Is Proof Of Work (PoW) Dying?
Which consensus mechanisms are used by growing blockchain like Tron, XinFin, EOS?
Is Proof of Work (PoW) really dying? This is a question in everybody’s mind these days. Let’s dig a bit deeper to try and understand the reason behind the potential end of PoW consensus mechanism.
Proof-of-Work is the first consensus algorithm ever implemented. This mechanism is currently being used in Ethereum, Bitcoin, its forks, such as Bitcoin Cash, Litecoin, Dogecoin, and many other prominent cryptocurrencies.
Let Us Have A Short Review Of What PoW Actually Is.
In a Blockchain network, users send each other digital tokens. A decentralized ledger gathers all the transactions into blocks. However, care should be taken to confirm the transactions and arrange them into blocks. This is the responsibility of special nodes called miners, and the process is called mining.
With PoW, miners compete against each other by solving a complicated mathematical puzzle to complete transactions on the network and get rewarded.
PoW is a battle-tested, researched and technically proven means of securing a blockchain, but it isn’t perfect. Proof of Work cannot be fast. No network distributed between thousands of unknown entities, with unknown hardware, in a trustless fashion that requires an insane amount of computational power to process even just a few transactions can ever perform well. It’s just physically impossible.
The main disadvantages of PoW are huge expenditures and a 51 percent attack.
Huge expenditures — Mining requires highly specialized computer hardware to run complicated algorithms. Currently, the Bitcoin Blockchain consumes roughly the same amount of electricity annually as the entire country of Chile.
51 percent attack — Apart from the extortionate levels of energy the Bitcoin blockchain consumes many worries that hardware manufacturing has become extremely centralized and that the large mining farms hold too much power over the network. Currently, more than 51% of hashrate in the Bitcoin network is provided by a few large mining pools.
However, there are various other consensus mechanisms like Proof of Stake, Proof of Authority, Delegated Proof of Stake, Byzantine Fault Tolerance, etc. Each has its own benefits and shortcomings and can be used for different use cases.
What Is The Future Of Blockchain?
There are various potential and non-PoW Blockchains out there, which are worth to know about. Ethereum has also planned a hard fork from PoW to the PoS consensus mechanism in an attempt to improve its scalability.
In the battle for the future of the decentralized internet, three competitors have risen to the top: TRON, XinFin, and EOS.
TRON
TRON uses Delegated Proof-of-Stake mechanism, which is a more efficient version of Proof-of-Stake mechanism. In DPoS consensus, users stake their coins to ‘vote’ for preferred delegates, who get to validate transactions and create blocks. Votes are weighted according to the size of each voter’s stake.
The TRON code base was originally a fork of Ethereum. As a result, Ethereum smart contracts and token standards are compatible with the TRON ecosystem.
Why TRON Uses DPoS?
- It is much faster than tradition Proof of Work and Proof of Stake systems. This makes TRON to consistently handle as much as 2000 TPS.
- It is energy efficient compared to the power-hungry Proof of Work systems.
- No specialized equipment is required to become a user or witness. A normal computer is good enough.
XinFin
XinFin is a hybrid blockchain that blends both private and public blockchain along with smart contracts. A hybrid blockchain provides controlled access and freedom at the same time and is entirely customizable.
The members of the hybrid blockchain can decide who can take participation in the blockchain or which transactions are made public. This brings the best of both worlds and ensures that a company can work with its stakeholders in the best possible way.
It uses XDPoS (XinFin-DPoS) consensus mechanism, which is exclusively crafted for the XinFin hybrid blockchain. Apart from a regular DPoS consensus mechanism, it comes with KYC enforcement on the nodes, thus solving problems with traditional Enterprise KYC providers. This can help the corporate members to create and maintain their own identity while also allowing participants to view the KYC data. Also, the Self KYC feature of XinFin DPoS is enterprise and regulator friendly.
EOS
Like TRON and XinFin, EOS stresses that it is a platform for decentralized applications that is scalable and usable in the real world, unlike Ethereum, which is way too slow. To achieve this scalability, EOS also relies on a DPoS mechanism in order to confirm its transactions where 21 elected Block Producers actively maintain and build the network.
However, unlike TRON, XinFin or Ethereum, EOS has zero transactions fees so is essentially free to use. EOS also uses a unique governance system that includes a written constitution and the ability to change the protocol, account access, and the constitution itself if at least 15 out of the 21 Block Producers agree.
Perhaps unsurprisingly, there is no undisputed winner. All the blockchains mentioned above are flawed in some way, and each person will have a different opinion depending on the use case. You may believe that TRON is the superior blockchain network, or EOS since its platform is more active and scalable than the others.
Xinfin is also a great choice to make because it full-fills the requirements of both who wanted a public blockchain and who wanted a private one. This led to the creation of a hybrid blockchain that is suited for all.
While all of them have their pros and cons, XinFin could lead to a newer revolution through it’s over the top features. Public blockchains such as Bitcoin, EOS, Ethereum, and Tron are suited for public transactions, but they do not fit the needs of enterprises who wish to keep their transactions to themselves. Thus, an enterprise-ready blockchain such as XinFin is the need of the hour for getting major enterprises across the globe to use the technology.
No matter what you believe, the blockchain race is a long one and whoever is leading today may fade into oblivion next year. The good news is that if you have a strong conviction on which blockchain is the best, you will be handsomely rewarded for being correct by simply buying its coin and holding onto it.
