PRIMARY — Consensus mechanisms and the ideal of decentralization
The PRIMARY team is focused on the development of a robust, decentralized network for digital professionals. Today we would like to address the public debate on decentralization, specifically on how a blockchain network’s consensus mechanism influences the extent of decentralization.
The new generation of electronic cash — is there a fault in our consensus mechanism?
Bitcoin, the world’s first cryptocurrency was created in order to act as a new version of cryptographically secure electronic cash. Part of the appeal of such a cryptocurrency was to enable the creation of a free market based on decentralized control over the production of money. The utilization of cryptocurrencies for day to day payments has however been stymied by a slow rate of transactions offered by first and second generation blockchains such as Bitcoin and Ethereum. This is due to the nature of their consensus mechanisms.
A consensus mechanism is the means by which all the nodes of a distributed ledger to reach an agreement, or consensus, on the state of the network at a particular point in time. Such a mechanism needs to be fault tolerant, which simply means that it can be depended upon to function against external attacks and even rogue users.
How things were done — an overview of popular consensus mechanisms
A brief overview of the consensus mechanisms used by Bitcoin and Ethereum will help put things in context.
Bitcoin utilizes a Proof of Work (PoW) consensus mechanism which requires the computation of complex mathematical formulae by specialized equipment. This is done by miners who are rewarded for expending resources such as money for bitcoin mining equipment like ASIC processors and electricity.
Ethereum requires network members to stake a portion of their ether on the blockchain to gain voting rights. These ‘validators’ can then mine tokens in proportion to the value of tokens they have staked.
In both cases, transaction times increase as the number of miners and validators increases.
PRIMARY looks towards DPoS
EOS, the blockchain on which the PRIMARY dApp will be hosted, utilizes what is known as Delegated Proof of Stake (DPoS) as the consensus mechanism. This mechanism was created by Dan Larimer, the founder of EOS, Steemit, and Bitshares. DPoS functions in a manner similar to PoS but increases the system’s throughput by clustering network transactions with a small number (EOS has 21) of what is called public validators responsible for ensuring transaction validity. Due to a lack of mining equipment required, and the limited number of nodes, DPoS consensus mechanisms allow for large savings in terms of energy, cost and most importantly transaction time.
Disadvantages of Delegated Proof-of-Stake
Security and scalability are two attributes which can seem mutually exclusive when dealing with distributed ledger systems. The greater the number of nodes validating transactions, the longer it will take for them to reach a consensus. This increases the time per transaction and decreases the feasibility of the quick transactions required for a cryptocurrency to be referred to as electronic cash.
Complete decentralization would increase network security but reduce the possibility of having a large number of transactions per second. It is for this reason that both the Bitcoin and Ethereum communities are working on the implementation of upgrades designed to decrease transaction times.
Facilitating mass adoption
While a blockchain network which uses DPoS cannot claim to be as secure as the much slower PoW consensus mechanisms, it can pave the way for mass adoption of this new technology. There is a growing realization of this, especially as the crypto ecosystem matures and people understand that not all dApps and blockchain networks are dealing with sensitive data, such as financial information.
The beauty of DPoS systems lies in the fact that it can be deployed on top of more secure and energy-intensive consensus mechanisms such as PoW. This would entail the development of a secondary layer (which would consist of a blockchain utilizing DPoS) on top of a base blockchain running on PoW. This bifurcated system will allow the majority of transactions on a complex decentralized platform to occur on the secondary DPoS layer while all important information is stored on the underlying base chain.
Keeping the spirit alive
Let us now return to the initial issue of consensus mechanisms and decentralization. Yes, blockchains which implement PoW or PoS systems are technically more decentralized. However, for the spirit of cryptocurrencies to be realized, and blockchain technology adoption to increase, it is important for us to consider how best to advance its usage. For example, a dApp which functions as a computer game could be hosted on a DPoS blockchain.
It may not be fully secure, but by allowing users to engage with the dApp (a PoW blockchain cannot sustain a computer game with many users at this point in time) will provide the public with a better idea of collective ownership and decentralized governance which blockchain technology is leading to. It is this steady progress towards an ideal of a decentralized marketplace that is guiding the PRIMARY development team moving forward.
Stay in touch with PRIMARY
The pre-sale of the PRY token started on the 1st of August 2018. For further information regarding token distribution and the team behind the project visit PRIMARY. Or get the latest announcements by joining our email list.