Cryptocurrency: Asicboost Update, Defensive Patent Licenses

grarpamp grarpamp at
Sun May 6 12:05:05 PDT 2018

Opening AsicBoost for Defensive Use

March 1, 2018

We are announcing today, that we committing to the Blockchain
Defensive Patent License, meaning the AsicBoost patent will be
available under these terms once the PCT patent has been granted. We
would like to share the thought process that has lead us to this

AsicBoost is an innovation that allows more energy efficiency when
grinding SHA256 based proof-of-work used in Bitcoin mining. There are
two forms of AsicBoost, one that provides optimizations by
manipulating the merkle tree, and the other way which ultimately uses
two bits from the nVersion field. The merkle method is also known as
“covert AsicBoost” because it is difficult to detect. This method has
received a lot of bad publicity in recent times because the method is
easier to perform with low transaction count, and thus, smaller or
empty blocks. Some variants of this merkle grinding also interfere
with so called coinbase commitment schemes which negatively impacts
protocol changes on Bitcoin.

We have strong reason to believe that some manufacturers of mining
equipment have been secretly using this covert method to evade
detection by the patent holder and gain unfair advantage over others
but not revealing what they were doing, and without making it known to
the patent holders.

Conversely, version-rolling method of AsicBoost is completely
transparent in the blockheader of each boosted Bitcoin block. The
method has no negative side-effects, like encouraging miners to mine
less transactions and thus smaller blocks.

A feature of Bitcoin is permissionless participation, and patents are
a genuine concern to the Bitcoin community if wielded in a way to
stifle competition. This could have a centralizing effect on the
protocol and mining, and ultimately impact the security and guarantees
afforded by decentralization.

There are a number of what we consider, dangerous patents, in the
mining space, which could be used to suppress mining competition.
Hardware patents are a particular concern because they are agnostic to
POW algorithm changes. At the time of writing, the largest mining
manufacturer is using a hardware patent against a competing mining
manufacturer. While the patent is considered prior art by most, it is
a granted patent, and thus backed by state enforcement. We believe
this sets a dangerous precedent and could escalate in the future. The
patent concerned can be considered an essential patent because it
governs how power is efficiently distributed on hash cards (the board
which host the mining chips).

Defensive Licensing schemes aim to incentivize patent holders to pool
their patents in such a way to create a disincentive for patent
aggressors. The most famous is the Defensive Patent License. However,
on closer investigation, it appears the license scheme is wanting when
applied to blockchain technology that required strong guarantees of
decentralization. A fantastic analysis was made by BitMEX Research
Labs in a recent publication.

We believe AsicBoost is such an important an innovative patent that,
if licensed defensively, can become a force for good to protect
decentralization in Bitcoin. At this point, it is clear that covert
AsicBoost does not serve the interests of Bitcoin due to the negative
incentives outlined, however, version-rolling AsicBoost has none of
these drawbacks, and is additionally more efficient than covert merkle
grinding. No matter how efficient a mining machine is made at hardware
level, version-rolling AsicBoost will always deliver more efficiency
when done correctly. If this method of version-rolling is used by a
large portion of the hash-rate, there may be no escaping the need for
all mining equipment manufacturers to use it to remain competitive.

As such, today, we are offering the AsicBoost patent under the
Blockchain Defensive Patent License in the hope that it will both
discourage patent aggression in the mining space and encourage others
to join the licensing regime. This will create a powerful patent pool
and protect the interests of Bitcoin, which is in the best long-term
interest of everyone in the ecosystem.

Lastly, because we have spent considerable resources on acquiring and
opening the patent for the benefit of the Bitcoin community, in return
we welcome donations towards our costs. If you would like your
contribution to be publicly acknowledged on this page, please contact
us on donations at

Bitcoin BTC donation address: 3PMR379VLzfnGHck9BLdE1HuhdXUm96JHj.

Our BDPL offering announcement can be found here.

For more inquiries, please use our contact form.

Offering Announcement for Blockchain Defensive Patent License

March 1, 2018

This Offering Announcement is issued by Little Dragon Technology LLC,
California, USA (“Licensor”). All capitalized terms herein have the
meaning as defined in the applicable numbered version of the
Blockchain Defensive Patent License.

Licensor hereby commits to offer all of its Patents and future patents
under the Blockchain Defensive Patent License version 1.0 or greater
(“License”) to any BDPL User. The Licensor shall refer to the License
for the procedures on granting and accepting such License.

Date: March 1, 2018

Licensor’s contact information is: licensing at

Little Dragon Technology LLC
c/o Getech Law LLC
attn Jun Ye, Esq.
203 N LaSalle, Suite 2100
Chicago, IL 60601

AsicBoost Press Release

March 24, 2016

A breakthrough invention in Bitcoin mining named AsicBoost allows to
improve the total cost of hashing 20%. The patent-pending invention by
Timo Hanke and Sergio Demian Lerner is applicable to any type of chip
design for Bitcoin ASICs.

AsicBoost is a patent-pending method to improve the efficiency and
cost of Bitcoin mining by approximately 20%. Through gate count
reduction on the silicon AsicBoost improves two essential Bitcoin
mining cost metrics simultaneously and by a similar factor: the energy
consumption (Joule per Gh) and the system cost ($ per Gh/s). With the
system cost being proportional to the capital expenses of a Bitcoin
mine and the energy efficiency being proportional to its operating
expenses, AsicBoost reduces the total cost per bitcoin mined by
approximately 20%. For the Bitcoin mines of the future AsicBoost will
make all the difference between a profitable and an unprofitable mine.

The AsicBoost method is based on an ingenious new way to process work
items inside and outside of the Bitcoin mining ASIC. It involves a new
design of the SHA 256 hash-engines inside the ASIC and an additional
pre-processing step as part of the mining software outside the ASIC.
AsicBoost’s hash-engine design is compatible with design philosophies
such as “rolled cores” and “fully pipelined cores”. The performance
gains are achieved on top of all other optimizations that an existing
design may have achieved through optimized timing, pipelining, path
balancing, custom cells and full-custom design, etc.

Inventor Timo Hanke describes the idea behind AsicBoost as follows:
“Through clever pre-processing and crafting of the work that is sent
to the chip, the ASIC is allowed to re-use about one quarter of the
information that would otherwise be created and discarded on a
continuous basis internally to the hashing cores. A hashing core
adopted for AsicBoost can save up to one quarter of the gates by
re-using that information over time or by sharing it with other
hashing cores.”

More information and a technical description of the AsicBoost method
can be found on

For licensing inquiries or consulting on the adoption of AsicBoost
please contact asicboost at

About Timo Hanke

Timo is a mathematician and cryptocurrency expert. He has been a
long-time academic researcher with a PhD in mathematics, a long-time
Bitcoin enthusiast and contributor, and has had the role of CTO at a
Bitcoin ASIC manufacturer.

About Sergio Demian Lerner

Sergio is a renowned security and cryptocurrency expert and
researcher, inventor, contributor to the Bitcoin core software, the
mastermind behind several inventions in Blockchain technology,
security advisor to the Bitcoin Foundation, co-founder of RootStock
Labs, among many other things.

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