Another great guest post by Aubrey Hansen
Researchers at the Singapore University of Technology and Design (SUTD) have recently proposed a new system to improve security and fairness for proof-of-stake (PoS) blockchain protocols. Rather than a new version of a PoS protocol, the SUTD solution can be implemented on top of already existing blockchains without needing to disrupt the network.
The new system involves the addition of ‘weighting’ to votes, which helps to quantify the value of each contribution. Using statistics derived from a validator’s prior contributions and other behaviours, they designed an algorithm that sorts contributions by worth, thereby ensuring the fairest resulting consensus.
The full paper also includes research into any potential issues and limitations the algorithm may pose to PoS networks, including any threats to trust and decentralisation.
Ahistory of Proof-of-Work developments
Following concerns related to the high energy consumption of Bitcoin’s proof-of-work (PoW) protocol, the PoW protocol was introduced in 2012 by Sunny King and Scott Nadal in their white paper for Peercoin (PPCoin). The new protocol proposed the use of ‘staking’ to determine block producer selection, whereby the more coins a user had the more chance of getting selected. The method removes the need for ever-increasing computer power that PoW miners require in order to have a competitive edge.
Unfortunately, the PoS protocol was far from perfect and presented several disadvantages over PoW that engineers continue to this day to try rectify. These include a lack of initial coin distribution, a threat to decentralisation, and an increased chance of ‘double-spending’ when forks occur due to identical node verification.
Since then, several solutions and iterations of proof-of-stake have been developed, some of which include:
- Delegated Proof-of-Stake (DPoS), which uses a form of social reputation and real-time voting to achieve consensus and was developed by Dan Larimer in the creation of the EOS blockchain.
- Leased Proof-of-Stake (LPoS), found in the Waves blockchain, incentivises users to ‘loan’ out their coins in order to achieve rewards.
- Masternode Proof-of-Stake (MPoS), which utilises trustworthy, high-staking nodes to ensure fairness.
- AI-enhanced Delegated Proof-of-Stake (AI-DPoS), a machine-learning method used by the Velas blockchain that continuously evaluates activity by users to ensure ethical behaviour.
- Byzantine Fault Tolerance based Proof-of-Stake (BFT PoS), a method designed to combat the problem of bad nodes which is currently being considering by the Ethereum blockchain developers.
Algorand goes Open-source
In other news related to PoS networks, the permissionless blockchain development firm Algorand recently made their Go-Algorand node repository open-source. The change means that the entire Algorand blockchain code is now freely available to any developers wishing to browse and add their own additions to the code.
The development is part of an ongoing effort by the Algorand team to promote greater decentralisation within the blockchain sector and follows similar changes made to several other projects.