An overview of why modern proof-of-stake protocols are insecure
A term used to define someone who commands a group. The leader is quite arguably the most important and has the biggest responsibility in a group. It’s the leader’s job to make sure everyone moves forward and shows the right path along the way. American author John C. Maxwell once wrote,
“A leader is one who knows the way, goes the way, and shows the way.”
However, reality isn’t so kind as to just let it be this way. With the biggest responsibility resting upon the leader’s shoulders, one false move and everything can fall apart.
Cryptocurrency and Leadership
Although the world of crypto doesn’t directly involve the physical world, the leadership concept can still be found, and it faces the same problems as well. There are blockchains that utilize protocols involving some form of leadership. However, blockchains utilizing such protocols pose risks to security, which can stain the reputation and halt worldwide adoption of cryptocurrency.
POS is a popular protocol used by blockchains that utilize the idea of leadership, where some validators decide on which transactions are valid.
There are many forms of POS, used by different blockchains, that utilize different features when it comes to transaction validation. A few examples are:
- Election — where validators vote on the transaction they believe is valid.
- Random selection — where validators are randomly selected to decide the valid transactions.
- Stake delegation — where others stake some currency on validators they trust, and the top voted validators select the transactions they believe to be valid.
There are a lot more features that are utilized but they all have one thing in common: validators deciding on which transactions are valid.
The problem with this is that the fate of everyone who is not a validator rests on someone else, which in this case, are the validators. You’re more or less letting strangers decide your fate and show you the way.
The Risks of Having a Leader
As the saying goes,
“With great power comes great responsibilities”
Being in the leading position gives you a lot of power as everyone will be following you. But what would happen if you make a mistake? Or even get greedy?
Making a mistake or being blinded by greed will not only affect you but also everyone who follows you, thus the consequences are a lot more severe. This can easily be seen in our political world, where world leaders cause the downfall of their country through corruption and such.
The Risks of Having a Leader in Crypto
As mentioned before about POS, the validators lead the way for everyone else in the blockchain. This could potentially lead to fraudulent activities as all you have to do is somehow influence the majority of the validators. Attackers could simply take over the majority of the validators and manipulate the blockchain in ways that benefit them.
Although there are different features being utilized by different blockchains, such as the ones mentioned above, the problem still persists as the chain is still being led by a group of validators.
To increase security, you’d have to increase the number of validators to make it harder for attackers to take over. However, this results in a much more complex communication system. This exponentially increases the complexity and time it takes for transactions to be validated, which decreases the performance of the blockchain.
So now you’re here with the dilemma of choosing between security and performance. Make your choice…
How about we don’t depend on leaders and make no compromises?
Wavelet’s Leaderless Solution
Wavelet introduces a new POS concept, a leaderless POS.
You have the validators and staking mechanisms of the current POS, but the validators aren’t deciding which blocks are valid. Wavelet utilizes its own unique system, which you can learn more about in Wavelet: Staking and Decentralization.
This leaderless POS solution doesn’t make any compromises between security and performance as Wavelet isn’t dependent on its validators for its POS protocol to work. The validators aren’t leaders in Wavelet. There are no leaders in Wavelet.
Having a leader might be nice sometimes as you can just be guided by them, but you do not want to be guided to your downfall. Wavelet’s leaderless POS makes no compromises and solves the problems that plague the current POS.
Leaderless, the way blockchains should be.