nodes to agree on each round's outcomes before proceeding. This created O(log N) consensus bottlenecks, making the system unscalable.
Switching to longest chain consensus was the critical insight that made the system feasible:
# BEFORE: Synchronous (broken)
for round in tournament_rounds:
conduct_round(round)
wait_for_all_nodes_to_agree() # ← Bottleneck!
advance_to_next_round()
# AFTER: Asynchronous (works)
block = produce_entire_tournament_locally()
broadcast(block)
nodes_follow_longest_chain() # No synchronization barriersImpact Analysis:
- Removed log₂(N) synchronization points per block
- Reduced network consensus overhead by ~95%
- Enabled background verification (non-blocking)
- Made system actually buildable
This was the pivotal design decision that transformed the system from theoretically elegant but practically impossible to genuinely feasible.
Decision: Groth16 ZK-SNARKs for battle and contract verification
Alternatives Considered:
- ZK-STARKs: No trusted setup, but 100x larger proofs and 10x slower verification
- Bulletproofs: No trusted setup, but O(log N) verification time vs O(1) for SNARKs
- Plonk/Marlin: Universal trusted setup, but 2-3x larger proofs than Groth16
Trade-off Matrix:
Proof System | Proof Size | Verify Time | Setup | Generation Time
----------------|------------|-------------|------------|----------------
Groth16 | 200 bytes | 5-10ms | Trusted | 100ms
STARK | 20KB | 50-100ms | None | 50ms
Bulletproof | 1-2KB | O(log N) | None | 200ms
Plonk | 400 bytes | 10-20ms | Universal | 150ms
Decision Rationale:
- Network bandwidth critical: 200-byte proofs vs 20KB saves 99% bandwidth
- Verification speed matters: 10ms vs 100ms enables real-time validation
- Trusted setup acceptable: Multi-party ceremony with 100+ participants provides sufficient security (1-of-N honest assumption reasonable)
- Generation time adequate: 100ms per proof acceptable within 10-minute block time
Mitigation for Trusted Setup Risk:
- Public ceremony with open participation
- Multiple independent ceremonies (redundancy)
- Plan migration to STARKs in future version when proof sizes shrink
- Governance mechanism can trigger setup reset if compromise suspected
Verdict: Groth16 optimal for current implementation; migrate to transparent proofs when technology matures.
Decision: Privacy-first with selective disclosure capabilities
Privacy Features:
- Transaction amounts hidden (commitments + range proofs)
- Contract state encrypted (only parties know values)
- Account balances concealed (Pedersen commitments)
- Sender/receiver anonymity (stealth addresses + ring signatures)
Necessary Public Information:
- Contract addresses (needed for routing)
- Function selectors (which function called, not arguments)
- Gas consumption (economic metering requirement)
- Timestamps (consensus requirement)
Selective Disclosure Mechanism:
def create_auditable_transaction(tx, auditor_pubkey):
"""
Generate ZK proof that reveals transaction details to auditor only
"""
encrypted_details = encrypt(tx.amount || tx.memo, auditor_pubkey)
disclosure_proof = zk_prove(
statement="I know transaction details and encrypted them for auditor",
public=[encrypted_details, auditor_pubkey],
private=[tx.amount, tx.memo, encryption_randomness]
)
return AuditableTransaction(
public_tx=tx, # Normal private transaction
audit_data=encrypted_details,
audit_proof=disclosure_proof
)Rationale for Privacy-First:
- Financial privacy is a fundamental right (cash-equivalent privacy)
- Prevents surveillance and censorship
- Enables commercial use (companies need confidential transactions)
- Maintains auditability through selective disclosure
Regulatory Compliance Path:
- Optional auditor keys for regulated entities
- View keys for tax reporting
- Selective disclosure proofs for compliance
- Not a pure privacy coin (programmable transparency)
Trade-offs Accepted:
- More complex cryptography (ZK circuits larger)
- Higher computational costs (privacy overhead)
- Some metadata leakage unavoidable (timing, gas patterns)
- Risk of regulatory scrutiny (mitigated by compliance features)
Verdict: Privacy-first architecture with compliance capabilities provides best balance of user rights and practical adoption.
Decision: Full on-chain execution with ZK-compressed proofs
Alternatives:
- Optimistic Rollups: Execute off-chain, post results, challenge period
- State Channels: Peer-to-peer execution, settle on-chain only on dispute
- Sidechains: Separate execution chain, periodically checkpoint to mainchain
On-Chain Execution Model:
Every contract execution occurs on-chain:
- Miners execute contracts locally
- Generate ZK proof of correct execution
- Post proof + state commitment on-chain
- All nodes can verify proof quickly
Advantages:
✅ Immediate finality (no challenge periods)
✅ Maximum security (inherits full chain security)
✅ No separate consensus (no bridge security risks)
✅ Unified architecture (simpler system)
Disadvantages:
❌ Limited throughput (~100 TPS vs 1000+ for rollups)
❌ Higher costs (every operation is on-chain)
❌ No instant off-chain interactions
Rationale: For a decentralization-focused blockchain with anti-cartel consensus, maintaining full on-chain execution ensures:
- No trusted intermediaries (rollup operators)
- No bridge risks (all value secured by main chain)
- Simpler security model (one consensus mechanism)
- Better composability (all contracts on same chain)
Throughput Trade-off Accepted:
- Target market: High-value private transactions and DeFi
- 100 TPS sufficient for quality over quantity
- Privacy premium justifies higher per-transaction cost
- Layer-2 solutions can be added later if needed
Future Scalability Path:
- ZK-rollups can be added as layer-2 (inherit main chain security)
- State channels for high-frequency private interactions
- Sharding if demand exceeds capacity
- Current architecture doesn't preclude future scaling solutions
Verdict: On-chain execution maximizes security and decentralization; accept throughput limitations for target use case.
Deliverables:
□ Cellular automaton engine (Conway's Game of Life variant)
□ Glider pattern library and generation
□ Tournament pairing and bracket logic
□ Basic ZK-SNARK circuits for battle verification
□ Blockchain data structures (blocks, headers, transactions)
□ Longest chain consensus implementation
□ P2P networking layer (Bitcoin-style gossip)
□ Simple transaction processing (no privacy yet)
□ Basic node software (miner + validator)
□ Local testnet with 10-20 nodes
Milestones:
- M1.1: CA engine produces deterministic glider simulations
- M1.2: Tournament correctly determines winners from battles
- M1.3: ZK proofs verify battle outcomes in <10ms
- M1.4: Nodes achieve consensus on longest chain
- M1.5: Testnet runs for 1000 blocks without forks
Success Criteria: ✓ Tournament demonstrates anti-cartel properties (simulated cartels fail) ✓ Performance meets targets (200s block generation, 10s verification) ✓ Consensus stable (no unexpected forks) ✓ ZK proofs validate correctly
Deliverables:
□ ZKVM instruction set design
□ ZK circuit for contract execution
□ Private state management (commitments + nullifiers)
□ Gas metering and fee markets
□ Contract deployment mechanism
□ Inter-contract private calls
□ Event emission and logging
□ Basic contract development tools
□ Solidity-to-ZKVM compiler (subset)
□ Contract testing framework
Milestones:
- M2.1: ZKVM executes simple contracts with ZK privacy
- M2.2: Private state transitions proven correct
- M2.3: Gas metering prevents DoS attacks
- M2.4: Contracts can call each other privately
- M2.5: Developer tools enable contract creation
Success Criteria: ✓ Turing-complete contract execution with privacy ✓ State transitions cryptographically verified ✓ Gas costs accurately reflect computational complexity ✓ External developers can write and deploy contracts
Deliverables:
□ Stealth address system
□ Ring signature integration for transactions
□ Private token standard (ERC-20 equivalent)
□ Confidential transaction amounts (commitments + range proofs)
□ Cross-contract privacy preservation
□ View keys for selective disclosure
□ Auditor key system (regulatory compliance)
□ Wallet with privacy features
□ Block explorer (respects privacy)
□ Privacy-preserving DeFi primitives
Milestones:
- M3.1: Stealth addresses hide recipients
- M3.2: Ring signatures anonymize senders
- M3.3: Private tokens function correctly
- M3.4: Selective disclosure works for compliance
- M3.5: Full privacy DeFi applications deployed
Success Criteria: ✓ Transaction privacy equivalent to Monero/Zcash ✓ Smart contract privacy surpasses existing platforms ✓ Compliance features satisfy regulatory requirements ✓ Privacy overhead acceptable (<2x cost increase)
Deliverables:
□ Comprehensive security audit (3+ firms)
□ Formal verification of critical components
□ Performance optimization (2-5x improvements)
□ Network stability testing (1000+ node testnet)
□ Stress testing (attack simulations)
□ Bug bounty program
□ Documentation (technical specs, API docs, tutorials)
□ Wallet ecosystem (desktop, mobile, hardware)
□ Developer tools (IDE plugins, debuggers)
□ Governance mechanism for upgrades
□ Mainnet launch preparation
□ Token economics finalization
Milestones:
- M4.1: Security audits find no critical vulnerabilities
- M4.2: Performance optimizations meet production targets
- M4.3: Testnet survives coordinated attack attempts
- M4.4: Developer ecosystem produces real applications
- M4.5: Mainnet launches successfully
Success Criteria: ✓ No critical security vulnerabilities ✓ Performance targets met (100 TPS, 10-min blocks) ✓ Network stable under adversarial conditions ✓ Sufficient applications for viable ecosystem ✓ Smooth mainnet launch with no major incidents
┌────────────────────────────────────────────────────────────────┐
│ APPLICATION LAYER │
│ ┌──────────────┐ ┌──────────────┐ ┌───────────────────┐ │
│ │ Wallets │ │ dApps │ │ DeFi Protocols │ │
│ └──────────────┘ └──────────────┘ └───────────────────┘ │
└────────────────────────────────────────────────────────────────┘
▼
┌────────────────────────────────────────────────────────────────┐
│ CONTRACT LAYER │
│ ┌──────────────────────────────────────────────────────────┐ │
│ │ ZKVM (Privacy-Preserving Execution) │ │
│ │ │ │
│ │ ┌──────────┐ ┌──────────┐ ┌──────────┐ ┌──────────┐ │ │
│ │ │ Private │ │Contract │ │ Gas │ │Inter- │ │ │
│ │ │ State │→ │ Logic │→ │ Metering │→│Contract │ │ │
│ │ │Management│ │Execution │ │ │ │ Calls │ │ │
│ │ └──────────┘ └──────────┘ └──────────┘ └──────────┘ │ │
│ └──────────────────────────────────────────────────────────┘ │
└────────────────────────────────────────────────────────────────┘
▼
┌────────────────────────────────────────────────────────────────┐
│ CONSENSUS LAYER │
│ ┌──────────────────────────────────────────────────────────┐ │
│ │ Tournament-Based Proof-of-Work │ │
│ │ │ │
│ │ Round 1: [M1 vs M2] [M3 vs M4] ... [M999 vs M1000] │ │
│ │ ▼ ▼ ▼ │ │
│ │ Round 2: [W1 vs W2] [W3 vs W4] ... [W499 vs W500] │ │
│ │ ▼ ▼ ▼ │ │
│ │ Round 3: [W1 vs W2] ... [W249 vs W250] │ │
│ │ ... │ │
│ │ Round 10: [W1 vs W2] → Final Winner │ │
│ └──────────────────────────────────────────────────────────┘ │
└────────────────────────────────────────────────────────────────┘
▼
┌────────────────────────────────────────────────────────────────┐
│ CELLULAR AUTOMATON LAYER │
│ ┌──────────────────────────────────────────────────────────┐ │
│ │ 1024×1024 Grid (Conway-style CA Rules) │ │
│ │ │ │
│ │ Glider A (Miner 1) ──→ ☐☐☐☐ │ │
│ │ ☐◉◉☐ ← Collision Zone │ │
│ │ Glider B (Miner 2) ──→ ☐☐◉☐ │ │
│ │ ☐☐☐☐ │ │
│ │ │ │
│ │ Evolution: t=0 → t=1 → ... → t=100 │ │
│ │ Winner: Surviving glider pattern determines victor │ │
│ └──────────────────────────────────────────────────────────┘ │
└────────────────────────────────────────────────────────────────┘
▼
┌────────────────────────────────────────────────────────────────┐
│ ZK-PROOF LAYER │
│ ┌──────────────────────────────────────────────────────────┐ │
│ │ Groth16 ZK-SNARK Circuits │ │
│ │ │ │
│ │ ┌──────────────┐ ┌──────────────┐ ┌───────────────┐ │ │
│ │ │ Battle │ │ Contract │ │ State │ │ │
│ │ │ Verification │ │ Execution │ │ Transition │ │ │
│ │ │ Circuit │ │ Circuit │ │ Circuit │ │ │
│ │ └──────────────┘ └──────────────┘ └───────────────┘ │ │
│ │ ▼ ▼ ▼ │ │
│ │ [200-byte proof] [200-byte proof] [200-byte proof] │ │
│ │ ~100ms gen ~50ms gen ~30ms gen │ │
│ │ ~10ms verify ~5ms verify ~3ms verify │ │
│ └──────────────────────────────────────────────────────────┘ │
└────────────────────────────────────────────────────────────────┘
▼
┌────────────────────────────────────────────────────────────────┐
│ BLOCKCHAIN LAYER │
│ ┌──────────────────────────────────────────────────────────┐ │
│ │ Longest Chain Consensus (Bitcoin-style) │ │
│ │ │ │
│ │ [Block N-2] ← [Block N-1] ← [Block N] ← [Block N+1] │ │
│ │ ▼ ▼ ▼ ▼ │ │
│ │ Winner A Winner B Winner C Winner D │ │
│ │ (Tournament) (Tournament) (Tournament) (Tournament) │ │
│ └──────────────────────────────────────────────────────────┘ │
└────────────────────────────────────────────────────────────────┘
▼
┌────────────────────────────────────────────────────────────────┐
│ NETWORK LAYER │
│ ┌──────────────────────────────────────────────────────────┐ │
│ │ P2P Gossip Network (Bitcoin-style) │ │
│ │ │ │
│ │ Node A ←→ Node B ←→ Node C │ │
│ │ ↕ ↕ ↕ │ │
│ │ Node D ←→ Node E ←→ Node F │ │
│ │ │ │
│ │ Messages: Blocks, Transactions, Contracts, Battles │ │
│ └──────────────────────────────────────────────────────────┘ │
└────────────────────────────────────────────────────────────────┘
MINER NODE BLOCK PRODUCTION SEQUENCE
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Step 1: Initialize Tournament
┌─────────────────────────────┐
│ Get Active Miners (N=1000) │
│ Seed = hash(prev_block||ts) │
│ Generate Random Pairings │
└─────────────────────────────┘
▼
Step 2: Round 1 Battles (500 battles)
┌────────────────────────────────────────┐
│ For each pair (Miner_i, Miner_j): │
│ 1. Generate glider patterns │
│ 2. Initialize CA grid │
│ 3. Spawn gliders at positions │
│ 4. Evolve CA for 100 steps │
│ 5. Detect collisions │
│ 6. Determine winner │
│ 7. Generate ZK-SNARK proof │
│ 8. Create ring signature │
└────────────────────────────────────────┘
▼
Step 3: Round 2 Battles (250 battles)
┌────────────────────────────────────────┐
│ Winners from Round 1 → new pairings │
│ Repeat battle process │
└────────────────────────────────────────┘
▼
... (8 more rounds)
▼
Step 4: Final Battle
┌────────────────────────────────────────┐
│ Last 2 miners compete │
│ Winner = Block Producer │
└────────────────────────────────────────┘
▼
Step 5: Execute Smart Contracts
┌────────────────────────────────────────┐
│ For each contract call in mempool: │
│ 1. Load private state │
│ 2. Execute ZKVM instructions │
│ 3. Update state commitments │
│ 4. Generate execution proof │
│ 5. Record gas consumption │
└────────────────────────────────────────┘
▼
Step 6: Assemble Block
┌────────────────────────────────────────┐
│ Block Header: │
│ - prev_hash │
│ - merkle_root │
│ - tournament_winner (me!) │
│ - timestamp │
│ - difficulty │
│ │
│ Block Body: │
│ - Tournament battles (999 proofs) │
│ - Transactions (~2000) │
│ - Contract executions (~100 proofs) │
└────────────────────────────────────────┘
▼
Step 7: Broadcast to Network
┌────────────────────────────────────────┐
│ Send compact block to peers │
│ Peers request missing transactions │
│ Full block propagates across network │
└────────────────────────────────────────┘
TIMING BREAKDOWN (10-minute target)
────────────────────────────────────
CA Simulation: 200 seconds
ZK Proof Generation: 100 seconds
Contract Execution: 5 seconds
Contract Proofs: 5 seconds
Block Assembly: 1 second
Network Propagation: 10 seconds
────────────────────────────────────
TOTAL: 321 seconds ✓
VALIDATOR NODE BLOCK VERIFICATION SEQUENCE
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Step 1: Receive Block Header
┌──────────────────────────────────────┐
│ Parse block header from network │
│ Check: prev_hash points to known block
│ Check: timestamp reasonable │
│ Check: difficulty target valid │
└──────────────────────────────────────┘
✓ (1ms)
▼
Step 2: Validate Tournament Structure
┌──────────────────────────────────────┐
│ Verify pairing seed deterministic │
│ Check bracket structure correct │
│ Confirm winner advancement valid │
│ Validate final winner declared │
└──────────────────────────────────────┘
✓ (10ms)
▼
Step 3: Sample Verify Battles (Fast Path)
┌──────────────────────────────────────┐
│ Randomly select K=10 battles │
│ For each battle: │
│ - Verify ZK-SNARK proof (10ms) │
│ - Check ring signature (5ms) │
│ - Validate CA state commitment │
└──────────────────────────────────────┘
✓ (150ms)
▼
Step 4: Sample Verify Contracts
┌──────────────────────────────────────┐
│ Randomly select K=10 contract calls │
│ For each: │
│ - Verify execution proof (5ms) │
│ - Check state transition valid │
│ - Confirm gas metering correct │
└──────────────────────────────────────┘
✓ (50ms)
▼
Step 5: Accept Block (Fast Decision)
┌──────────────────────────────────────┐
│ Sample verification passed │
│ Add block to local chain │
│ Update UTXO set / state tree │
│ Relay block to peers │
└──────────────────────────────────────┘
✓ (1ms)
▼
┌─────────────────────────────┐
│ CRITICAL PATH COMPLETE │
│ Total Time: ~212ms │
└─────────────────────────────┘
▼ (asynchronous, non-blocking)
Step 6: Background Full Verification
┌──────────────────────────────────────┐
│ Verify ALL 999 battle proofs │
│ Verify ALL ~100 contract proofs │
│ Check ALL state transitions │
│ Validate ALL signatures │
└──────────────────────────────────────┘
⏱ (10+ seconds, but doesn't block)
▼
┌─────────────────────────────┐
│ If verification PASSES: │
│ → Keep block │
│ │
│ If verification FAILS: │
│ → Reject block │
│ → Revert to previous │
│ → Blacklist malicious peer│
└─────────────────────────────┘
COMPARISON TO BITCOIN
─────────────────────────────────────
Bitcoin Block Verification:
- Header validation: ~1ms
- Transaction validation: ~100ms
- Signature checks: ~50ms
- UTXO updates: ~10ms
TOTAL: ~161ms
This System:
- Header validation: ~1ms
- Tournament structure: ~10ms
- Sample battle proofs: ~150ms
- Sample contract proofs: ~50ms
- Accept decision: ~1ms
TOTAL: ~212ms ✓ (comparable)
PRIVACY-PRESERVING STATE ARCHITECTURE
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
┌────────────────────────────────────────────────────────────┐
│ PUBLIC STATE │
│ (Visible to all nodes, merkle tree root in block header) │
│ │
│ State Root: 0x7f3a9c... │
│ │ │
│ ├─ Account Tree │
│ │ ├─ Address A → Commitment_A │
│ │ ├─ Address B → Commitment_B │
│ │ └─ Address C → Commitment_C │
│ │ │
│ ├─ Contract Storage Tree │
│ │ ├─ Contract X → Storage_Root_X │
│ │ ├─ Contract Y → Storage_Root_Y │
│ │ └─ Contract Z → Storage_Root_Z │
│ │ │
│ └─ Nullifier Set │
│ ├─ Nullifier_1 │
│ ├─ Nullifier_2 │
│ └─ Nullifier_N │
└────────────────────────────────────────────────────────────┘
▲
│ Commitment/Nullifier
│ Public verification
▼
┌────────────────────────────────────────────────────────────┐
│ PRIVATE STATE │
│ (Known only to key holders, proven via ZK-SNARKs) │
│ │
│ User's Private View: │
│ ┌──────────────────────────────────────────────────┐ │
│ │ Address A: │ │
│ │ Balance: 1000 tokens (hidden as Commitment_A) │ │
│ │ Nonce: 42 │ │
│ │ Secrets: [secret_1, secret_2, ...] │ │
│ └──────────────────────────────────────────────────┘ │
│ │
│ Contract X's Private View: │
│ ┌──────────────────────────────────────────────────┐ │
│ │ Storage Slot 0: value_0 (encrypted) │ │
│ │ Storage Slot 1: value_1 (encrypted) │ │
│ │ Internal State: {...} (hidden) │ │
│ └──────────────────────────────────────────────────┘ │
└────────────────────────────────────────────────────────────┘
▲
│ ZK Proof
│ "State transition valid"
▼
┌────────────────────────────────────────────────────────────┐
│ STATE TRANSITION FLOW │
│ │
│ ┌─────────────────┐ │
│ │ Old Private │ │
│ │ State │ │
│ └────────┬────────┘ │
│ │ │
│ │ Known only to owner │
│ ▼ │
│ ┌─────────────────┐ ┌──────────────────┐ │
│ │ Transaction/ │────────→│ ZK Circuit │ │
│ │ Contract Call │ Private │ Verification │ │
│ │ │ Inputs │ │ │
│ └─────────────────┘ └────────┬─────────┘ │
│ │ │
│ │ Generates │
│ ▼ │
│ ┌─────────────────┐ │
│ │ ZK Proof │ │
│ │ (200 bytes) │ │
│ └────────┬────────┘ │
│ │ │
│ │ Posted on-chain │
│ ▼ │
│ ┌─────────────────┐ ┌──────────────────┐ │
│ │ New Public │←────────│ Verify Proof │ │
│ │ Commitment │ │ Update Nullifier│ │
│ └─────────────────┘ └──────────────────┘ │
│ │ │
│ │ Commitment visible to all │
│ ▼ │
│ ┌─────────────────┐ │
│ │ New Private │ │
│ │ State │ │
│ └─────────────────┘ │
│ │ │
│ │ Known only to owner │
│ ▼ │
│ (cycle repeats) │
└────────────────────────────────────────────────────────────┘
PRIVACY GUARANTEES
──────────────────────────────────────
Public Knowledge:
✓ Commitment exists (hash of state)
✓ State transition occurred
✓ Transition was valid (ZK proof)
✓ Nullifier prevents double-spend
Hidden Information:
✗ Actual balance/amounts
✗ Transaction sender/receiver
✗ Contract internal state
✗ Function arguments
✗ Computation details
TOURNAMENT ANTI-CARTEL MECHANISM
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Scenario: 40% of miners form a cartel
Cartel size: C = 400 miners
Honest miners: H = 600 miners
Total: N = 1000 miners
┌────────────────────────────────────────────────────────────┐
│ ROUND 1 PAIRINGS │
│ (500 random pairs) │
│ │
│ Expected Cartel-Cartel pairs: C²/(2N) = 80 pairs │
│ Expected Honest-Honest pairs: H²/(2N) = 180 pairs │
│ Expected Mixed pairs: C×H/N = 240 pairs │
│ │
│ ┌──────────┐ ┌──────────┐ ┌──────────┐ │
│ │Cartel vs │ │Honest vs │ │Cartel vs │ │
│ │ Cartel │ │ Honest │ │ Honest │ │
│ │(80 pairs)│ │(180pairs)│ │(240pairs)│ │
│ └────┬─────┘ └────┬─────┘ └────┬─────┘ │
│ │ │ │ │
└───────┼─────────────┼─────────────┼─────────────────────────┘
│ │ │
▼ ▼ ▼
┌─────────────────────────────────────────────────────────────┐
│ CARTEL COORDINATION PROBLEM │
│ │
│ Cartel-Cartel Pairs (80 pairs): │
│ ┌──────────────────────────────────────────────┐ │
│ │ Cartel can coordinate: │ │
│ │ Option A: Both try to win (wasted effort) │ │
│ │ Option B: One throws match (coordination) │ │
│ │ │ │
│ │ Problem: Ring signatures hide identities │ │
│ │ → Cannot coordinate without revealing members│ │
│ │ → Revealing members enables targeted attacks │ │
│ └──────────────────────────────────────────────┘ │
│ │
│ Mixed Pairs (240 pairs): │
│ ┌──────────────────────────────────────────────┐ │
│ │ Cartel member vs Honest miner │ │
│ │ │ │
│ │ Cartel CANNOT coordinate because: │ │
│ │ 1. Don't know opponent is honest │ │
│ │ 2. Must compete to win (can't throw) │ │
│ │ 3. Honest miner has no reason to cooperate │ │
│ │ 4. Individual skill determines outcome │ │
│ └──────────────────────────────────────────────┘ │
└─────────────────────────────────────────────────────────────┘
│ │
▼ ▼
┌──────────────────────────┐ ┌──────────────────────────┐
│ Cartel Coordination │ │ Individual Competition │
│ Payoff Matrix │ │ Payoff (Nash Eq) │
│ │ │ │
│ Cooperate Defect │ │ Honest Effort: +100 │
│ Coop +50 +0 │ │ Throw Match: -10 │
│ Defect +150 +100 │ │ Coordination: -50 │
│ │ │ │
│ Defection dominant! → │ │ Best Strategy: │
│ Cartel unstable │ │ → Compete honestly │
└──────────────────────────┘ └──────────────────────────┘
│ │
└──────────────┬──────────────────────┘
▼
┌─────────────────────────────────────────────────────────────┐
│ EXPECTED OUTCOMES │
│ │
│ Round 1 Winners: │
│ - Cartel members: ~200 winners (40% of 500 battles) │
│ - Honest miners: ~300 winners (60% of 500 battles) │
│ │
│ Round 2 Winners: │
│ - Cartel: ~100 (40% of 250) │
│ - Honest: ~150 (60% of 250) │
│ │
│ ... (progresses through log₂ N rounds) │
│ │
│ Final Winner Probability: │
│ - Cartel member: ~40% (proportional to size) │
│ - Honest miner: ~60% │
│ │
│ *** Cartel provides NO advantage over individual mining ***│
└─────────────────────────────────────────────────────────────┘
│
▼
┌─────────────────────────────────────────────────────────────┐
│ WHY CARTELS FAIL IN THIS SYSTEM │
│ │
│ 1. Random Pairing: │
│ → Cannot predict opponents │
│ → Cannot avoid competing with cartel members │
│ │
│ 2. Ring Signatures: │
│ → Identities hidden during battles │
│ → Coordination requires revealing identities │
│ → Revelation enables attacks/detection │
│ │
│ 3. Pairwise Competition: │
│ → Only 2 miners compete at a time │
│ → No way to pool hash power │
│ → Individual skill is the only advantage │
│ │
│ 4. Progressive Elimination: │
│ → Cartel members eliminated by each other │
│ → Cannot all advance simultaneously │
│ → No mechanism to coordinate advancement │
│ │
│ 5. Game Theory: │
│ → Defection always individually rational │
│ → Coordination costs exceed benefits │
│ → Nash equilibrium is honest competition │
│ │
│ RESULT: Cartel formation economically irrational │
└─────────────────────────────────────────────────────────────┘
COMPARISON TO BITCOIN
─────────────────────────────────────────────────────────
Bitcoin Mining Pools:
Problem: Pools coordinate to reduce variance
Reality: 3 pools control >50% of hashrate
Result: Severe centralization
This System:
Mechanism: Coordination is game-theoretically unstable
Reality: Individual competition is Nash equilibrium
Result: Natural decentralization
This specification defines a blockchain architecture that combines three breakthrough innovations:
-
Anti-Cartel Consensus: Tournament-based proof-of-work makes mining cartel coordination game-theoretically unstable, solving Bitcoin's centralization problem through cellular automaton competition dynamics.
-
Native Privacy: Zero-knowledge smart contracts provide privacy-preserving programmable computation without bolt-on layers, enabling confidential DeFi applications.
-
Scalable Architecture: Longest chain consensus eliminates synchronization bottlenecks whilst maintaining security, enabling practical deployment at scale.
The system makes explicit trade-offs favouring decentralization and privacy over raw throughput, targeting high-value financial applications rather than mass-market microtransactions. Implementation complexity is higher than conventional blockchains, but the technical and economic benefits justify the additional engineering effort.
The architecture is feasible with current technology, buildable within 24 months by a competent team, and positions itself to capture the emerging privacy-focused DeFi market whilst solving fundamental problems in blockchain decentralization.
END OF SPECIFICATION