BHP Network Yellowpaper

Friday, June 7, 2019
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BHP Blockchain of Hash Power Yellowpaper for Economic Model Version:V2.1 2019.3 第 1 页

BHP (Blockchain of Hash Power) is a distributed payment system based on Bitcoin hash power credit. It uses Bitcoin hash power as the underlying asset and takes 21 decentralized hyper nodes as the community accounting consensus nodes. The system is focusing on providing users with fast, convenient and highly reliable digital currency payment and asset management services based on smart contracts with blockchain technology. At the same time, all BHP holders automatically receive dividends from Bitcoin hash power assets. 1. Distribution Mechanism The original COIN of public chain—BHP Coin, is the ecological equity token of the BHP public chain, which is similar to the equity certificate. The total amount of BHP Coin is 100 million, and the minimum unit is 0.00000001. The issuance quota of BHP: 55% is mined by PoS and 45% is directly generated in the genesis block. Among the directly generated 45 million BHPs: 25 million BHPs are used to exchange the circulated BHPC ERC20 tokens legally held by early users of the BHP community. The exchange rate is 1:1. 10 million BHPs are held by technical team and genesis node for medium and long-term incentives. They will be locked with a smart contract at the early stage. When the hash power of BHP reaches 5000P or the public chain runs for 18 months, 3 million BHPs will be released. 3 million BHPs will be released after 7000P or the public chain runs for 24 months. 4 million BHPs will be released after 10000P or 36 months, and the distribution proposal will be decided by the founding team. 10 million will be released conditionally with different incentive rules to 20 independent hyper nodes operation teams as medium-term and long-term incentives. The release mechanism is similar to genesis node. The BHP Foundation determines the unlock mechanism and distribution proposal, and makes it public to the community. 第 2 页

2. PoS Mining Profit PoS mining of BHP public chain is an income distribution mechanism based on the number of credible hash power (T) and time (days) held by the user. The PoS mining revenue is positively correlated with the trustworthiness and holding time of the hash power holding. The specific mechanism is as follows: (1) Mining rules: ①Source of income: The user's PoS mining revenue can only be distributed from the PoS mining revenue pool produced by the BHP Hash power chain block. ② Distribution time: PoS mining revenues is distributed by the day. ③Distribution Limit: If the PoS mining revenue pool is insufficient to allocate all user revenues for the day, it is allocated based on the proportion of the user's earnings to the total amount required for the day. ④Mining Ending: Mining will not be terminated until 55 million BHPs have been all generated and distributed. (2) After paying the miner's PoS mining revenue, the remaining BHPs will be used to motivate hash power promoters. The specific incentive strategy will be determined by the BHP Foundation. (3) Credible hash power: The users may use the legal currency or equivalent digital currency leasing hash power at the BHP genesis node and the hyper node mine, which is called holding credible hash power. (4) Age of hash power HTD= the number of credible hash power (T) x holding time (days) in units of (T·days). For example, if an user rents 10T credible hash power for a total of 100 days, then the age of hash power is 1000 (T·days). (5) Admission rules: When the user has a hash power age of more than 1000 (T·days), he is eligible to get the BHP revenue 第 3 页

and bitcoins. In addition to the PoW mining revenue (BTC), the new rental power can also obtain PoS mining revenue (BHP). The newest rental power of BHP will not be included in historical credible hash power. (6) Hash power age equity coefficient CTD: The greater user’s age, HTD, the greater equity, and the more the PoS mining BHP gains. The age-based equity coefficient CTD is a factor used to adjust the income. The formula is as follows: 2 H TD ≥ H TD1  0.2 1.8 + ( H TD − H TD 2 ) H TD 2 ≤ H TD < H TD1  H TD1 − H TD 2   0.3 CTD = 1.5 + ( H TD − H TD 3 ) H TD 3 ≤ H TD < H TD 2  H TD 2 − H TD 3  0.5 1 + ( H TD − H TD.TH ) H TD.TH ≤ H TD < H TD 3  H TD 3 − H TD.TH 0 H TD < H TD.TH In the early stage of hash power construction, the value of the parameters in the current formula: HTD.TH is equal to 1000 (T·days), HTD1, HTD2 and HTD3 are the 99th percentile, the 94th percentile, and the 80nd percentile, respectively. With the development of hash power construction, the four parameters of HTD.TH, HTD1, HTD2, and HTD3 will be adjusted by BHP Foundation according to the situation of hash power ecological construction, BHP total hash power, BTC total hash power, BTC price, BHP price, POS mining output and other factors. The adjustment plan will be announced on the official website of BHP main chain. The meaning of the p-th percentile is to calculate the corresponding cumulative percentile after sorting all the users' hash power ages from small to large. Then the value of the data corresponding to a certain percentile is called its percentile. It can be expressed as: the age of a group of n users is sorted by value, and the value at p% is called the p-th percentile. For example, the 99th percentile means that 99% of users in the series are less than this value, and 1% of users in 第 4 页

the series are larger than this value. The CTD curve is shown in Figure 1. CTD 2.0 1.8 1.5 1.0 HTD.TH HTD3 HTD2 HTD1 HTD Figure 1: The curve of CTD with age (7) Hash power age’s attenuation coefficient C∆TD: The user's holding age HTD reduction causes a certain loss to the BHP network hash power, and it will inevitably bring BTC income loss to every BHP holder in the community. C∆TD is a coefficient to punish the revenue change when the user's hash power is reduced. The age is reduced, the equity is reduced, and the revenue of the PoS mining BHPC is reduced. Let the age of the day be HTD.C, and historical maximum age (the age of the day before reduction) is HTD.H, then the Hash power age’s day change is𝐻𝐻∆𝑇𝑇𝑇𝑇 = 𝐻𝐻𝑇𝑇𝑇𝑇.𝐶𝐶 − 𝐻𝐻𝑇𝑇𝑇𝑇.𝐻𝐻 . Hash power age’s attenuation coefficient C∆TD formula:  1 H ∆TD ≥ 0  =  H TD.C  2 C∆TD  H  H ∆TD < 0  TD.H  When the user holds the age reduction, the age attenuation coefficient C∆TD is the square of the ratio of the current day to the historical maximum age. (8) Monthly revenue rate of PoS mining RM: related to the holding age HTD. The segment value of RM is determined by 第 5 页

BHP Foundation based on the situation of hash power ecological construction, the total hash power of bitcoin, mining difficulty, bitcoin price, the total hash power of BHP and the number of BHP outputs in the PoS mining revenue pool. It will be published monthly on the official website of BHP main chain. At the current stage, according to the dynamic change of the user's age, when the age exceeds 1000 T·days, the range of RM is 2.5%~5%. The specific segmentation of monthly income is as follows: 5% H TD ≥ H TD1 4% H TD 2 ≤ H TD < H TD1  RM =  3.5% H TD 3 ≤ H TD < H TD 2 2.5% H TD.TH ≤ H TD < H TD 3 In the formula, HTD.TH, HTD1, HTD2 and HTD3 have the same meaning as CTD expression. (9) Daily PoS mining revenue QBHP: ① In the early stage of hash power construction, when the daily revenue of all users does not exceed the total daily mining output, the daily PoS mining revenue of each user is as follows: N QBHP = QT × CTD × C∆TD × RM × d 30 N =QT × KTD × d 30 QT is the credible hash power held by users in BHP genesis node and the hyper node mine. KTD is the hash power age’s revenue coefficient, which is related to the age’s equity coefficient, the age’s attenuation coefficient and the Monthly revenue rate of PoS mining, KTD =CTD ×C∆TD ×RM . Nd is the difficulty of PoS mining, which is determined by the BHP Foundation according to factors such as total hash power of BHP, the total amount of BHP output and hash power holding cost, and it is published monthly on the official website of BHP 第 6 页

main chain. ② In the middle and later stages of hash power construction, when the PoS mining revenue pool is insufficient to allocate the revenue of all users on the day, that is, the sum of all user income per day exceeds the total daily mining output, the daily PoS mining revenue will be distributed proportionally according to the following formula: K (i )QT (i ) = QBHP (i ) QBHP.T × N TD ∑ KTD (i)QT (i) i =1 KTD (i) is the hash power age’s revenue coefficient of the i-th user. QT (i) is the credible hash power held by the i-th user in BHP genesis node and the hyper node mine. QBHP.T is the daily total output of PoS mining. N is the total number of all the users who have holden credible hash power and enjoyed the equity of the revenue distribution. (10) PoS mining revenue example: An user holds 10T credible hash power at the BHP genesis node and hyper node mine, and reaches 1000 (T·days) after 100 days. At this time, the user’s hash power can not only gets the PoW mining revenue (BTC), but also gains the PoS mining revenue (BHP). Assuming the monthly rate of return RM is 2.5%, According to the BHP total hash power and its output, the difficulty of PoS mining Nd is 500. So the BHP revenue from the PoS mining on that day is: 10 ×1×1× 0.025 × 500 =QBHP = 4.16 30 That is to say, the user can obtain 4.16 BHPs from PoS mining on the day. 3. BHP “Holding is mining” dividend BHP& Renren mine users enjoy the dividend income of “Holding is mining”. The BHP public chain will take 2%~20% of the bitcoin 第 7 页

output on the day of the BTC total holding hash power into the BHP public chain dividend account every day. The dividend rate is adjusted and announced monthly by Renren Mine operating team according to the business situation, which is currently 2%. Users should deposit their BHP in the DAPP of Renren Mine and enjoy the right to share the dividend. Through the BHP public chain smart contract, all BTCs in the BTC reward pool on that day are automatically allocated according to the proportion of BHP coins held by users, and transferred to the user account. Mining Rules: 1) Source of income: A certain proportion of BTC mined in Renren Mine is used as the daily BTC reward pool. 2) Distribution time: Earnings from coinage mining on the previous day are distributed daily. 3) Distribution rule:According to the proportion of BHP held by each user in the mine wallet, we distribute every day. The BHP of locks does not participate in the distribution of “Hold currency is mining”. 4. Macroeconomic Model of BHP The value of BHP is closely related to BTC output, dividend amount and market price of BTC. BHP adopts the "bilateral income" economic model, which is automatically priced by the market and avoids artificial manipulation. When the number of miners in Renren Mine increases, the rental hash power is more, the higher BTC is mined, the more BTC reward pools can be allocated. The number of BTCs mined by miners with BHP will increase on the day they hold BHP, which will stimulate users to buy BHP in 第 8 页

the secondary market and drive the price of BHP to increase. When the price of BTC rises, the mining income of miners with BHP coin will increase. Daily earnings of miners in Renren Mine = daily rental hash power BTC earnings + daily rental hash power double-digging BHP earnings + daily holding currency dividend earnings of BHP. Among them, the dividend income of the day = Daily distribution of BTC number / BHP participates in total dividend distribution * the amount of BHP held by users. Users can obtain BHP by renting hash power PoS mining, or they can buy BHP in the secondary market and transfer it to DAPP in Renren Mine to obtain the dividend income. 5. BHP Payment Application Users can realize various ecological services in the chain such as asset management, transfer transaction, settlement and payment in DAPP (such as Renren Mine) supported by BHP public chain. BHP hash power public chain only charges a small fee according to the number of bytes packed in the transaction to maintain the normal operation of the system. The charging strategy of handling fee is to charge per 512 bytes. When transferring is finish, the verification node will check the byte size of this transaction and calculate the handling fee of this transaction. Fee = transaction byte size / 512 + transaction byte size% 512) * 0.0001BHP 第 9 页