Proof of Reputation Introduction

Benjamin
Benjamin
Sep 1, 2018 · 3 min read

Participants (block signers) must have a reputation that is important enough to face significant financial and brand consequences if they try to deceive the system. This is a relative concept, because almost all companies suffer significant losses if they are caught trying to cheat, but large companies usually have more losses, so the selected companies use less (smaller companies).

Once the company proves its reputation and passes the verification, they can vote as an authoritative node into the network. At this point, it is like a Proof of Authority Network (PoA), and only the authoritative node can sign and verify the block (more about PoA).

Reputation is Everything

Reputation is critical to the business. Companies that act in an unethical manner are affected in many ways, including finance (fines, loss of income), declining valuations, brands (distrust) and public relations. Trust is the cornerstone of a successful business. Once a brand loses its trust in customers, it can take years to recover.

Let us take the mass emission scandal as an example. They operate on their own to deceive the public and their own customers. Once in trouble, it was a financial and public relations disaster that caused them to lose $25 billion and their share price fell 50%, and their brand lost a lot of trust. Their reputation has been tested and they have paid a heavy price for it. Reputation proving relies on the risk of significant losses to achieve trust in the network.

PoR is secure

PoR adds a layer of protection that may never exist, which allows companies to work together to keep each other honest. Imagine if Volkswagen worked with Ford, Toyota and other companies to verify and validate their emissions tests. When competitors test each other’s vehicles, it is highly unlikely that Volkswagen will try to deceive the system. Even if they try to act in an evil way and understand the risks, once they are caught, they will soon be voted out of the consortium and lose the right to become part of the network.

In addition, since these companies have acquired native GoChain tokens (similar to PoW) that run nodes and signature blocks, it is in their best interest to honestly maintain network security and trustworthiness.

Finally, 51% of companies in the network still need to collude at the same time to perform the notorious 51% attack. This would mean risking the reputation of 26 companies (assuming 50 authorities).

Technical advantages

The benefits of reputation proof are:

  • It’s green — no need to consume a lot of power to secure the blockchain (Bitcoin and Ethereum estimate an annual electricity bill of more than $12 million as part of its consensus mechanism).
  • This is safe (see above).
  • It can be executed faster because it removes the heavy computations required by PoW and has nodes of known number and size.
  • It is decentralized because the company is fragmented.

Business Benefits

In addition to the above technical advantages, from a business perspective, reputation proof is also beneficial. One of the main problems is that enterprise companies may prefer to use PoR to use the network instead of using an untrusted anonymous network, such as a network using PoW or PoS.

In PoR, everyone knows who is operating the network (each company runs each node) and where the nodes in the network are running (which country). The company can then decide if they trust the company running the node, so they trust the network. If they do trust it, they are more likely to run business processes on it. We believe this can open the door to new ways for companies to work together in a common blockchain.

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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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