How the two algorithms compare

Consensus algorithms are processes in which place validators (also called nodes or miners) inside a blockchain community agree on the current state of the community. This mainly involves agreeing on whether or not a transaction submitted by a validator is genuine. Fraudulent or inaccurate transactions are rejected by the community assuming all validators appear pretty with no malicious intent. Validators are rewarded with cryptocurrency for submitting correct and genuine transactions, while malicious actors are penalized by relying on the consensus protocol.

For example, in proof-of-work (PoW) networks like Bitcoin (BTC), validators have to expend energy through expensive {hardware} to validate transactions, and if profitable, they get new tokens . If they act maliciously, they get nothing and the loss comes from the wasted energy used to submit the fraudulent or inaccurate transaction.

In Proof of Stake (PoS), customers stake tokens and earn other tokens for submitting genuine transactions, while losing a game for submitting inappropriate transactions.

In proof-of-time (PoT) protocols, the precept is the same, with validators receiving other tokens for submitting genuine transactions but losing tokens for submitting inaccurate or malicious transactions.

While PoS and PoT share some similarities, they are two very different protocols.

What is proof of stake?

PoS is a consensus algorithm that works by clients staking their tokens as collateral by locking them into a sensible contract. The system works by choosing a validator, also known as miners or nodes, to track a block of transactions. The validator must validate the transactions contained in the block to ensure that there is no inaccurate data contained within.

Then the validator submits the block to the blockchain and if the block has been validated appropriately, it gets other tokens as a reward. If a validator behaves maliciously or lazily, often submitting incorrect or fraudulent transactions, they lose some of the tokens they have staked.

Validators who stake the next amount of tokens usually tend to be chosen to confirm transactions. Staking the next amount of tokens also earns the validator other rewards as they usually earn a hard and fast proportion mostly based on the blockchain community. For example on Ethereum 2.0, validators currently earn 4.2% on their tokens. Validators are also more likely to be chosen if they have staked their tokens for an extended period of time.

Becoming a validator within the PoS system is open to anyone, but the barrier to entry is excessive due to protocol recognition, with many nodes on PoS blockchains. The more additional nodes a community has, the more a consumer may want to stake a larger amount of tokens to become a validator.

As a result, staking pools, which are managed by validators, are typically used by common crypto clients who need to stake their tokens. On this system, a consumer deposits their tokens directly into a pool and the tokens are staked by validators on behalf of the token owner. In exchange for this, clients typically pay a “pool payout,” which is a proportion of the tokens they earn from staking.

What is proof of time?

Proof of Time (PoT) is a consensus algorithm that uses a voting system to decide community validators and focuses on how long a community validator has been active in the community in addition to their popularity. The protocol was developed by Analog and is based on Delegated Proof of Stake (dPoS) which is a modified model of PoS.

Proof of time refers to its ledger as a time chain and works through the use of a rating rating, verifiable time frame (VDF) and staked tokens to know who will get in order to add a new ledger transaction. The rating system works by assigning a rating to validators in the community primarily based on their age and past efficiency. Validators get increased scores for being trustworthy and being active in the community for an extended period of time. Staking more tokens also makes it more obvious that a validator can be chosen.

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PoT is like dPoS since community clients vote to determine which delegates can validate the next block. Nevertheless, there are some variations in the voting process, with the PoT having multiple voting phases. Throughout the first stage of voting, validators, often referred to as time voters, submit a block that includes information as well as transactions to add to the Timechain. If the block is accepted, the block is committed, with all transactions in the block being processed.

Time Voters are chosen through a range of courses which appears on the Voters Assessment Rating and the number of tokens staked. The method uses this data in addition to VDF to randomly choose a time voter, and only one can be chosen at a time.

Time voters also run a VDF to find out if they have been chosen to add a new block to the time chain. If chosen, they validate the block, generate a VDF proof, and submit each piece of information to the rest of the nodes in the time chain.

In the second stage, the block and VDF proof are distributed to 1,000 different voters to be double-checked before being added to the time chain. If more often than not voters simply agree to accept the transaction, it is added to the time chain.

How the 2 Consensus Protocols Evaluate

PoS and PoT share a number of similarities. First, they each require validators to stake tokens as collateral when verifying transactions, with subsequent stakes increasing the odds of being picked. The main distinction is the scoring and voting system used by PoT, adopted by additional verification by 1,000 validators before the transaction is submitted to the ledger.

PoS is the additional possibility of style and knowledge, used by Solana, Polkadot, Cardano and Ethereum 2.0. As for the benefits, each program requires users to stake tokens instead of spending power, making them power-efficient options for proof-of-work (PoW). This could also be a downside, as malicious actors with access to lots of money can theoretically take over the network.

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However, this is an unlikely situation. To cause a 51% attack, for example, a malicious actor would want to own 51% of the tokens in the entire community, which can be very unlikely and very dangerous for the attacker, especially with more fashionable blockchains. like Ethereum and Cardano. PoT further provides the layer of security by requiring each transaction to be double-checked by a thousand validators, with 2/3 of them having to agree whether or not the transaction should be added to the ledger.

Each blockchain community has specific necessities tailored to the needs of the community. Many blockchains continue with PoW and PoS for their needs, while other algorithms like PoT, dPoS, and proof-of-history (used by Polkadot with PoS) meet the needs facing their blockchain networks.

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