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A Summary of

Seeking consensus on consensus

Ian Grigg
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Blockchains always have a race condition problem

  • Also known as the coordination, consensus, double spend, atomicity problem

How do we solve it?

Centralized double spend protection (original method) - Have one server handle requests FIFO - Drawback: kind of slow to process Blinded cash (variation of above) - Use RSA to give anonymity in transactions, while using mathematical tools for the central mint to uncover double spending - Drawback: centralized, so other authorities (eg. Fed) can track it Voting (common solution) - Accept the version that majority of servers agree on - Drawback: assumes centralized administration and all actors are known

Proof of Work (PoW)

  • A voting system where everyone works to prove a transaction chain and actor entry/exit is common
  • PoW is a lottery-based hash puzzle - solving puzzle + game theory/probability = honest miners getting rewards
  • But this "mining" burns up 4% of Bitcoin's entire value

Proof of Stake (PoS)

  • Instead of everyone voting, vote by share - those with most value should care most about maintaining system
  • Drawback: concentrates power in a few miners
  • "Nothing-at-stake" problem: what's incentive to stop betting on tons of different coins and forks At this point Bitcoin mining is concentrated in a few miners - it's not the decentralized vision we hoped for

Delegated Proof of Stake (DPoS)

  • Vote by a group of producers (miners); producers take round-robin turns doing mining and getting rewards
  • Community votes by share on who's producing - producers can do whatever to get votes including revenue sharing Criticisms
  • "Nothing-at-stake" - producers can get voted out for not sharing
  • Producer censorship - once caught they're voted out
  • Producer collusion - already exists, voting mechanism keeps it in check
  • Introduces Governance - governance exists in the form of trusting major miners, and it's ad-hoc and unwritten Advantages
  • No hash mining, so save on mining tax and saves the environment
  • Formalized governance = voting on code changes
  • Has strong community voice
  • Encourages building for massive transaction throughput
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