The popularity of cryprocurrencies has been skyrocketing since the launch of bitcoin’s network in 2009. Bitcoin’s security is highly dependent on proof-of-work PoW algorithms which require miners to possess enormous computational power , for the protocol to be implemented successfully. Even though the past few years have witnessed great development in mobile technologies, no cryptocurrencies have ever been created especially for mobile devices, due to the minimal computational power of even the most advanced mobile device.
A group of developers recently proposed LocalCoin; a new altcoin that requires minimal computational resources, works efficiently with off-the-shelf mobile phones and produces low data traffic. LocalCoin’s protocol substitutes the computational hardness, which is the cornerstone of bitcoin’s security, with social hardness which guarantees that all witnesses of a given transaction are colluders. While computational hardness offers a “weakest link” security guarantee, social hardness offers a “strongest link” guarantee, as if only one of the transaction’s witnesses is not cooperative, the scheme will not be broken. This renders it possible to implement the same protocol across mobile environments without the need for high computational power or internet connectivity.
LocalCoin features a decentralized blockchain that relies on a lightweight proof-of-work (PoW) algorithm to offer dense mobile networks a secure payment system. Considering double spending attacks, the developers of the coin consider the geolocation of each user validating the generation of a new block. A block will only be accepted when the euclidean distance between nodes validating blocks is larger than a certain threshold. This guarantees that the information regarding a given transaction propagates adequately across the network. Throughout the paper, the developers proved that if the network is dense enough, the probability of a successful double spending attack is limited by the inverse of the square of number of users across LocalCoin’s network. They also showed that the probability of a successful double spending attack, launched by an adversary hiring colluders to participate in the attack, is very low.
LocalCoin is a new altcoin protocol that is especially designed for mobile devices. The protocol which is adapted to the low processing capabilities of mobile devices, relies on special PoW schemes and social hardness to offer a secure payment system for dense mobile networks.