What is Proof of Contribution?
For public blockchain, proof-of-contribution or PoCo, a new consensus mechanism developed by iExec, has been proposed. It is an algorithm used to convert user actions into blockchain contribution values. iEexc proposed PoCo to establish trust among untrusted devices and to provide off-chain computing consensus. A new proof of contribution (PoC) consensus mechanism is also used to evaluate the contribution of nodes using a contribution algorithm to choose the node with the greatest contribution value for generating a new block. PoC addresses the need for coin-agnostic consensus techniques for public blockchains by allowing them to be utilized in a range of applications that do not need the usage of cryptocurrency.
In this article, we will discuss different consensus mechanisms and proof of contribution in detail.
What are Consensus Mechanisms?
Blockchain systems use consensus mechanisms to agree on a single value or state of data for a distributed processor multi-agent system, such as cryptocurrencies. Among other uses, it allows you to keep track of items. In simple words, consensus mechanisms are different approaches used to obtain agreement, trust, and security across a decentralized computer network. In the cryptocurrency world, Proof-of-work (PoW) and proof-of-stake (PoS) are two of the most common consensus techniques.
Why do we need a Consensus Mechanism?
Public blockchains are self-regulating and decentralized, operating globally without reliance on one central authority. The blockchain relies on millions of contributors to verify and validate transactions and mine blocks, among other tasks. Considering that the blockchain’s status is constantly changing, these publicly accessible ledgers must ensure that transactions on the network are authentic and all participants are in agreement regarding the ledger’s status, using an efficient, fair, real-time, functional, reliable, and secure mechanism. This crucial function is performed by the consensus mechanism, which determines the legitimacy of contributions made by various participants, i.e., nodes or transactors of the blockchain.
What are the Types of Consensus Mechanisms?
There are different consensus mechanisms operating on a different set of principles.
Proof of Work (PoW)
Proof of work (POW) is a consensus technique commonly used in cryptocurrencies such as Bitcoin and Litecoin. A participating node must demonstrate that the work they have finished and submitted is qualified to add new transactions to the blockchain. Although, the entire mining process consumes a large amount of energy and takes a long time. Moreover, it necessitates the use of expensive mining equipment. Which is considered the drawback of this technique.
Proof of stake (PoS)
In contrast with proof of work (PoW), proof of stake (PoS) originated as a low-cost, low-energy consensus process. In addition, it involves allocating a proportional amount of virtual currency tokens to each participant node for the purpose of maintaining the public ledger. Nevertheless, this encouraging hoarding of crypto coins rather than spending has the disadvantage of doing more damage than good.
Proof of Capacity (PoC)
With Proof of Capacity (PoC), contributing nodes on the blockchain can share memory space. An updated public ledger is kept up to date by the node with the most RAM or hard drive capacity.
Proof of Activity (PoA)
Proof of Activity (PoA) on the Decred blockchain combines elements of both PoW and PoS.
Proof of Burn (PoB)
Proof of Burn (PoB) has the opposite effect, requiring users to send small amounts of money to non-accessible wallet addresses.
The Gap in Consensus Mechanisms
The characteristics of both PoW and PoS are that the algorithm assumes a node or a user has the resources. And according to them the nodes or users with more resources will win, and those with fewer resources have very little chance of winning. Moreover, the size of resources is not in sync with their contribution to the network.
In addition, resources and economic investment are exponentially correlated, which eventually leads to a concentration of power and calculations that threatens the network.
Therefore, with the belief that no effort within a network should be wasted, here is proof of contribution PoCo, taking into account any form of contribution that will exploit the long tail. It makes every contribution to the network useful. PoCo has a number of advantages over PoW, and it may be used on public blockchains.
What is Proof of Contribution (PoCo)
The proof of contribution is based on the user’s contribution to the network, along with the required hash calculation, to decide whether the user can win in the network’s competitive mechanism. PoC can be employed in the mining process of a typical blockchain. It not only provides confidence but also coordinates the many contributions to the network, ensuring that payments are always fair and on schedule. PoCo is a modular protocol with context-sensitive features. To consolidate results, POCO uses replication. This is solely a software solution that assigns a confidence level to the outcome and the requester can choose the confidence level.
What are the Benefits of Proof of Contribution
Proof of contributions has many advantages over POW and POS. Some of them are listed below.
- PoCo provides an energy-efficient cryptocurrency method. The PoCo method minimizes mining energy usage by rewarding the complexity of solving a cryptographic challenge.
- When miners no longer earn block rewards, they receive difficulty incentives in addition to the standard mining cost, which encourages them to continue mining.
- The resilience of PoCo is comparable to Poof-of-Work attacks (PoW).
- It provides a secure payment process.
- It uses a permission mechanism that can be used to control access to applications, datasets, and worker pools.
BuzzShow Network – A Proof of Contribution Application
BuzzShow Network is a decentralized social media platform built on blockchain technology. The platform uses proof of contribution mechanisms to reward its users for every action they perform on the platform whether it’s watching, sharing, uploading, streaming, or curating videos. Users are rewarded with Goldies (GLDY) – the platform’s native utility token for their contribution to the platform. These Goldies can be converted easily into ETh or Polygon Matic tokens. Moreover, they can also be exchanged for fiat currency. The platform is user-centric and user-friendly with the goal of distributing revenue fairly among all platform users.
BuzzShow Network integrates IPFS, which makes it a more secure and decentralized network. In addition, users can also benefit from the platform since it ensures content protection, confidentiality, and the flexibility to share their skills. BuzzShow Network has set copyright and content infringement policies. Preventing network copyright infringement will encourage users to develop more unique content. Because of its reward-based structure and decentralized approach, BuzzShow is a superior video streaming network.