The consensus mechanism is the backbone of blockchain technology. Proof of Participation (PoP) is one of the new consensus mechanisms that is still under development, but it has the potential to be more energy-efficient and secure than other consensus mechanisms.
Before we learn about PoP, let’s define what a consensus mechanism is and discuss some of the most popular consensus mechanisms today and their limitations.
What is a consensus mechanism?
A consensus mechanism is a set of rules that allow participants in a distributed network to reach an agreement on the state of a shared data source.
In the context of blockchains, consensus mechanisms are used to ensure that all nodes in the network agree on the order of transactions and the state of the blockchain. This is done by ensuring that all nodes have the same copy of the blockchain ledger and that all transactions are verified and approved before being added to the ledger.
Or according to Ethereum.org, the term consensus mechanism refers to the entire stack of protocols, incentives, and ideas that allow a network of nodes to agree on the state of a blockchain.
The Big 3 consensus mechanism and their drawbacks
Proof of work (PoW): PoW is the oldest and most well-known consensus mechanism. It is used by Bitcoin and other cryptocurrencies. In PoW, miners in the network compete to solve complex mathematical problems. The first miner to solve the problem is rewarded with a block of cryptocurrency. PoW is a secure consensus mechanism, but it is also energy-intensive.
In PoW, only the first miner to solve a problem is rewarded. This led to an arms race, where miners bought more powerful equipment, which increased energy consumption and the scarcity of mining equipment.
Proof of stake (PoS): PoS can be considered second in popularity. In PoS, nodes in the network stake their cryptocurrency to participate in the consensus process. The more cryptocurrency that a node stakes, the more likely it is to be chosen to validate transactions.
PoS is more energy-efficient than PoW, but it is also less secure. This is because validators are not required to solve complex mathematical problems. As a result, PoS networks are more vulnerable to attacks.
To become a node on a blockchain network, you need to stake a minimum amount of cryptocurrency. This can be a barrier to entry for small players, as they may not have enough cryptocurrency to stake. Additionally, nodes with higher stakes are more likely to be selected to validate transactions, which gives them an advantage over smaller nodes.
Delegated proof of stake (DPoS): DPoS is a variation of PoS that is designed to improve scalability and security. In DPoS, a small number of nodes, called delegates, are elected by the network to validate transactions. Delegates are incentivized to act honestly by being penalized if they are caught behaving maliciously. DPoS is a more scalable and secure consensus mechanism than PoW or PoS, but it is also less decentralized.
One disadvantage is that it can lead to centralization. If a small number of delegates control a majority of the voting power, they could potentially control the network. This could make it more difficult for new users to participate in the network, and it could also make the network more vulnerable to attacks.
Another disadvantage of DPoS is that it can be less secure than other consensus mechanisms. If a delegate is dishonest, they could potentially manipulate the network or steal tokens. This risk is mitigated by the fact that delegates are elected by a majority vote, but it is still a risk to consider.
What is Proof of Participation
Proof of Participation is a consensus algorithm that selects nodes to add blocks to the blockchain based on their participation in the network. Nodes that participate well, such as by validating transactions and staying online, are given a higher score.
Nodes that do not participate well, such as by approving invalid transactions or going offline often, are given a lower score. Nodes with a higher score are more likely to be selected to add blocks to the blockchain.
The first blockchain that uses the PoP algorithm was created by Roberto Capodieci and Barton Johnston. Together with Stefano Griggio, they are also the founders and owners of the company Blockchain Zoo. (According to coinmerce.io)
How does Proof of Participation work?
The participation score of a node is calculated based on tickets. A node receives a ticket from each other node when it validates transactions and adds a new block to the blockchain. The value of each ticket is based on the node’s work, such as how often it is online, whether it has approved or rejected transactions incorrectly, and its speed.
The better a node performs its job, the higher the value of the tickets it receives. Tickets are added to each new block, making it impossible for nodes to change the value of tickets after they are issued.
Nodes cannot impersonate each other because a private key is required to send a valid ticket. The private key is only held by the node in question.
Finally, the algorithm calculates the total value of all tickets and uses this value to calculate a score for each node. The score can go up or down based on the total value of the tickets. Nodes with the highest scores are chosen to validate new transactions.
Proof of Participation selling points
One of the biggest advantages of PoP is that it is more accessible than other consensus mechanisms, such as PoW and PoS.
PoW requires miners to compete for the right to add blocks to the blockchain by solving complex mathematical problems. This requires expensive mining hardware and a lot of energy.
PoS requires validators to stake a certain amount of cryptocurrency in order to participate in the consensus process. This can be prohibitively expensive for some people.
PoP, on the other hand, does not require any special hardware or financial investment. Anyone can participate by simply running a node and validating transactions. This makes PoP more decentralized and accessible than other consensus mechanisms.
Another advantage of PoP is that it is more secure than other consensus mechanisms. In PoW, if a miner is able to control more than 50% of the network’s hash rate, they can effectively control the blockchain. This is known as a 51% attack. In PoS, if a validator controls more than 50% of the network’s stake, they can also effectively control the blockchain.
PoP is not vulnerable to 51% attacks because it does not rely on mining or staking. Instead, it relies on the participation of nodes in the network. If a node tries to behave maliciously, it will be given a low score and will be less likely to be selected to add blocks to the blockchain. If a node’s score falls below a certain threshold, it will be removed from the network entirely.
Overall, PoP is a more accessible, secure, and decentralized consensus mechanism than other consensus mechanisms. It has the potential to make blockchain technology more widely adopted and used.
Summarize
Despite their limitations, the biggest consensus mechanisms in use today, such as PoW, PoS, and DPoS, are still showing that they are enough to satisfy the crypto market.
PoP is a relatively new and not very popular consensus mechanism, but it has a lot of strengths that could help it overcome the limitations of current large mechanisms. So we can hope for a bright future for the PoP mechanism.
Regardless of the mechanism, they will have their own strengths and weaknesses. Therefore, understanding the mechanism of the blockchain that you are about to invest in is also one of the important steps to reduce the risk that you may encounter.
The Crypto market is difficult to predict, so it is important to do your research and understand the risks before investing. You can refer to EatnSmile Blog articles about the crypto market such as:
