Any decentralized blockchain is based on a consensus. This is how it works in simple words. Let’s presume I have $10, I reveal a desire to give them to you, both you (receiver) and me (sender) agree to this deal. When a party doesn’t understand the meaning of this request (like a language barrier), then a problem can happen.
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A consensus is required for validation of similar deals in the blockchain so all parties of each transaction will understand each other without even understanding or seeing each other. Each entity may receive the correct interpretation of transactions.
What amazes me how this consensus called Proof of Foundation works. But, at first, I need to explain how it differs from traditional blockchains.
3 major consensus types:
- Proof-of-Stake (PoS) – investors usually stake cryptocoins for adding new blocks, the more your stake (share) the more chances that you will be picked for creation of a new block in the selected blockchain. This consensus is far from perfection from all aspects.
- Proof-of-Work (PoW) used by Bitcoin and Ethereum – this consensus provides the guarantee of a computational difficulty will remain kept in the future, especially in the case of conflicts. PoW also provides the true and correct version of the next block of the selected chain. PoW also prevents hackers from using the blockchain for forking. The main problem here is a requirement of high energy followed by high fees.
- Proof-of-Activity (PoA) – this consensus tries to combine these two algorithms PoS and PoW. But here blocks are not responsible for containing transactions. Instead, the mining starts according to PoW consensus then the PoS algorithm picks a random validator’s group for signing each block (again the higher is investor’s stake the higher is the chance of picking). After this validation there a full block where fees of transactions are shared between all entities of the blockchain – validators and miners.
Proof-of-Foundation by Nexty
Dual Cryptocurrency Confirmation System is the main basis of Nexty’s platform. This means that the Nexty’s blockchain uses 2 tokens – Nexty Coin (NTY) and Nexty Foundation (NTF) – for different purposes.
NTF token works on the new algorithm with consensus called as Proof-of-Foundation (shortly is PoF). PoF was built on the ideas used by PoA consensus but it is more decentralized. NTF tokens present in each transaction of NTY coins in the network. Only NTF owners can mine NTY coins and receive them as rewards. Also, VIP holders of NTF coins can provide the executing accounts for authorization of block sealers. As a result, the whole network is also authorized and users receive rewards:
The Nexty’s team claimed that 40 bln of NTY tokens were generated by PoW – after mining all these tokens the involved machines get a full responsibility for confirmation of all transactions. The Nexty’s platform offers a solid alternative to users who are not satisfied with Ethereum and similar classic blockchains due to their speed, commission fees, queues or other problems. I am going to support the Nexty team and their great platform during 2018 for sure.
Kazracage
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