In this blog post, we are going to discuss more proof of time (PoT) the consensus mechanism, and How it works in the blockchain?
Proof of Time is more efficient and eco-friendly than proof-of-work or proof-of-stake consensus mechanisms because it requires less electricity, doesn’t require expensive mining equipment, and can last indefinitely.
For an in-depth look at how the project works, let’s dig into how the PoT mechanism actually works and why it’s better than the traditional alternatives.
This method, which differs from the proof-of-work or proof-of-stake mechanisms that exist in other blockchain protocols, sets up an incredibly secure token that will only increase in value as time goes on and there is less and less DAY in circulation.
What is Proof of Time?
Proof-of-Time (PoT) is a new mechanism designed to achieve Proof-of-Stake consensus in a more energy-efficient manner than PoW while still allowing nodes on the network to earn rewards by validating transactions.
This mechanism works in tandem with other proposals like sharding and ring signatures to create a complete Ethereum scaling solution capable of handling thousands, even millions, of transactions per second.
It also forms a significant component of Decentralized Autonomous Organizations or DAOs.
To understand how Proof-of-Time works we must first look at how Proof-of-Work and Proof-of-Stake mechanisms work.
Related Article: Proof of Stake (PoS): What is it and How does it Work?
How PoT comes to Picture?
PoT is different in two ways, Firstly, rather than relying on a proof-of-work or proof-of-stake mechanism to secure its network, it leverages proof-of-time.
Proof of Time invented by Dr. Sergey Popov along with his colleagues at MIT Media Lab and the Chrono Logic team adds additional security to decentralized networks using a verifiable method that works alongside consensus algorithms used today such as proof-of-work and proof-of-stake.
The other difference with Popov’s invention is that it doesn’t require new infrastructure for deployment.
It works alongside existing blockchains to increase security and interoperability across multiple chains.
Related Article: Proof of Work (PoW)
How does PoT work?
ChronoLogic’s proof-of-time protocol runs on top of Proof-of-Authority, a consensus mechanism that requires users to stake an amount of Ethereum (ETH) or DAY in order to become an Authority.
Being a miner with Proof-of-Authority means being able to collect transaction fees and block rewards while validating blocks. Each time a new block is created, two Authority nodes are selected to process it.
This ensures speed and reliability for their token holders as well as governance over their blockchain ecosystem by its token holders as well. Instead of looking at hash power as seen in Proof-of-Work.
Proof-of-Time uses CPU clock cycles contributed by all Authority nodes combined this ensures that miners can not increase their earnings by simply adding more hardware as ASICs do in Proof-of-Work mining.
Related Article: Secure Proof of Stake (SPoS): Revolutionary Consensus
Why proof-of-time?
You’re probably wondering why ChronoLogic uses proof-of-time as opposed to proof-of-work or proof-of-stake mechanisms.
This is a valid question, because both PoW and PoS are well-known, tested, and simple methods for ensuring consensus on a blockchain.
Apart from being faster, more energy-efficient, and scalable in nature compared to Proof of Work (PoW) or Proof of Stake (PoS).
It also introduces several new use cases that were previously not available in Proof of Work or Proof of Stake.
Related Article: What is Delegated Proof of Stake (DPoS)?
Proof of Time vs Proof of Work vs Proof of Stake
Proof-of-time isn’t proof-of-work or proof-of-stake. Instead, it’s a third way to prove that you spent a certain amount of time on something.
Proof-of-time works in a similar way to proof-of-burn: you show you’ve burned something and hope that someone else believes that it had value.
So when Alice burns 1 DAY she can later prove to others (Bob) that she has burned 1 DAY.
Bob doesn’t have any specific reason to believe Alice over anyone else who also claims they have burned 1 DAY but if he trusts that his friends will confirm what she says then he might be willing to accept her claim.
This is where decentralization comes into play because Bob would like all of his friends (and their friends) to confirm what happened so he knows which transaction is valid.
Blockchain Consensus Protocols for dummies
Proof-of-work and proof-of-stake are popular blockchain consensus protocols, but they’re not without their flaws.
PoT is based on a novel blockchain consensus protocol we call Proof-of-History, The protocol is open and transparent and requires no specialized hardware.
Proof-of-time offers a superior alternative: it works better for networks with higher transaction rates, and it distributes rewards more fairly among token holders.
It is designed to be future compatible and can work with any cryptocurrency token or store of value (such as precious metals).
ChronoLogic is more secure than existing proof-of-work and proof-of-stake protocols because it uses time itself as an anti–double-spending measure.
Thus, it doesn’t rely on external inputs such as energy usage that could be gamed by malicious actors.
Related Article: Chain Based Proof of Stake: Comprehensive Guide
Why ChronoLogic uses PoT?
Like both proof-of-work and proof-of-stake, proof-of-time relies on a number or nonce. The difference is that time works in conjunction with an Ethereum smart contract to release new DAY tokens.
The longer someone leaves their computers mining for DAY, as more people take up mining, the higher chance they have of receiving a reward.
Proof-of-time rewards miners based on how long they’ve been mining, rather than how much work has been done.
It effectively precludes botnets from participating while discouraging miners from pooling resources as everyone wants to be rewarded for making hash rate available over time.
Related Article: What is a Smart Contract for Cryptocurrency?
Why Owning a Cryptocurrency with PoT?
Without a minimum amount of time passing to mint new DAY, it’s meaningless. The proof-of-time algorithm used by ChronoLogic is as follows: Every full node connects to a minimum number of other nodes, but that network reaches consensus over which transactions are included in each block faster than Bitcoin or Ethereum do.
This consensus mechanism makes it possible for ChronoLogic to replace Proof-of-Work (PoW) with Proof-of-Time (PoT).
Proof-of-work creates coins using electricity and expensive hardware; proof-of-time uses only your computer clock.
There aren’t any giant mining farms or even servers involved in producing DAY, which is revolutionary because PoT doesn’t give unfair advantages to large contributors or miners who have access to cheap electricity or ASIC hardware.
Just like Bitcoin and Ethereum make payments and transfer peer-to-peer digital cash practical today, PoT unlocks previously unimaginable use cases for cryptocurrency.
Benefits of Proof-of-Time (PoT)
Proof-of-Time allows for improved scalability as there is no upper limit on how many transactions can be placed into a block.
Also, Proof-of-Time will solve Ethereum’s difficulty bomb issue without requiring any hard forks.
This results in an elegant solution to Ethereum’s current challenges of scaling and governance that doesn’t require changes to an existing protocol.
Finally, PoT aligns incentives of all network participants while eliminating problems associated with inflationary reward schemes such as proof-of-work or proof-of-stake protocols.
The importance of these benefits cannot be understated: they are fundamental to making blockchain technology practical and useful at scale.
Future Need of Proof-of-Time (PoT)
The most immediate use-case for proof-of-time is to peg time to a store of value.
Instead of using more resources for mining, PoT will make it possible to mine time, which adds scarcity and hence increases value.
DAY is a great place to start because its purpose matches that desire perfectly: It’s primarily used as a token on gaming platforms where gamers are rewarded with DAY in return for their time spent playing.
ChronoLogic envisions future Proof-of-Time use cases related to user-generated content (UGC), access rights for smart contracts (protocol limits), or metering time of dApps usage/resources.
Applications of Proof of Time
Proof-of-time can be implemented in a variety of use cases. One possible implementation is to have time play a role in security and access privileges.
If a user holds 1% or 10% of all tokens (or depending on what threshold is appropriate for that specific application) that user could have extra security permissions such as key access to a decentralized exchange, file sharing, hardware ownership, and control, etc.
Another potential use case involves monetizing Ethereum DApps.
For example, users can pay a number of DAY tokens in order to gain entry into an otherwise closed DApp community.
Conclusion
Time is a valuable asset that we cannot create or destroy. So why not use time as a store of value? This is exactly what ChronoLogic aims to do by pegging time to a token named DAY.
The day can be used for payments and transactions, which will steadily rise in value over time, as more time is locked away in Proof-of-Time (PoT) smart contracts on Ethereum Blockchain.
While PoS and PoW seem to be gathering momentum in cryptocurrency circles, it’s still unclear how secure these consensus mechanisms are; proof-of-time may well serve as an effective solution down the road.
There are some concerns regarding energy consumption but if you take into account proof-of-stake consumption vs consumption incurred when you don’t have access to your stake due to PoS, it becomes clear that there is not much difference between these two consensus mechanisms.
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