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March 16, 2020, 03:04:16 PM |
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(GAL is clon of NXT)
(Proof-of-Stake Consensus
Nxt was the first to implement a pure proof-of-stake consensus protocol. Reliable and energy efficient, with minimal hardware requirements, the ingenious Nxt proof-of-stake algorithm has passed the test of time, with no successful attacks in practice since its launch in 2013.)
Proof of Stake
In the traditional Proof of Work model used by most cryptocurrencies, network security is provided by peers doing work. They deploy their resources (computation/processing time) to reconcile double-spending transactions, and to impose an extraordinary cost on those who would attempt to reverse transactions. Tokens are awarded to peers in exchange for work, with the frequency and amount varying with each cryptocurrency’s operational parameters. This process is known as mining. The frequency of block generation, which determines each cryptocurrency’s available mining reward, is generally intended to stay constant. As a result, the difficulty of the required work for earning a reward must increase as the work capacity of the network increases.
As a Proof of Work network becomes stronger, there is less incentive for an individual peer to support the network, because their potential reward is split among a greater number of peers. In search of profitability, miners keep adding resources in the form of specialized, proprietary hardware that requires significant capital investment and high ongoing energy demands. As time progresses, the network becomes more and more centralized as smaller peers (those who can do less work) drop out or combine their resources into pools.
In the Proof of Stake model used by Gal, network security is governed by peers having a stake in the network. The incentives provided by this algorithm do not promote centralization in the same way that Proof of Work algorithms do, and data shows that the Gal network has remained highly decentralized since its inception: a large number of unique accounts are contributing blocks to the network[2], and the top five accounts have generated 42% of the total number of blocks.
Gal’s Proof of Stake Model
Gal uses a system where each coin in an account can be thought of as a tiny mining rig. The more tokens that are held in the account, the greater the chance that account will earn the right to generate a block. The total reward received as a result of block generation is the sum of the transaction fees located within the block. Gal does not generate any new tokens as a result of block creation. Redistribution of Gal takes place as a result of block generators receiving transaction fees, so the term forging (meaning in this context to create a relationship or new conditions[3]) is used instead of mining.
Subsequent blocks are generated based on verifiable, unique, and almost-unpredictable information from the preceding block. Blocks are linked by virtue of these connections, creating a chain of blocks (and transactions) that can be traced all the way back to the genesis block.
Block generation time is targeted at 60 seconds.
The security of the blockchain is always of concern in Proof of Stake systems. The following basic principles apply to Gals Proof of Stake algorithm:
A cumulative difficulty value is stored as a parameter in each block, and each subsequent block derives its new difficulty from the previous blocks value. In case of ambiguity, the network achieves consensus by selecting the block or chain fragment with the highest cumulative difficulty. This is covered in more detail in section 3.4.1
To prevent account holders from moving their stake from one account to another as a means of manipulating their probability of block generation, tokens must be stationary within an account for 1,440 blocks before they can contribute to the block generation process. Tokens that meet this criterion contribute to an account’s effective balance, and this balance is used to determine forging probability.
To keep an attacker from generating a new chain all the way from the genesis block, peers allow chain re-organization of no more than 720 blocks behind the current block height. Any block submitted at a height lower than this threshold is rejected.
Due to the extremely low probability of any account taking control of the blockchain by generating its own chain of blocks, transactions are deemed safe once they are encoded into a block that is 10 blocks behind the current block height.
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