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Use of the Proof-of-Stake Algorithm for Distributed Consensus in Blockchain Protocol for Cryptocurrency

01 Jan 2018-
TL;DR: How a Proof-of-Stake (PoS) protocol is a superior algorithm to PoW by assigning mining ability equal to one’s stake within a coin, rather than her energy consumption, among other factors is focused on.
Abstract: Recent increased attention to Bitcoin and other cryptocurrencies has opened investors and the general public to the realm of digital currency. Greater exposure around the world has led to a frenzy of entry into the market and a test into the long-term feasibility of Bitcoin being able to remain a functioning peer-to-peer (P2P), decentralized currency. Its main structure is supported by the Proof-of-Work (PoW) protocol in which users can elect to participate in determining transaction approval and ensuring an honest blockchain. This system relies on elected users, or miners, to expend great computational power and energy in order to solve puzzles to prove the accuracy of the network’s transactions and create new blocks, to then be rewarded with newly created Bitcoins for their effort. Each cryptocurrency uses their own method to ensure blockchain accuracy, and this paper will focus on how a Proof-of-Stake (PoS) protocol is a superior algorithm to PoW by assigning mining ability equal to one’s stake within a coin, rather than her energy consumption, among other factors. We will discuss Bitcoin and PoW as a baseline for our eventual analysis of PoS in terms of advantages and performance metrics. The main factors that can be compared between the two protocols is how each system can prevent itself against a variety of attacks from adversarial users within the network, as well as long-term sustainability. Vulnerabilities in any network protocol can result in adversaries being able to alter the blockchain for their own benefit, at the expense of the majority. Finally, we will use the Cardano (ADA) cryptocurrency by IOHK as a practical case study for understanding how their Ouroborous Praos PoS protocol works. Our goal is to show how longterm adoption of PoS framework is more realistic from an energy perspective than PoW, however inherent risks still exist within the algorithm.
Citations
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24 Dec 2018
TL;DR: In this article, the authors proposed a secure payment method which is decentralised as well as hierarchical certified to original ancient, which is based on the random oracle model and proved the method to be secure payment under the blockchain security.
Abstract: Blockchain is generally used in the economic ground designed for its type of anonymity, transfer as well as trust. Electronic currency expense is the main reason hotspot. In Bitcoin, in order of secret key generation to the rights of bit coin, which consists two problems: the first problem is the private key has to exist reserved correctly, and the second one is the secret key be particular, it cannot be the engaged reverse. Therefore, bit coin scheme be able just to implement the convey purpose. During this work, the first recommend an original sha256 algorithm as well as utilize to design an online file, be capable of help the user obtain the signature lacking obtaining the user’s secret key. Secondly, using our planned online wallet, we expand the purpose of the secret key. Thus, the crypto currency organization preserve apply for the permission role. The secure payment method which described as more features that is decentralised as well as hierarchical certified to original ancient. In this work next to propose a material instantiation as well as establish its accuracy. At last, they analyze the security as well as the usability of our system. The random oracle model it proves our method to be secure payment under the blockchain security. For usability, observe its presentation as well as evaluate through bit coin’s presentation.
References
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Book ChapterDOI
01 Jan 1983
TL;DR: Automation of the way the authors pay for goods and services is already underway, as can be seen by the variety and growth of electronic banking services available to consumers.
Abstract: Automation of the way we pay for goods and services is already underway, as can be seen by the variety and growth of electronic banking services available to consumers. The ultimate structure of the new electronic payments system may have a substantial impact on personal privacy as well as on the nature and extent of criminal use of payments. Ideally a new payments system should address both of these seemingly conflicting sets of concerns.

3,308 citations


"Use of the Proof-of-Stake Algorithm..." refers background in this paper

  • ...which must be solved by the recipient in order to understand the contents of the envelope (Chaum, 1983)....

    [...]

  • ...The initial server will take the message and add layers of masks which must be solved by the recipient in order to understand the contents of the envelope (Chaum, 1983)....

    [...]

Book ChapterDOI
20 Aug 2017
TL;DR: “Ouroboros” is presented, the first blockchain protocol based on proof of stake with rigorous security guarantees and it is proved that, given this mechanism, honest behavior is an approximate Nash equilibrium, thus neutralizing attacks such as selfish mining.
Abstract: We present “Ouroboros”, the first blockchain protocol based on proof of stake with rigorous security guarantees. We establish security properties for the protocol comparable to those achieved by the bitcoin blockchain protocol. As the protocol provides a “proof of stake” blockchain discipline, it offers qualitative efficiency advantages over blockchains based on proof of physical resources (e.g., proof of work). We also present a novel reward mechanism for incentivizing Proof of Stake protocols and we prove that, given this mechanism, honest behavior is an approximate Nash equilibrium, thus neutralizing attacks such as selfish mining.

1,314 citations

Posted Content
TL;DR: In this paper, the authors present the design principles and properties of Bitcoin for a non-technical audience, reviews its past, present and future uses, and points out risks and regulatory issues as Bitcoin interacts with the conventional financial system and real economy.
Abstract: Bitcoin is an online communication protocol that facilitates virtual currency including electronic payments. Since its inception in 2009 by an anonymous group of developers, Bitcoin has served tens of millions of transactions with total dollar value in the billions. Users have been drawn to Bitcoin for its decentralization, intentionally relying on no single server or set of servers to store transactions and also avoiding any single party that can ban certain participants or certain types of transactions. Bitcoin is of interest to economists in part for its potential to disrupt existing payment systems and perhaps monetary systems, and also for the wealth of data it provides about agents’ behavior and about the Bitcoin system itself. This article presents the platform’s design principles and properties for a non-technical audience, reviews its past, present and future uses, and points out risks and regulatory issues as Bitcoin interacts with the conventional financial system and the real economy.

927 citations

Journal ArticleDOI
TL;DR: The Bitcoin protocol as mentioned in this paper is an online communication protocol that facilitates the use of virtual currency, including electronic payments, and allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history.
Abstract: Bitcoin is an online communication protocol that facilitates the use of a virtual currency, including electronic payments. Bitcoin's rules were designed by engineers with no apparent influence from lawyers or regulators. Bitcoin is built on a transaction log that is distributed across a network of participating computers. It includes mechanisms to reward honest participation, to bootstrap acceptance by early adopters, and to guard against concentrations of power. Bitcoin's design allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history. Anyone can create a Bitcoin account, without charge and without any centralized vetting procedure—or even a requirement to provide a real name. Collectively, these rules yield a system that is understood to be more flexible, more private, and less amenable to regulatory oversight than other forms of payment—though as we discuss, all these benefits face important limits. Bitcoin is of interest to economis...

882 citations