Why We’re Using Tendermint Consensus Algorithm for the hiblocks Platform
Choosing the right algorithm for the HiBlocks project was not an easy decision. Blockchain technology is still in its infant stage where all kinds of new strategies and algorithms are being created by developers from all around the world. However, there is not a single blockchain project for everyday use.
Since Satoshi Nakamoto’s POW consensus algorithm in 2009, various developers and Blockchain enthusiasts have argued over which consensus algorithm is the most ideal? Is it POW? POS? DPOS? Tendermint?
So why did HiBlocks decide to use the Tendermint consensus algorithm?
The main focus for HiBlocks was finding a consensus algorithm that would provide fair rewards for their social media activities. At first, the team looked into a DApp with the DPOS consensus algorithm. However, developing a DApp on the DPOS consensus algorithm was not suitable for the HiBlocks project. The project requires more flexibility, simplicity, and most importantly technical control over the Blockchain itself.
HiBlocks is a Social Media Platform that is built on the Blockchain where users can get rewarded from a variety of social media activities. Currently, existing reward-based social media platforms have the same issues, whales on the platform have absolute power to influence the content and manipulate the reward system. Therefore, people do not accept that a platforms reward system is fair for all users. Whales, however, are inevitable in platforms that reward users. In a way, they have an important role in the platform. As creators and curators bring value onto the platform through their social media activities, whales also bring value in the way of assets. Together they increase the value of the platform’s ecosystem.
The HiBlocks team had to make a decision on whether to empower the whales or users. Both sides are equally important. Accordingly, we need equilibrium between the whales and the users where both can co-exist. In the end, the team decided to alternate between DApp development to building our own main-net using the Tendermint ecosystem. We came to the conclusion that Tendermint is the most suitable consensus algorithm for our project. When we build our own main-net with Tendermint, we can separate the Whales and the users on the HiBlocks platform but they can still coexist on the network.
POS vs DPOS vs Tendermint
In contrast with POS, DPOS elects block producers (validators). Those block producers get rewarded for producing blocks. Those that are not elected are put on standby. Basically, votes delegate their staked assets to the block producer candidates. The top vote-getters become the block producers. Voting is continuous, therefore if a block producer fails to do their job, they can be voted down and replaced.
In POS, if someone wants to be a validator, they can take their own assets to become a validator. There are no seat limits to become a block producer and there is no voting process. POS requires a larger consensus of validators to confirm the blocks. Consequently, it takes much longer for block confirmations compared to DPOS. The transaction time would be too slow for HiBlocks. On the other hand, DPOS offers little motivation for voters to vote because there is not much benefit for them to vote for a validator. Most vote in hopes of choosing the right block producer that will improve the ecosystem. There are many block producers that come up with promises of improving the ecosystem in order to get their votes. However, how are the voters benefiting from voting?
These are the main reasons why the team has decided to go with the Tendermint consensus algorithm. The fundamentals of Tendermint is the same as DPOS. The difference between DPOS and Tendermint is the method of rewarding block producers. For example, Tendermint’s validators can adjust their fee from the portion of their rewards. The rest will go to the delegators(voters). If a block reward on HiBlocks is 10 HiCoins, the validator can set his block reward to a 10%. Therefore the validator will get 1 HiCoin and 9 HiCoins will go to the voters. Therefore, the voters will be motivated to delegate their stakes(vote). The demand for the coin will have a higher chance to increase. In addition, while DOPS has block producers on reserve, Tendermint does not. All block producers on Tendermint will produce blocks.
We believe, no matter how many coins you have, social media platforms must give more value to the users who are engaging with the content and other users.
Whales have been able to abuse many social media platforms. However, thanks to the Tendermint system, both the whales and the users will benefit. Whales will benefit from Tendermint’s validator system while the social media users will get rewarded without intervention from the whales.
Once HiBlocks has built our own chain using the Cosmos SDK tool of Tendermint, it will be connected to the Cosmos Hub as well. Furthermore, it can connect with all other chains that are in the Cosmos Hub. We are confident that HiBlocks will be a part of the Tendermint Ecosystem.