Wienchain’s Consensus Algorithm Explained
A consensus algorithm can be defined as the mechanism through which a blockchain network reaches consensus. Since public blockchains do not rely on a central authority, the distributed nodes need to agree on the validity of transactions through the use of consensus algorithms. The algorithms assure that the protocol rules are being followed and guarantee that all transactions occur in a trustless way, so there is no double-spending of a single coin.
Wienchain is a hybrid consensus algorithm having both concepts of Proof-of-Work (PoW) and Proof-of-Service (PoSe) to solve the existing issues pertaining to security and decentralization with sustainability and scalability in mind. Block rewards are given to both PoW miners and PoSe owners through the Wienchain Masternode Network.
As Wienchain’s value, network circulation, and hashing difficulty increases, users are rewarded with coins through the PoW algorithm. Consequently, as traditional mining becomes less rewarding over time, a progression into PoSe increases sustainability as the energy requirements of the network are significantly reduced.
This is the type of algorithm used by our miners. Proof-of-Work is a concept in which a system which requires a feasible amount of work in order to deter malicious uses of computing power such as launching denial-of-service (DoS) attacks or sending spam emails. All transactions made on Wienchain are recorded on a public ledger to ensure that users don’t spend their holdings twice.
Tampering with the ledger is detected through hashes, long strings of numbers that also serve as proof of work. Place a given set of data through a hash function (X16Rv2), and it will only generate one hash. The hash is a one-way function; it cannot reverse engineered to obtain the original data. It can only be checked to determine whether the data that generated the hash matches the original data.
PoW also solves the dispute of determining fair representation in majority decision making. The majority decision is represented by the longest chain, which has the greatest PoW effort invested in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the PoW of the block and all blocks after it and then catch up with and surpass the work of the honest nodes.
A mining node is basically a validation node which uses the hardware of your own or rented, CPU or GPU, to verify a block. A mining node can team up with other nodes and send guesses to a common pool, known as pool mining, to increase chances of guessing but then counts as only one node. Our mining node uses the PoW consensus algorithm. Miners are paid 21% of the block rewards.
Wien Masternode Network Proof-of-Service
Proof-of-Service (PoSe) was a concept actualized to solve problems or shortcomings of the PoW method. The computing power needed to mine only increases as the difficulty increases resulting in consuming greater amounts of electricity. This isn’t really sustainable in the long run and miners might need to sell a generous amount of coin just to foot the bill.
The PoSe addresses this issue by instead awarding mining power proportional to the number of Masternode held by a miner. Therefore, a PoSe miner is limited to mining a percentage of transactions that are relative to the number of Masternode, unlike a PoW miner who utilizes raw energy (electricity).
- Wien Masternode Network Operation: Masternodes are formed by depositing 25,000 WIEN to a wallet which will lead to the activation of the nodes, thus allowing it to multiply all across the network. To be a Masternode, one must have the following: 25,000 WIEN Collateral, Public IP Address, Masternode Signature (secondary public key).
- Wien Masternode Incentive Program: For this incentive program, the node must store a minimum of 25,000 WIEN for the Masternode to get started. Once activated, users on the network will receive services from the nodes and get an incentive bonus. The Masternodes are also paid through block rewards. They are paid 49% of the total block rewards.
Proof-of-Work (PoW) and Proof-of-Service (PoSe) are two common consensus algorithm used in blockchain technology. Leveraging on the advantages of both, Wienchain uses PoW and PoSe based validation methods in a hybrid fashion to increase security and sustainability in the blockchain. Block rewards are given to both PoW Miners and PoSe owners through the Wien Masternode Network (WMN).
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