Simulating difficulty adjustment in blockchain with SimBlock

A blockchain is a gradually increasing list of "blocks"containing information that are linked together using cryptographic hashes. It is a distributed, decentralized, and public digital ledger technology. Blockchains have caught not only the attention of researchers but also industries that are interested in implementing blockchains into existing products and services. However, performing studies on actual blockchain networks remain challenging as they may involve many nodes or these nodes could be placed in different geographical regions. Simulators for Proof-of-Work blockchain exists to facilitate this, but features such as difficulty adjustment or dynamic hash rate are not available. Using SimBlock, a blockchain network simulator as a base, difficulty adjustment algorithm and the capacity to increase or decrease hash rate dynamically were added to the simulator and the efficacy of the implementation was investigated for two scenarios; fixed hash rate and increasing hash rate periodically, over the length of the simulations. Based on the experiments, higher precision in terms of the average of actual time taken to mine a block were obtained, with a deviation of 0.68% compared to 5.73% in original SimBlock, and a deviation of 7.10% compared to 10.91% in original SimBlock, for fixed hash rate and dynamic hash rate adjustment respectively. Further studies were conducted for data from 2019 where the proposed implementation resulted in less than half the deviation achieved by the original implementation of SimBlock.