Ethereum could be considered a descendant of Bitcoin.
They’re similar in many key respects; they both seek to innovate and create something with unique utility. However, when it comes to abandoned blocks, this is where Bitcoin and Ethereum differ.
With the Bitcoin protocol, the longest chain is considered the absolute truth. If a block is not part of the longest chain then it is ‘orphaned’ (abandoned). An orphaned block is a block that is the same size as the correct block but is not part of the longest chain. This could occur if the mathematical equation to achieve that block happened just slightly after the other accepted block, and it did not propagate through the network fast enough to be included in the longest chain.
The miner responsible for that orphaned block then loses the reward associated with mining, when it otherwise, would have been a valid block.
GHOST and Uncles - Heavier vs. Longer Chains
Ethereum’s GHOST protocol treats orphaned blocks differently by giving them value. Orphaned blocks in Ethereum are called “uncles” and they can contribute to the security of the main chain.
Relatively speaking, Bitcoin has a long block time. It takes an average of around 10 minutes (give or take) to achieve a single confirmation on the Bitcoin blockchain. Statistically, a confirmation inside ten minutes will occur about 63% of the time.
Since the inception of Bitcoin, a large body of research about blockchain technology has developed. This research demonstrates that faster blocks are indeed possible, which could be desirable for a variety of reasons. However, the trade-off for having faster blocks would be an increase in the rate of orphaned blocks, which is costly and ineffective.
Ethereum’s GHOST protocol solution gives these orphaned (‘uncle’) blocks an economic value on the network. Remember ‘uncles’ are also correct blocks. They aren’t the same size as the correct block that is on the chain and have had a valid proof of work go into them. Yet often, due to reasons of network propagation, they were not included onto the longest chain.
The GHOST protocol pays for uncles, which incentivizes miners to include uncles in a mined block by referencing uncles in a new field in the header of each block. Reference to these uncles makes the chain heavier. In Bitcoin, the longest chain is the main chain. In Ethereum it is the “heaviest.”
Theoretically, this protocol which opts to pay for uncles incentivizes miners, gives value to otherwise abandoned resources and produces more chain security. Creating a “heavier” chain with valid proof-of-work blocks, adds to the security of that chain.
Ultimately, uncle mining is an added complexity that will provide useful experimentation and research. Already some non-critical vulnerabilities have been found in this approach. For example, payments for uncles act to incentivize miners who have more than 12.5% of the hashing power. Uncle mining is the most profitable at 12.5% - 37% hashing power but is similar to the possible conflicts of selfish mining in Bitcoin (which is considered a 25% attack against the Bitcoin network). More time is needed to determine the benefits of uncle mining and whether it is actually fully sustainable. Until then, the consequences of the GHOST protocol’s treatment of uncles can only be theorized.
In truth, uncle mining is a key part of what makes Ethereum so unique and showcases it as a bold experimental protocol. It’s a novel innovation from Bitcoin’s treatment of orphaned blocks, and it’s an important demonstration of Ethereum’s cutting edge blockchain technology.