What is Proof-of-Time consensus?
The two most popular algorithms used in blockchain technology are Proof of Work (PoW) and Proof of Stake (PoS). These are also known as consensus mechanisms. In a blockchain, all the validation of transactions takes place based on these consensus rules. Proof of Time (PoT) is a new type of algorithm developed by Analog. Their goal is to create a more efficient blockchain by improving on the older mechanisms.
Proof of Work vs. Proof of Stake
It is vital to look at how popular consensus mechanisms work to understand what is different in proof of time.
Proof of Work (PoW)
The oldest consensus mechanism in the blockchain is the Proof of Work. PoW was launched with Bitcoin but was soon adopted by Litecoin, Monero, and Ethereum 1.0. Computation power is the basis on which Proof of Work operates.
Your chance of success depends on the computing power you use when all the miners compete to earn rewards on the network. You are allowed to add a new block of transactions to the blockchain when you succeed. You are rewarded with crypto for the computing power used after the new block is verified.
It requires a lot of energy as the competition is in the form of cryptographic puzzles. The only true reward in this process is to add new transactions to the blockchain, as energy consumption is costly. This will not be verified if you add false transactions, and thus you will not earn any reward.
Proof of stake (PoS)
Proof of Stake needs validators to “stake” their crypto as collateral instead of using computation power. Based on the number of tokens staked, validators are then chosen to add new blocks to the blockchain. You can earn additional rewards if the block is verified correctly. Tokens are deducted from the staked amount if validators act wrongfully.
Solana, Polkadot, and Cardano have opted for Proof of Stake, which is a popular alternative to Proof of Work. Ethereum will also soon switch to Proof of Stake. It is gaining popularity as it does not require too much energy and computing power. It is a much more energy-efficient alternative to Proof of Work.
What is different about Proof of Time?
A voting system is used to determine validators in Proof of Time. Reputation and a validator’s active time on the network take precedence in this system. You can also call it an altered version of Proof of Stake as it is based on delegated Proof of Stake.
Analog Litepaper states that in PoT, any node can join and confirm blocks without being obstructed by hardware or money. This makes it a completely decentralized consensus algorithm. Validation is based on a fixed stake and a ranking score on the blockchain. Algorithms assign ranking scores based on experience with the validator. This includes the experience of validators and also the accuracy of past validations.
The purpose of the fixed stake is to make the system fairer for all. The native token of the platform is Analog, and it requires all validators to stake an equal number of Analog tokens on the network. Consequently, the chance of validating a node depends on the accuracy of the validator and not on how much money you stake.About 1000 other validators are included by the system as a double check. It is only added to the blockchain once two-thirds of the validators concur to accept the transaction.
The Advantages of Proof of Time
An equal system for validation is created by the Proof of Time. It does not require expensive hardware like in Proof of Work. You also do not need to validate blocks by staking an increasing amount of money. What counts is your performance as a validator after you stake the initial amount required.
Blockchain is safer in the reputation system. The chances of being picked increase with the higher reputation of the validator. When validators perform their duties diligently, the blockchain will become more accurate. Also, this system allows more reputed validators to earn more.
The Disadvantages of Proof of Time
Building a reputation in this system might take a lot of time. The Proof of Time algorithm might not even choose you as a validator if you want to jump in right now and start validating.
Analog uses this promising mechanism right now. There are no alternatives to choose between blockchains if you like this system.
In theory, Proof of Time is a system that is supposed to fix all the major issues of the older consensus mechanism. Blockchain is safer with the reputation system. You can also increase your chances of rewards if you execute validations correctly. You can not spend more money to gain more power in this system. The system is equal for all at a fixed stake. We expect more applications implementing Proof of Time for equal and fair blockchains.