PoS and Staking are not new things. As early as 2011, the concept of PoS was proposed. In the middle, it has evolved into a multi-stage PoS public chain, and the hot Staking Economy. In the past, the PoS project had insufficient incentives for miners, technical safety issues and centralization issues. The later PoS projects continued to evolve according to past problems. At present, there are two directions for maturity, one is DPoS and the other is PoS+BFT, PoS brings better performance than PoW, and in order to attract early participants to maintain network security, the current rate of increase is generally between 5% and 25% higher than the previous 1%-2%. This may also be the reason why a person began to tout the Staking economy. Looking back at history can make us look farther. Let us witness the new era of PoS.
A person named QuantumMechanic, Proof of Stake, first proposed at the Bitcointalk Forum on July 11, 2011, did not have a short name for PoS at the time, which was proposed for Proof of Work. The article predictively proposes a number of solutions that are still in use today, such as the substitution of the currency weight, the entrusted equity, the reward distribution, etc., as well as some words like Delegate, Vote, Voting Power, etc., in 2018 today. We can still see it.
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At that time, people were very excited about the introduction of PoS. This kind of excitement has continued to this day. Many of the later projects have begun to study the blockchain of PoS algorithm. Even many existing projects have begun to consider transforming PoS, Ether. The square is the most typical example. From the proposal to the landing, it took about a year to develop. On August 19, 2012, the first blockchain project based on the PoS consensus was born, Peercoin, Token code PPC. The emergence of dot-coin really represents the milestone that PoS has moved from paper to engineering.
The dotcoin is a BTC-like electronic currency. SunnyKing (the founder of the dotcoin) may have been designed for a short time. It may not be clear how to solve the problem under the PoS mechanism. It may also be the PoW consensus in people's The way of thinking occupies a dominant position. The consensus of dotcoin is actually based on the hybrid consensus of PoW+PoS, rather than the consensus of pure PoS (Pure PoS). The hybrid consensus retains the design of a large number of PoWs. The PoS algorithm is in it. The role played is actually not as big as I imagined. But after all, it is the first project to project the PoS consensus into the blockchain. In the white paper of the dotcoin, we can see many new concepts, Coinage, random number parameters (prev_blocks_data), PoS Checkpoint and more.
The hybrid PoW+PoS consensus is a transitional phase of PoW transition to PoS. During the period of 2009~2014, Bitcoin's PoW is still highly authoritative. Most people's impressions of PoW are not too fatal, and there are not many fatal problems, except for a little waste of resources and efficiency. Bitcoin-based second-generation PoWs, like Litecoin, are highly regarded only for reducing block time. It can be said that the design of the dot currency is still on the shoulder of Bitcoin PoW, and has inherited many good strategies, such as incentives, fork protection, consensus implementation, distribution strategy and so on. However, due to the short practice of the PoS consensus, PoS has a lot of exploration components in the realization of dot-coin, so this mixed consensus is actually a transitional approach.
2. Pure PoS
PoS is constantly developing. After the dot-coin is born, the pure PoS consensus has become the focus of research. A year or so after the release of the dotcoin, on September 28, 2013, a person named BCNext announced a crowdfunding campaign for the Nxt project at Bitcointalk (then called crowdfunding Fundraise, not called ICO).
Nxt is a 100% PoS project and there is no PoW consensus at the same time. The highlight of Nxt is that it does not copy the bitcoin code as well as other altcoins, and then changes the hashing mechanism, shortens the time between blocks, or changes the difficulty of starting, but based on its newly written algorithm. Blockchain. Emphasize 100% PoS mining without pre-excavation. The Stakes required in PoS are also determined entirely by donations to determine the total amount and distribution, and the distribution of PoWs is directly distributed by donation.
Crowdfunding lasted for 21 days, with 73 users participating, a total of 21 BTCs were donated, and 10 billion Nxt was divided. On November 24, 2013, Nxt released the main network, indicating the first 100% PoS consensus-based innovation. The world block was born on Nxt.
The development of Nxt was not smooth, and the history of the Nxt record stayed on May 12, 2014. The decline of Nxt is due to the development of too centralization. The quality and speed of the code have not kept up. Only three developers can't complete the expectations of many investors. Although the development order of the main network function has community voting, Nxt is still slow. Slowly, it has become a criticism of many investors. After the market value reached the peak of the market value of 80 million US dollars on June 5, 2014, it left a chicken feather. But in any case, compared with the 21 BTCs that were originally crowdfunded, it was a heaven and a ground. Compared with the project at the same time, it was really old to welcome the New Year. Looking at the dot and black coins of the same period, they are not so good.
Blackcoin, which was first announced on February 24, 2014, announced that it was built on pure PoS, but it is also a PoW+PoS hybrid consensus. Then why is the hybrid consensus in pure PoS? It is because the PoW running on the black coin only lasts for 10,000 blocks. According to one block per minute, the mining time is about one week (6.9 days), then the entire block. The verification will no longer accept PoW mining, and instead form a PoS mining. From this perspective, plus the chronological order, I also attribute the black coins to the pure PoS camp.
The total amount of PoW mining is 10,000,000, and the inflation is 1% per year after entering PoS (as with Nxt, there is no maximum limit). Pure PoS has shorter block spacing and a more reasonable coin-coupling method, which attracts many early people to come in for mining. There are even many special-purpose mining pools to start collecting money in the forum as a Validator. At that time, the new consensus of PoS really attracted the attention of many people, no need for a computer, no GPU, as long as the currency can be rewarded.
However, the good times of black coins did not last long. On April 14, 2014, in just less than two months, the market value of nearly 20 million US dollars, after the decline, after several twists and turns, still failed to escape The fate of the bottom. And because of the decline in market value, the 1% increase in rewards for PoS Staking people, it seems to be a drop in the bucket.
Although, in 2016, a new batch of developers restarted the development of black coins, and spent a lot of money to come to the regular army, corporatization, and comprehensive publicity, but the black coins and its PoS did not return to the mainstream world. Come in. I still remember the classic slogan of black coins, which is like a textbook: the first one based on pure PoS coins, fair start, no pre-excavation, no ICO, community-centered, returning, better than ever, more than before Strong.
The first fair-launch pure Proof of Stake coin. No premine. No ICO. Community focused.
Back again, better than ever, stronger than before.
On July 18, 2014, a coin similar to the black coin consensus, called Shadowcoin, is an application currency based on chat anonymity. Based on the PoW+PoS hybrid consensus, PoW only digs 31,000 blocks and then enters. PoS, but unlike the black coin, the shadow coin sees the lack of incentives. It increases the annual inflation rate, and mentions 1% of the black coin per year to 2% per year. But after entering 2015, the value of the application currency is far from being seen. With the arrival of the bear market, the shadow coin will soon disappear into people's field of vision.
I summarized the history of the entire POS and found that many PoS-based projects basically appeared in 2012~2014. At that time, the cryptocurrency market was in a rising cycle, with a lot of projects, a group of people, many of whom were projects. The exploration bought the order, but overall, during that period of time, everyone was very good on paper. In 2015~2016, the currency circle entered the big bear market. Many projects and developers entered the winter stage of hibernation, and few projects have appeared to donate, IPO or ICO. PoS research has disappeared in the market. a period of time.
Excluding the reasons for the big market cycle, we attributed the reasons for the failure of the PoS mechanism currency during that time. Dotcoin, Nxt, blackcoin, and shadow coins were all very early exploration projects of PoS, and the technology was not fully considered comprehensively (in the ninth In the chapter, we will introduce the technical defects of PoS. In addition, the incentive for Staking in PoS is too small to support the cost of the verifier, and the application of the decentralized operation mode on PoS is not as perfect as PoW. .
The annual ratio of 1% to 2% of the increase is not allowed to be maintained by miners, especially in the bear market. This kind of startup PoS issuance mode is still fresh enough for many people. In the initial price of the currency that may burst, the initial benefit of the issuance is only a very important incentive, but when investors face the currency price, they cannot bring it. After the expected benefits, the low incentives became a chicken rib. Miners can't see the benefits, and naturally can't participate in network verification. Then the network will not be blocked, or it will be chronic death, and the potential attack cost will be lower and lower.
In addition, most projects are initiated by several developers or even one developer. Bitcointalk initiates a topic that roughly describes what to do, 100% PoS, 1% reward… and then no more. After the first launch, the developers are hiding like Nakamoto. This result does not bring prosperity like Bitcoin, but death.
At this point, this is the second phase of the development of PoS.
3. Delegate PoS (DPoS)
Entrusted PoS, also known as Delegate Proof of Stake, DPoS, its prototype was born on December 8, 2013. Daniel Larimer first talked about the use of voting to select the block person in bitsharetalk, instead of the election random number that may appear in PoS. The problem of manipulation is described as follows:
I have a point that I can use recently, but I am not completely sure if it is feasible. Why not let the holder of the currency choose the certifier of the signature block? The CDD coin-day-destroyed votes to the signer, and when the signer signs, it will consume the currency of the voter. No one will be allowed to sign more than one block in 100 blocks. This idea may have potential problems, but I will add it to my point library.
I recently came up with another system that could work, though I am not fully sold on it.
What if the share holders elected people who would sign blocks? You vote for the signers with CDD. When they sign they spend the CDD they accumulated from people voting for them. No one would be allowed to sign more than 1 in 100 blocks.
This plan has many potential problems, but I thought I would add it to the idea pool.
This is the prototype of Delegate PoS. This system has been successfully applied to Bitshares. The slogan of DPoS in the BitShares community is: DPoS not only solves the wasteful resources problem of PoW, but also solves the dot currency. And PoS issues with future coins. At the time, DPoS was indeed a solution. Although the development of the bit stocks is not smooth, Dan is finally kicked out of the bit stock community, but it is undeniable that the DPoS consensus on the entrusted rights has laid a foundation for the further development of PoS in the future.
The Bitcoin DPoS was built on the Graphene platform. This graphene technology was later developed into a dedicated underlayer for DPoS. The blockchain project based on graphene can directly use the consensus mechanism of DPoS, eliminating the need for repetitive development. Distress, like Steemit, EOS, Lisk, etc. are all based on the graphene platform to build the DPoS public chain. Until now, in 2018, we can still see that in the BitShares DEX, many gateway assets are based on graphene-based DPoS, and the number of PoS-based projects has reached an order of magnitude.
Indeed, DPoS has many advantages. DPoS solves the problem of untimely use of rights and interests. It is a basic principle for professionals to do professional things. It can be understood as a representative system in state governance, or a system of deputies to the people's congress. The residents of townships and towns elect the township by election. Then, the mayor, the county magistrate, the governor, etc., the biggest advantage of this system is to solve the problem of inefficiency caused by too many verifiers. Of course, this system also has obvious shortcomings, that is, centralization.
The initial number of PIN verifiers in the bit stocks is about 100, and then gradually reduced to more than 30 (because it is unprofitable). The EOS node certifier is fixed at 21 people. In the blockchain world in which decentralization is esteemed, the tendency to centralize projects is easily criticized, and many developers do not agree with such entrusted rights. Another project that began in 2014, Tezos, combines decentralization and commissioning.
Tezos' PoS, the development team prefers to call it LPoS (Liquid Proof of Stake), but it is not too much to call it DPoS, because the entrusted interest is an extremely important part of Tezos' PoS. In order to ensure system security, PoS hopes to increase the Staking amount of system tokens, so that the cost of attackers launching 51% attacks will become very large.
Tezos solves the problem of insufficient initial incentives and low user Staking intentions. It rewards Staking users with 5.5% of the annual issuance. At the same time, users can entrust their rights to the verifier (called a baker in Tezos). Let the verifier help the client to exercise his or her rights. The certifier can charge the user a fee as a service fee, so that the certifier node can receive a reward for the commission in addition to the reward of Staking. This incentive is for the future currency, 1%~2% of the black currency. , a lot higher.
In addition, Tezos' entrustment and EOS's entrustment are different in many respects. In principle, each client can choose any candidate to vote, but due to the different voting incentives of Tezos and EOS, it leads to different results. On Tezos, the principal can select any certifier, vote and earn revenue, and the certifier selected by EOS is only elected as the result of the election and is not motivated.
The elected person on the EOS has the responsibility and obligation to represent the will of the voter. In the case where most of the node candidates are honest, the principal cannot judge the difference well, so the voting motivation becomes different. In general, both DPoS allocate a certain interest according to the weight ratio of the holding currency. Whether the equity is entrusted to the initial motive of the holder, this is the essence of DPoS.
Tezos was launched on June 30, 2018. At present, there are more than 400 main network nodes and more than 100 certifiers. EOS started the main network on June 15th, 2018. The number of primary nodes in the main network is 21 and the number of candidate nodes is 100.
The combination of Byzantine Fault Tolerance (BFT) and PoS was first proposed in 2014 by the Tendermint team, Jae Kwon. Tendermint's predecessor was based on the proven BFT algorithm developed at MIT in 1988, and Tendermint was optimized and improved. But Tendermint has not been run into the project since it came out. Jae Kwon later created the Cosmos project, which is arguably the first project based on Tendermin.
According to the timeline of the main online line, the application of BFT+PoS or BFT+PoS is started in 2018. First, EOS comes with BFT+DPoS. Then, Tezos' BFT+PoS algorithm is one month after EOS. Also on the line. Based on Tendermint's first project, Cosmos, will be launched on Q1 in 2019. In addition, I now know Ethereum. Algorand will adopt the BFT+PoS consensus algorithm. The specific online time is unknown. Although Tendermint first came out, Cosmos did not take the lead, but it must be said that the latecomers basically refer to the Tendermint design, so Tendermint has played a very good role in the application of BFT in the project. From 2018 to 2019, it will be the consensus of a large number of projects on the BFT line.
BFT fault tolerance can bring considerable risk resistance to distributed networks, and it can bring faster block confirmation speed, solve blockchain fork problem, and bring a certain degree of finalization of transactions. Improved performance. If pure PoS is only based on pure PoW and only solves energy consumption, then BFT+PoS is better than pure PoS. In addition to solving energy consumption, it also solves the problem of PoW transaction confirmation, trading fork, and low performance. The leap brought can not be ignored, especially in the security section, let's look at Tendermint:
A very important part of Tendermint is its consensus engine part (Tendermint Core), which combines BFT and PoS consensus. The holder has the opportunity to verify the block through the stake. After the signature is completed, the verification of the new block is passed. Round submission, 2 rounds of 2/3 voting process to reach a final consensus. Since the voting started after the block broadcast, when it is verified, the new block gets Instant Finality, which is different from the bitcoin transaction requiring 6 blocks, and Tendermint is greatly shortened. The verification time makes the transaction take effect in time, avoiding the problem of the transaction being rolled back and double-flowering in advance.
In addition to the transaction confirmation, At the same time, Byzantine fault tolerance can tolerate less than 1/3 of the verification weights in the system, which can guarantee the system operation well. It can be simply understood as long as most people in the system are honest, no matter the other verification. How to do it, the system can still run, there will be no stop, downtime.
The first project based on the Tendermint Core engine is called Cosmos, a public chain project that provides cross-chain functionality. The Cosmos hub is the most important part of the project, and it is also the general coordinator of the cross-chain. If the cross-chain ecology is prosperous and links to the Cosmos Center, how important the security of the center can be. When it comes to Cosmos, you have to mention another cross-chain project, Polkadot. Poca is also a BFT-based PoS project. It is led by the Ethereum Yellow Book writer Gavin Wood, and it has a lot of technical talents. The team lineup is powerful. . However, when the author wrote a series of articles, Boca's GRANDPA consensus is still being improved, and it is necessary to wait until the wave card is approaching the line to be analyzed.
At present, Tezos, which is already running, is in good condition. Only once because of Slash's judgment, the entire network is suspended. The reason for the consensus mechanism is partly related, but the problem is solved by manually injecting Nonce. In addition, Tezos has been running for half a year. In addition to the low-cost garbage trading attacks, there has not been a big problem in the consensus section.
In 2014, BFT began to introduce a distributed network of blockchains. Afterwards, PoS began to become popular. The hybrid consensus of BFT+PoS has been paid attention to by many projects, not only because the security of BFT has been studied for nearly 30 years. Time, and because this algorithm improves the system's ability to resist risks and performance, I expect this consensus to be popular for a long time in the future.
5. The new era of PoS
The research pace of PoS is still moving forward. Security, performance and decentralization have always been the direction that PoS pursues. Some new projects started after 2018, I saw that they have more or less the shadow of their predecessors, based on this, whether to optimize the performance, or optimize the security, or the ultimate optimization is not Possible iron triangle. Algorand and Thunderalla are new projects that have entered my field of vision since 2018. I think these two projects can represent the new PoS era to some extent. If the development of PoS is divided into four rounds of a reincarnation, it happens that both projects will begin to take shape around 2022.
Algorand and Thunderalla are standing on the shoulders of the giants. Algorand, led by Turing Award winner and MIT professor Sivio Micali, focuses on the new PoS+BFT consensus algorithm (BA, Byzantine Agreement), designed to make verifiers' elections more random, unpredictable, and better guaranteed. System security is the research direction; Thunderella, initiated by two Cornell University computer professors Rafael Pass and Elaine Shi, aims to solve the performance expansion problem in PoS, the current theoretical performance can reach 1000~2000Tps.
It is believed that the 2019 conference will be a year of PoS harvest. Many studies conducted between 2014 and 2018 will be validated in 2019, indicating the opening of the PoS2.0 era. I feel that I am very fortunate to be able to experience the two eras of PoS (2011~2014, 2015~2019) from PoW+PoW, to pure PoS, to DPoS, and finally to the new hybrid consensus of BFT+PoS. I believe that this is far from the end, but the starting point of a new era.
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