Consensus Algorithm in OTN Blockchain

Benjamin
Benjamin
Aug 31, 2018 · 3 min read

Each blockchain technique relies on a consistency algorithm, which is basically a set of rules for managing network operations and its users/nodes. The idea behind the blockchain is that all participants are equal in governance and trust, so for this reason, one cannot trust only one node for verification purposes: you must set up validation rules.

The most popular networks — such as Bitcoin or Ethereum — use proof of work (PoW) as a rule. The miners (verification nodes) provide operability for the entire blockchain network, and for essentially this type of work being calculated, they are “rewarded” to a portion of the appropriate encryption. The more miners in a PoW-based network, the more complex calculations must be performed. Therefore, when the computational operation takes a considerable amount of time, the network will eventually reach this point.

In fact, the transactions in the PoW blockchain can be expressed as follows: After deploying to the network, only one “miner” from a large number of “miners” pool gets a block, as we already know — will take quite a while Time is even more.

What is the difference between the OTN situation? Compared to the above-mentioned “Veterans” blockchain, OTN will use another consensus algorithm — Delegated Proof (DPoS). If PoW is a mathematically based algorithm, then DPoS is a socioeconomic algorithm with the following characteristics:

  • A block can only be signed by a limited number of nodes. This is a step towards concentration, but because of it, we have achieved very high performance speeds. Coordinating the operation of 21 nodes is much easier than coordinating the operation of tens of thousands of nodes.

- Select the signature node by voting. No node will cause too much damage to all blockchains, but its harmful work will certainly be noticed, so users will change their preferences and instead support another new ordered node.

- Mining does not exist in the network. This means that all funds (tokens/coins) are already deployed on the network, and the nodes that sign these blocks won’t get any rewards, as people say. Their rewards only include a portion of the transaction costs within a block. But in order to get this way — the node needs to get the user’s voice.

- All holders of the OTN base currency have voting rights. But most likely, most user groups are too lazy to do this. This is why the algorithm has a small specification in the naming — delegate. You can delegate your vote to someone who has a more active position on the network and he will vote for you. If you disagree with the way your trusted representative votes, you can revoke this assignment and redistribute it at any time.

The more funds a participant receives, the stronger his or her vote. Or rather, if an entity in the network receives a large number of votes, it is eligible to be part of the network’s “governance system.” This ‘over-utilization system can change network rules and allocate operating expenses. If the members of the Governance System begin to perform poorly, it is likely that he or she will lose the ballot and the top seat.

Therefore, if the rule is “more powerful — more legitimate” for the PoW algorithm, then for the OTN Foundation, the more vivid “more abundant — more reasonable”. It is possible to crack a PoW-based network, which accounts for 51% of the total network capacity, which is very expensive. In our case (DPoS) — it is necessary to have 51% of all funds deployed in the network. Which may be more expensive. Why destroy a network that provides a lot of money?

Almost forgot the most important thing. Thanks to DPoS, our blockchain is very fast and the deal is very cheap. The signature process is completed within 3 seconds for each transaction. OTN’s data throughput is comparable to current Visa and Mastercard!

In addition to a bunch of boring general information about consensus algorithms, careful readers may have noticed the first way to make money in our network.

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Bitconch

A new protocol for smart contract and DApp

Benjamin

Written by

Benjamin

Blockchain industry practitioner.

Bitconch

Bitconch

A new protocol for smart contract and DApp

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