Today, several algorithms are presented on the market, according to which new blocks appear in the blockchain: this is Proof-of-Work, Proof-of-Stake, Proof-of-Space, Proof-of-Authority, their variations, as well as hybrid algorithms, which is Proof-of-Activity. It is about the latter that will be discussed today.
Consensus algorithms, according to Microsoft research, are the most reliable tools in the context of blockchain competition. Today companies use several types of record confirmation protocols: Proof-of-Work, Proof-of-Stake, Proof-of-Space, Proof-of-Authority, their variations, as well as hybrid algorithms, one of which is Proof- of-Activity, it will be about it today (in addition to it, there are also unpopular algorithms such as Proof-of-Burn, Proof-of-Capacity, Proof-of-Storage and others).
We will pay close attention to the first of the hybrid, namely Proof-of-Activity. But still, we strongly recommend that you read about the other algorithms, since it will be necessary to understand the principles of the Proof-of-Activity.
Principle of operation
The algorithm was invented not so long ago (in 2014), and it is not for nothing that it is called a hybrid: it combines the features of Proof-of-Work and Proof-of-Stake.
The process of writing to the blockchain begins with the miners creating a blank for blocks indicating the hash of the previous block, their own data (public address), the index of the current block, and a one-time code. After generating an empty block header, if it meets the current complexity requirements, the node sends this header to the network. Such blanks must have a number less than the one specified by the system. An important point: during the operation, there is no need to calculate the entire block of transactions, as in the case of PoW, these operations consume significantly less electricity. In fact, everyone in this situation can be a PoS miner (read about what Proof-of-Stake is), and in this case they are already called stakeholders. The workpiece must be signed by a certain number of stakeholders, after which a full-fledged block is formed and fits into the blockchain. If one of the holders (signers) is not available at this moment or does not participate, then new blanks with different sets of holders are generated.
As a result, the reward for the formed block is distributed between miners and holders, which saves the system from the advantages of miners. In fact, one more degree of protection is introduced. The charging of tokens for block mining occurs on average 1 once a day, which is done to protect against gaining control over most of the computing power or hacking the algorithm.
PoA Features
To protect this algorithm, there are several schemes. The first of these is the very workpieces that serve as a kind of information storage point, and each of these points carries information about previous blocks, confirmed by network members, but does not include the entire list of transactions. This separation is necessary because the work of Proof-of-Activity is clearly divided between the PoW miners who create coins and the PoS holders that confirm transactions. Thus, the load on the network is reduced, and therefore the algorithm requires constant data exchange to form a block with transactions: the miners begin the block, and the holders end up, in simple words.
Another protection step is that the algorithm makes it impossible for one participant to control the network, even if there is such a Zeus who owns half of the coins in the network: he will not be able to independently create new blocks. Miners, while doing their work, will simply be able to throw out blanks from the network, allowing attackers to form the blockchain alone.
Thus, the PoA algorithm is an extremely interesting hybrid, where the participants are insured against each other: PoA-Mining prevents PoA miners or PoS miners from monopolizing the network.
Practical implementation
Today, among the whole variety of blockchain projects, only two of them use Proof-of-Activity: this is the new project Eredcuum created in Decred 2015 and the new project Enecuum. And, we emphasize, Decred does not directly indicate his affiliation with PoA, therefore its inclusion in this micro-list is very conditional. Decred is a cryptocurrency (DCR), in which the main focus is on a hybrid system of PoW / PoS without a direct indication that it is this system - PoA. In her description, it is explicitly stated that this hybrid system is used to ensure that a small group will not be able to dominate the flow of transactions or make changes to Decred without community sanctions. This project was created with the idea of full and open participation of all comers. Thus, without calling himself a PoA project directly, Decred professes the same principles.
The second project, Enecuum, is already directly offering its version using the Proof of Activity (PoA) protocol. The ability to confirm transactions from virtually any device connected to the network has been implemented, which allows us to achieve the highest possible degree of distribution of the system and its high resistance to various attacks. Accordingly, the operation of the system has already been described above. Miners look for the desired number for blocks of different sizes (according to the Proof-of-Work system), the winner fills the blocks with transactions, and then, at the second stage, the 64 of the owner of the network nodes, selected at random, are signed. After that, the record is checked by another node owner (also random) - and here the Proof-of-Stake scheme comes into play, when the maximum network time that owns the node is the most likely candidate to participate in the check. Thus, the creation consists of three stages, and participants are rewarded according to the following scheme: 70% goes to the first miner, 20% is divided between 64 signatories, and another 10% goes to the verifier.
The Enecuum project has not yet been fully launched: while only the mining mechanism is working, issue of tokens and an open mining process are expected in the near future. Recently, a testnet simulation with the main network was also launched and the issue was scheduled for May. In addition, his PoA code is open and available on github.
Conclusion
As we can see, the progressive algorithm of Proof-of-Activity has not yet found wide application, but, having undoubted advantages over Proof-of-Work and Proof-of-Stake, more precisely - combining them, it will certainly interest the participants of new projects, being less costly in all senses, as well as a safer algorithm.