Disclaimer: I am not a financial advisor. Please do your own due diligence when it comes to crypto-investing. Never put in money that you cannot afford to lose. Cryptocurrency markets are extremely volatile. Invest at your own risk.
Recently, Bitcoin has gained a great deal of media exposure due to its explosive 'to the moon' growth. Even my mom was asking if I had stashed some bitcoins. However, one label stood out among Bitcoin name-calling : Non Environmental Friendly. Due to the Proof of Work consensus, energy is required in running the ledger as seen with mining farms. In order to address such issue, another mechanism is introduced. Proof of Stake depends highly on the economic power (number of coins staked) of a validator. Nuls has provide another alternative concept which is similar to Proof of Stake while coupling it with the idea of a Masternode.
In Nuls consensus mechanism, there would be two roles actively working. Firstly, the agent owner will have to stake 20,000 Nuls in establishing a 200,000 Nuls pool (agent node). The remainder of the Nuls will be formed by the 2nd role in the consensus mechanism — premium staker. Each premium staker needs to stake at least 2000 Nuls to join into the Agent Node. Based on calculation, an agent node requires 1 agent owner (20,000 Nuls ) and at least 9 premium staker (180,000 Nuls). The maximum capacity of an Agent Node is 500,000 Nuls. Once 200,000 Nuls has been staked, the node will go live and is able to participate in the consensus meeting.
By having such a high requirement for the number of Nuls staked, this ensures commitment by individuals to stake their coins and preventing them from being wishy-washy about staking. What would interest people more would be the rewards for staking.
As Nuls consensus mechanism has a village-style leadership, the agent node who is the owner ( village leader) would receive more rewards from transaction fees and commissions based on the agreement of the pool. Standard rewards will be given to the Agent owner (village leader) and premium stakers (villagers). Although it seems that the Agent Node will receive a lot of rewards, one must remember that the Agent Node has to provide a server that runs 24/7. Premium stakers can simply forget about their staking as it will be delegated to the Agent Node to do all the work.
What this means : I can forget about all the headaches in setting up a VPN or worried about my mom switching off my computer because there isn't anyone in the study room
Putting the "Cred" in Proof of Credit: Credit refers to the stability, integrity and assurance of the node. Similar to Football (or what the Americans call ''soccer'), punishment will be meted out in terms of 'Red' and 'Yellow' card depending on the severity of the fault.
"Yellow" cards will be meted out if the node misses in block creation due to events such as network outages, leading to the reduction of a credit ratio. This simply means less moolah. Whereas for "Red" cards, it will be issued to nodes causing forks or double spending. The staked coins will be frozen for a month on top of being blacklisted from joining the blockchain consensus.
However, a stricter punishment can be enforced by having penalties in place. This penalty comes in the form of fines where the fault node will have its staked coins removed ( a certain percentage) and distributed as rewards to other healthy nodes. This capital punishment may seem harsh but would be integral to the safety of the blockchain. If no faults are created, there would be no punishment at all.
Punishments are an important part of managing integrity in the blockchain. Establishing punishment ensures that all nodes comply within the regulations meted out to them. Strict compliance by the nodes will provide a healthy blockchain ecosystem. As Nuls mentioned on their website, they want to simplify 'trust' in the system.
What Nuls has planned out in its consensus mechanism is something new and interesting. The Testnet on March 2018 would be an interesting period to experience the concept that Nuls had drawn up.
As Nuls is a community driven blockchain project,the numbers mentioned are tentative. Once the community has voted and come to a decision, it could be more or less than what is stated here. But, it would be the best figure that the community has agreed upon.
For more information, you can read the white paper here :
https://nuls.io/pdf/NulsWhitepaper1.1.pdf
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