The Arbitrum Network has launched as the a leading layer 2 solution to Ethereum and has a world class leading ecosystem for permissionless, transparent, and immutable software applications. These software applications, typically taking the form of Smart Contracts, can all seamlessly interact with each other. To facilitate this process, various standard protocols have been developed such as the ERC20 standard for a common ‘token’ format so that these Smart Contracts can pass scarce, owned, and transferable data between one another without a centralized mediator. Most ERC20 tokens have been distributed in a matter that is generally known to align with ‘securities.’ The tokens are sold to ‘investors’ by the ‘creator’ under the pretenses that the ‘creator’ will perform some action to make the tokens more valuable. It should be clarified that Bitcoin is distributed via ‘bitcoin mining’ and therefore aligns itself as a ‘commodity’ and not a ‘security.’ This whitepaper will describe a ERC20 token that aligns itself as a ‘commodity’ since it is distributed only using ‘Proof of Work Mining’ identical to the Bitcoin model. This token is also transferred on a blockchain in a method very similar to Bitcoin and so therefore interfaces with other software and with the world in a manner which is effectively identical to Bitcoin. This token has several advances that set it apart from Bitcoin such as the ability to directly interact with Arbitrum Smart Contracts and the rest of the Arbitrum/ Ecosytem in a permissionless way.
Mineable Token is the implementation of Bitcoin in Solidity and is the first decentralized ERC20 token for Arbitrum. It is an open source community project, not led by an official team or corporation, and therefore does not have ICO capital or other vast amounts of currency/capital that a centralized token project would have. We believe as a community that decentralization is the true flavor of the blockchain and that is the architecture that provides open and transparent trust for users. We also believe that Arbitrum and ERC20 tokens are a significant segment of the future of blockchain technology.
Mineable Token is designed to be used as a decentralized ‘bitcoin-like’ token within the Arbitrum ecosystem and beyond. All tokens are minted on the Arbitrum One Blockchain. Mineable Token follows a standard protocol (ERC20), tokens are stored on the Arbitrum One Blockchain address and it is transferred using standard software which supports EIP20/ERC20 tokens. Since every Mineable Token has been mined in a completely decentralized manner, there is no central body or central organization which controls or enforces any aspect of Mineable Token. The community owns and operates the token in a flat structure and every individual has the same power over the smart contract as any other individual. This is on purpose in order to follow the same model of Bitcoin and to establish Mineable Token as a commodity.
One of the most effective side effects of Satoshi Nakamoto's desire to secure the original Bitcoin network with Proof of Work hash mining was tethering and bootstrapping the coin to computing power, thereby removing centralized actor jurisdiction. Transitioning the responsibility of work back onto individual miners, government organizations would have no jurisdiction, and indeed visibility, of mined Mineable Token. Government oversight is removed from an equation whereby miners are providing economic effort in direct exchange of a cryptographic commodity. This facilitates relatively decentralized distribution and establishes all involved parties as stakeholders. Mineable Token (0xMT) is a token that allows projects to be funded not by centralized, direct-fiat conversion, but through decentralized computing power.
The name Mineable Token is derived from the fact it is a token that is able to be mined.
The symbol 0xMT is from a combination of the term ‘0x’ which implies that the asset lives on a Ethereum Virtual Machine (EVM) and the first character of each word of our token.
The Mineable Token contract is located at Arbitrum address 0xAe56c981F9bb8b07E380B209FcD1498c5876Fd4c and has validated transparent code which can be audited on the Arbiscan service.
The Arbitrum One blockchain in its current state exists as a thriving permissionless ecosystem which allows any individual to store immutable records in a permissionless, invulnerable and transparent manner. As blockchain applications become richer and more numerous, there is a need for alternative distribution models than the ICO. Indeed, there have been proposals to mitigate some initial investment risks through the recent introduction of the DAICO model (Cunningham, 2018) that rely on timed and automated value transfers via the DIACO smart contract tapping mechanism. However, this does not align a token smart contract as a non-security and still has the potential to put investors at risk if not implemented carefully. Allowing users of the network direct access to tokens by performing computations as a proof of work supplies allows any smart contract to distribute a token in a safe, slow, and controlled manner similar to the release of a new commodity.
As of 2023, most all Ethereum Virtual Machine token distribution methods were flawed and able to be Sybil attacked. A Sybil attack is a form of computer security attack in which one human pretends to be many humans with multiple computer accounts in order to manipulate a system in a malicious way. ICOs and airdrops are highly susceptible to Sybil Attacks and since there is no way to verify that all ERC20 tokens distributed by the deployer distributed fairly or unfairly. Mineable Token, with its unique Proof of Work distribution method, is resistant to Sybil attacks. This means that Mineable Token is used as a trustless EVM token in the world. It can be argued that the distribution of Mineable Token is fair since it was only distributed by mathematical hashing and not by a human.
As an implementation of the original Bitcoin software as an Arbitrum Smart Contract, Minaeble Token (or 0xMT) combines advantages from both Bitcoin, Ethereum and Arbitrum One Layer 2s. The asset is decentralized, permissionless, mined and scarce just like Bitcoin which means it shares all of Bitcoin’s usecases and properties as a transparent and permanent digital record of value. However, above Bitcoin, Mineable Token has the speed and scalability of the Arbitrum network and is compatible with all ERC20 token services. This means it can be stored in any EVM wallet, is as secure as Arbitrum One blockchain, and can act as ‘the bitcoin’ for the ecosystem. This is important because Bitcoin is not able to communicate with or interact with the EVMs of Ethereum or Layer 2s. With Mineable Token, the Arbitrum network is now effectively upgraded with the ability to interface with a commodity which shares all of the same properties as Bitcoin. Now, all Arbitrum smart contracts can hold, transfer, and trade bitcoin-like tokens permissionlessly and can do so based on immutable rules set forth using their own computer code.
Since Mineable Token is mined like Bitcoin, it acts just like a commodity. The difficulty of ‘mining’ this commodity automatically adjusts to the total computational power used to mine it. The current state of the EVM ICO market with its demonstrable failure rate leaves investors vulnerable to holding pseudo-value backed only by speculation. Mineable Token mitigates this problem by providing the Arbitrum One blockchain network with a decentralized bitcoin-like asset which is able to fill the role of a multitude of centralized tokens in a more invulnerable and trustless format.
This powerful mechanism frees individuals from having to use a third party exchange, susceptible to security holes and wallet compromise, and third party escrows. The movement away from centralization is a core tenant of what Satoshi Nakamoto originally intended with classic Bitcoin (Nakamoto, 2009). Mineable Token has the facilities to help keep the Ethereum ecosystem open, accountable, trustless and decentralized at every step in the value transfer process. Unlike Bitcoin, Mineable Token can interact decentralzied exchanges such as Uniswap, Sushiswap, and is compatible with Arbitrum one smart contracts. This means that while Bitcoin can only be traded using centralized means, Mineable Token can be traded permissionlessly within immutable permanent smart contracts which are not able to be censored or restricted by central entities. This is another clear advantage and is closer to fulfilling Satoshi’s complete vision.
As an ERC20 token, Mineable Token uses a traditional Arbitrum account. These accounts are free and are impossible to hack or to steal from, given that the private key has not been exposed. Mineable Token can be stored in a Ledger Nano, Trezor or any other wallet that supports ERC20 tokens.
Mineable Token is mined using a simple Keccak256 (Sha3) algorithm using the following methodology:
keccak256(nonce, minerEthAddress, challengeNumber) < difficultyTarget
The nonce is a random number selected by the mining software. The mining software mines to try to find a valid nonce. If the above statement evalutates to true, then the nonce is a valid solution to the proof of work. The challengeNumber is just a recent Arbitrum block hash. Every round, the challengeNumber updates to the most recent Arbitrum block hash so future works cannot be mined in the past. The miner's address is part of the hashed solution so that when a nonce solution is found, it is only valid for that particular miner and man in the middle attacks cannot occur. This also enables pool mining.
When mining Mineable Token, whenever a miner submits a solution, the miner must pay a small gas fee in order to execute the Arbitrum smart contract code for the mint() function.
Typically, ERC20 tokens will grant all tokens to the owner or will have an ICO which demands that amounts of Ether be sent to the owner for an initial offering of tokens. Instead of granting tokens to the 'contract owner', all Mineable Tokens are locked within the smart contract initially. These tokens are dispensed, 50 at a time, by calling the function 'mint' and using Proof of Work, similar to mining bitcoin classic. Also the following Smart Contract methods are explicitly supported:
Returns the name of the token - e.g. "Mineable Token".
OPTIONAL - This method can be used to improve usability, but interfaces and other contracts MUST NOT expect these values to be present.
function name() constant returns (string name)
Returns the symbol of the token. e.g. "0xMT".
OPTIONAL - This method can be used to improve usability, but interfaces and other contracts MUST NOT expect these values to be present.
function symbol() constant returns (string symbol)
Returns the total token supply.
function totalSupply() constant returns (uint256 totalSupply)
Returns the account balance of another account with address _owner.
function balanceOf(address _owner) constant returns (uint256 balance)
Returns a flag indicating a successful hash digest verification. In order to prevent MiTM attacks, it is recommended that the digest include a recent Arbitrum block hash and msg.sender's address. Once verified, the mint function calculates and delivers a mining reward to the sender and performs internal accounting operations on the contract's supply.
function mint(uint256 nonce, bytes32 challenge_digest) public returns (bool success)
Upon successful verification and reward the mint method dispatches a Mint Event indicating the reward address, the reward amount, the epoch count and newest challenge number.
event Mint(address indexed from, uint reward_amount, uint epochCount, bytes32 newChallengeNumber);
Recent Arbitrum block hash, used to prevent pre-mining future blocks.
function getChallengeNumber() public constant returns (bytes32)
The number of digits that the digest of the PoW solution requires which typically auto adjusts during reward generation.Return the current reward amount. Depending on the algorithm, typically rewards are divided every reward era as tokens are mined to provide scarcity.
function getMiningDifficulty() public constant returns (uint)
Return the current reward amount. Depending on the algorithm, typically rewards are divided every reward era as tokens are mined to provide scarcity.
function getMiningReward() public constant returns (uint)
Returns a test digest using the same hashing scheme used when minting new tokens.
function getMintDigest(uint256 nonce, bytes32 challenge_digest, bytes32 challenge_number) public view returns (bytes32 digesttest)
OPTIONAL - This method can be used to improve usability, but interfaces and other contracts MUST NOT expect these values to be present.
Verifies a sample solution using the same scheme as the mint method.
function checkMintSolution(uint256 nonce, bytes32 challenge_digest, bytes32 challenge_number, uint testTarget) public view returns (bool success)
OPTIONAL - This method can be used to improve usability. but interfaces and other contracts MUST NOT expect these values to be present.
Verifies a sample solution using the same scheme as the mint method.
function checkMintSolution(uint256 nonce, bytes32 challenge_digest, bytes32 challenge_number, uint testTarget, address sender) public view returns (bool success)
OPTIONAL - This method can be used to improve usability.
The Mineable Token was deployed to the Arbitrum blockchain in May, 2023, with the following attributes:
As such, the only way for a user to acquire Mineable Tokens is to mine them or purchase them from miners on decentralized exchanges. The mint function is responsible for verifying the validity of the hash solution, updating the contracts internal state and issuing new Mineable Token.
function mint(uint256 nonce, bytes32 challenge_digest) public returns (bool success) {
bytes32 digest = keccak256(abi.encodePacked(challengeNumber, msg.sender, nonce));
//the challenge digest must match the expected
require(digest == challenge_digest, "Old challenge_digest or wrong challenge_digest");
//the digest must be smaller than the target
require(uint256(digest) < miningTarget, "Digest must be smaller than miningTarget");
_startNewMiningEpoch();
balances[msg.sender] = balances[msg.sender].add(reward_amount);
tokensMinted = tokensMinted.add(reward_amount);
emit Mint(msg.sender, reward_amount, epochCount, challengeNumber );
return true;
}
figure 1. Mineable Token Smart Contract mint() function
The mining reward is initially gathered and follows the same algorithm as Bitcoin classic. Essentially following the paradigm of a fully decentralized monetary system, whereby the tokens are created by the nodes of a peer to peer network. The Mineable Token algorithm defines how the token will be created and at what rate.
As with Bitcoin, Mineable Tokens are generated every time a user discovers a new block by being the first to submit Proof of Work for each round.
A unique 'nonce' has to be passed into the mint function along with the hash solution digest in order for tokens to be dispensed. To find this special number, it is necessary to run a mining program. More specifically, the PoW includes a recent Arbitrum block hash combined with the wallet sender's address in order to prevent man in the middle attacks when minting new coins. The challenge and nonce are validated in solidity using the keccak256 hashing algorithm to decipher the challenge's digest. Once the digest has been extracted, it is validated to match the expected challenge result and then check to ensure that it is smaller than the mining target difficulty.
The mining reward is calculated based on the logarithmic halving algorithm making the Mineable Token a reliably deflationary asset. The award is immediately assigned to the sender's wallet address and the ‘tokens minted count’ is incremented within the smart contract for any other software to monitor. Notably, the contract then validates that the tokens minted count is less than or equal to the maximum supply or the given halving era that transaction is taking place. Next, the contract records diagnostics reflecting reward address, amount and ether block number for the purpose of public transparency and for other software to monitor.
After every block is minted, the smart contract will determine if it is time to adjust the difficulty. This occurs every 1024 mined blocks in the first era. Just before this occurs, the contract increments the reward era if necessary - this is, if the tokens minted count has exceeded the maximum era supply which is calculated via a simple halving algorithm:
max_era_supply = total_supply - (total_supply / (2 * (reward_era + 1)))
This means that the first era supply is 10500000 tokens, the second era supply is 15750000 tokens, the third era supply is 18375000 tokens and so forth. During the first era, the block reward for a mint() is 50 tokens at 12 minute blocks. During the second era, the reward is 50 tokens at 24 minute blocks. During the third era, the reward is 50 tokens and at 48 minutes. During the forth era, the reward is 50 tokens and at 96 minute blocks. During the fifth era, the reward is 25 tokens and at 96 minute blocks. During the sixth era, the reward is 12.5 tokens at 96 minute blocks. And so on and so on. There are fifteen eras total that will reduce the supply rate and then it will stay consistant 0.01220703125 Mineable Tokens every 96 minutes forever, increasing past a total possible 21,000,000 tokens, but not by much. This is expected to take about 60 years at which time Mineable Token can be used as a decentralized digital currency for Ethereum, Arbitrum, and all Layer 2s.
The reward era is used to calculate the mining reward. Next, the Mineable Token smart contract adjusts the difficulty by first determining how much time has passed since the last adjustment. If less than 12 minutes * 1024 blocks had been mined, Mineable Token is being mined too quickly and the difficulty will increase. This is accomplished by reducing the size of the ‘target’. When the target is smaller, valid nonces for minting are more rare and are harder to find for future mining rounds. Alternatively if Mineable Token is being mined too slowly the target will increase in value in order to make minting more easy to accomplish. All difficulty targets are bound within minimum and maximum difficulties of 216 and 2234 respectively.
To calculate approximate hashrate or approximate time to find a solution, the following equation can be used:
TimeToSolveBlock (seconds) = (difficulty * 2 ^ 22) / hashrate (hashes per second)
Mineable Token is implemented as an Arbitrum ERC20 token and so its success is largely dependent on the success of the Arbitrum and Ethereum Network. If Arbitrum cannot scale, then Mineable Token will not be able to realize its full potential as the fastest and most effective decentralized currency in the world.
No. Mineable Token exists on the Arbitrum Blockchain as a Smart Contract. This allows it to leverage a faster, more secure and modern crypto environment.
The difficulty was too low compared to hashrate and so multiple valid solutions were submitted to the contract in a very short amount of time. Only one can be accepted each round and so the others are reverted.
Essentially the same way that pool mining works for classic Bitcoin, except Mineable Token pools must pay gas fees to the Arbitrum network.
Every 1024 blocks for 1st rewardEra, then 512 in the 2nd RewardEra, then 256 in the 3rd ReardEra, and then finally 128 in 4th rewardEra. Then it stays at 128 forever.
It increases up to 100% or down 50% about every 5 - 20 days. averages to 8.5 days.
At 10.5m tokens mined and when half the remaining has been mined then half of that remaining then half of that remaining, up to 15 iterations.
As long as cryptocurrencies exists, mining will always exist. Even though mining expends energy, it ultimately reduces corruption in society by providing humanity with decentralized and transparent transactional ledgers. Therefore the idea similar to humanity having to pay for a gigantic decentralized accounting system or police network which is reducing the widespread financial corruption across the globe. Just as we pay police officers and accountants for their service, we pay blockchain for its service in the form of energy and computation.
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