Saito is a layer-one blockchain. It's an open network that runs cryptocurrency applications in browsers without plugins, private APIs and non-open infrastructure. Saito survives without an owner while funding the nodes that provide user-facing infrastructure for its own network and other public blockchains.

The network is noteworthy for being more secure than Bitcoin while making payments not just to miners and stakers but also the nodes in the network that offer data-services to users in the network. Saito ensures that producing blocks is always expensive. Honest nodes pay those costs with the fees they collect from users. Attackers must pay out-of-pocket and are guaranteed to lose a quantifiable amount of money with each block they produce. There is no point at which this cost-of-attack falls below zero. Unless attackers match the amount of work done by the overall network, they either cannot produce blocks as quickly as honest nodes, or are able to produce blocks but not collect payments. Attackers must either go bankrupt or permit others to add work to their chain, thus solving the 51-percent attack.

Saito uses routing work to secure the blockchain rather than hashing or staking.

In Saito, nodes are paid for routing transaction fees into blocks. The more fees a node collects and shares with the blockchain the more it earns. This creates a high-bandwidth blockchain, as fees pay directly for network infrastructure rather than being “wasted” on mining or staking. This also eliminates the separate fees for “API access nodes” or “transaction processors”.

Routing work is also simpler than mining or staking. Routing is something every network does. Having miners and stakers only adds complexity, but the best thing is that routing work is more secure. Hashpower and stake can be rented or bought. But you cannot rent or buy a transaction fee without losing money. With routing work nodes that collect fifty-one percent of the network’s fees can only fifty-one percent of network revenue at most, and produce fifty-one percent of the blocks on the longest chain. The fifty-one percent attack vanishes like a bad dream.

Together with Routing Work, Saito uses a technique called Automatic Transaction Rebroadcasting. This forces old transactions to compete with new ones for space on the blockchain. In market equilibrium the most profitable strategy for block producers is to ensure the same amount of data is deleted from the chain as is added each block.

Saito is a simple yet elegant solution to economic issues and market failures. Try it out yourself at the Saito Arcade or find out more at the blog.

Originally posted by David Lancashire to https://org.saito.tech/blog/ - September 9, 2019.

We periodically receive correspondence from people working to wrap their heads around Saito. One common issue people have is the idea that not using mining to produce blocks creates a threat to the network as similar to POS:

"With work as a percentage of the transaction fee, I believe there is an issue with selecting who gets to produce a block. Paying to produce blocks is an issue because no real world resources are spent. This means that you can try multiple times to produce blocks that benefit you."

As the Saito whitepaper explains, block producers are paid when golden tickets are included in subsequent blocks. So there is no way to produce blocks that benefit them more than others. And even if they could, what would be the point? Block-flooding defenses prevent attackers from spamming the network, while multiple blocks split miner focus and reduce the chance of a payout at all.

The mining payment is ungameable because it is costly to win. The routing payment is ungameable because it is costly to win: you only get money by paying more to the network than you get back. Honest nodes have zero problems with this – they are sharing fees given to them by real network users. But the same approach is a huge problem for attackers as it forces them to haemorrhage cash.

As a result, when someone attacks a Saito network, the proper response for the honest nodes is to sit back and light-up a cigar as the attacker empties his wallet into theirs. In the unlikely but delightful case that a Saito network is targeted by a state actor or Silicon Valley behemoth able to sustain their cost-of-attack for some time, impatient users may consider pushing up the burn fee to speed up the pace at which the wealth transfer completes, while more forward-looking participants may consider selling the attackers more tokens lest they run out and be forced to stop their wealth transfer prematurely.

Either way, since no-one has an unlimited supply of money, all attacks must necessarily end. At that point, other network participants may consider purchasing their own Swiss chalet or South American ranch with their share of the windfall profits.

But what about grinding attacks? If attackers can create blocks but then their attack fails they can get their money back. So if the attackers is trying to reorganize the blockchain, but they aren’t willing to spend enough money to overwrite the chain then the attack fails then the attacker gets their money back. So attacks are costless, no?

This question is trapped in the POW mindset, which says, “producing a block is expensive, therefore producing a series of blocks is expensive.” But do we really care about the first property or the second?

    1. Saito guarantees the cost of writing blocks in time. There are no “grinding attacks” that lower this cost — to produce blocks for less money attackers must increase the time between blocks. If attackers want to create a slower fork for less money of course they can do that… there are no shortage of POW or POS that do exactly this.
    2. This question implies there is some “hack” as in many POS networks where minting a special block somehow cheats the payment mechanism and reduces the cost of attack. But this is not the case. There are no “savings” to be had by creating multiple starting blocks for a fork. Attackers who solve golden tickets burn money on mining. Attackers who do not have no hope of getting their money back.
Those concerned that Saito makes it possible to purchase blocks at all should be more concerned about these attacks in POW and POS networks. It is TRUE that you can always buy blocks in Saito, but you can also do this in POW networks (the BCH / BSV fork involved an attack of this sort) and the situation will only get worse as the block reward falls and mining must be paid for out of transaction fees alone. POS networks are worse since there are the sort of grinding attacks you are talking about, staking pools are rapidly becoming a thing, and the ROI from transaction fees will only ever incentivize a small amount of staking on the lowest layer (which competes with economic activity within smart contracts as well as the broader economy).

The reality is that all blockchains that depend on external markets for their security function (hashpower / capital) are experiencing the emergence of business models that monetize the ROI from mining / staking by opening control of the market to anyone with a bank account and a willingness to spend money. This is one reason it is so important to solve the 51 percent attack and shift to genuinely secure mechanisms like Saito. True security comes with security functions that ensure attacks are ALWAYS expensive, as this is the only way to make sure they eventually bankrupt the attacker and stop.