What is a consensus mechanism? Exploring a worthwhile alternative to Proof of work.

What is a Consensus Mechanism? And what is Proof of Diversity?

Nyzo is a completely built from-scratch blockchain, highly scalable (only 7 seconds blocktime), democratic, decentralised and very efficient.
This blockchain is fully open-source and aiming to be the most efficient, most democratic and most convenient one in the world.
On top of that it requires MUCH less energy and is therefore much easier on nature and our environment. You can start running a node today on just a very small CPU or Virtual Private Server and don’t need a 1200 watt eating machine (as you would need to mine bitcoin).

What is a Consensus Mechanism and what does it entail?

Proof of diversity is a novel consensus mechanism that uses time as its main ingredient. It is neither proof of work nor proof of stake and requires diversity of participation to function and be immutable.
So called verification cycles build the base of this system which isn’t affected by the same threats imposed upon the proof of work and proof of stake consensus mechanisms.

These cycles are created by verifiers that produce blocks in a cyclical order. The code makes sure verifiers stay in the cycle for the appropriate amount of time and thus leads to appropriate diversification (details in the whitepaper or release notes)

Nodes need a specific amount of time to join the cycle which stands in strong contrast with classical blockchains which utilize the proof of work consensus mechanism (which are based on solving calculations).
Because of the nature of instant gratification, typical proof of work blockchains and especially small altcoin chains are at a constant risk.

Nyzo’s consensus mechanism, on the other hand, is much more resilient in that regard: The attacker needs to either a) gain control over 50% of private keys of active verifiers or b) himself/herself join repetitively until he/she gained 50% or more of the network.

Once the code allows a new verifier to enter the cycle the top voted verifier can join. Verifiers vote randomly (based on the last 50 block-incremented block hash), automatically and individually — as in a democracy. The consensus mechanisms’ time constraint comes forth from this entry mechanism.

Let’s take a look of the hypothetical scenario of someone wanting to 51% attack the network by adding new nodes to it.

10k nodes in queue + 10k in cycle. 7 are allowed to join per day.

Attacker needs probabilistic advantage to join quicker.
Assumption: Attacker starts 20k nodes and now has a 66% chance to get the next place in cycle.

Attacker needs to wait 30 days for all of his nodes to become eligible to join the cycle!

30 days have passed and meanwhile everyone has noticed that someone spun up 20k nodes and the community can react (given the attacker didn’t spin his nodes up gradually)

He/she did make a meaningful investment at that point (20k x 4usd [30d]) = $80k (4 usd is the estimated cost for servers and an IPv4 address) — by now lots of people took notice and are able to respond to this action.

Assumption: Attacker got lucky and nobody took action. 12,1k (10k + 7*30 days) now in cycle. We drop to 6 new nodes joining per day.

And the attacker lucks out again: Nobody notices his nodes joining.

This means:
+3.6/7 nodes joining per day.
After a week +25/42 nodes.
After a month +100/160 nodes.
After a year +1200/1920 nodes.

Now the attacker did waste a year of his time, north of $1 million, more than 30k nodes are in the cycle and he still has to reach the 40% point. That is definitely a big fail!

On top of that the community is able to react by blacklisting nodes and other preventive measures. The Proof of Diversity consensus mechanism is fully resistant against those attacks! Why?

a) incentive structure provides agreement of all verifiers
b) detectable nature of the blockchain re-organisation
c) the attacker’s very unrealistic luck in given example
d) and a dynamic status quo

By now the attacker realises that he is actually earning money by participating fairly in the network and is further incentivised to do so. The power of the consensus mechanism shows its nature.

If you want to join in as well: spin up a node! We welcome you to the network.