What is PoT? Better than PoW and PoS?

Blockchain systems utilize different consensus mechanisms to run and maintain their networks. In order to run, they require computational power across many different computers to help decentralize the network, ensure its security against attacks and process transactions. Today, we would like to introduce PoT(proof of transaction), an mix of PoW(proof of work)and PoS(proof of stake), a better consensus mechanism for the future blockchain. We will introduce the PoW and PoS first, and then PoT.

This consensus mechanism sees a miners receive a block of transactions and compete to solve a complex mathematical problems to verify the block, and earn a reward of coins in exchange. Once the mathematical problem has been solved, the block will have been verified and transactions can then be added to it. It is then added to the block before it, hence the name “block-chain” to describe this public ledger system. This updated ledger will be received by all other users of the network, and the process continues. In return for their use of computational resources, the miner will receive a small amount of cryptocurrency or other reward for their work.

Building consensus becomes really easy when you just need to utilize your computational power to solve the mathematical problem with other competitors. The more computational power you have, the more you get to earning the reward coins, like BTC, LTC, and other coins.

The problem is, miners with little computational power will become unsatisfied and leave the network in the end. This is in effect centralizes the network and places an increasing amount of network power into the hands of a smaller amount of mining groups, allowing them to effect the network and potentially act maliciously.

Another problem with the network is that a huge amount of computational power has been implemented to mine, which makes it extremely inefficient. Taking Bitcoin as an example, the mining network uses more electricity than some countries, including Ireland and Nigeria, and one transaction on the Bitcoin network uses the equivalent power consumption that a house would use in a month.

In PoS, no mining exists, but instead holders of the coins are given a chance to create the next block and validate it for the blockchain depending on how many coins in the system they own or stake. Those with more coins will have a higher chance of staking a block, and receiving the transaction fees for staking the block. This has been compared to a dividend payout for shares.

However PoS faces the “nothing at stake” problem, where these stakeholders may create two blocks and receive two sets of transaction fees, affecting the integrity of the network without receiving penalty. This problem is looking to be combated by burning a certain amount of coins from those who behave badly.

PoW will end when there is no profit for mining and all miners quit the network, but PoS will last, because there is no need to mine. In terms of BEY , it represents the overall proof of stake on the BitEye Platform. When 90% of BEYs were minded, holders of BEY have the right to share 80% of the revenue of the exchange which comes from the transaction fees.

As blockchain evolves, a new wave of consensus models have been created to take advantage of the benefits of both PoW and PoS systems. It is likely that these hybrid models will find a way into mainstream applications that can benefit from the robustness of PoW architectures and the flexibility of PoS models.

And, BitEye is committed to combining the benefits of PoW and PoS systems.

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