Blockchain University

Consenus: Proof of work and the upstarts

#bculaunch

What makes Bitcoin special and why are so many smart people working on alternatives?

Tendermint | Pebble | NXT | Ethereum |Hyperledger et al...

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What is the consensus?

• A secure global ledger
• Anonymously ordered
• Independently verified by every full node

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A Secure? global ledger

Crypto....

• Sane but not finely tuned choices of cryptographic primitives

Selfishness

• A finely tuned set of incetives secure the network
• Value At Risk becomes a new parameter in cryptananalysis

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Proof of Work is special

Proof of Work is special

• Randomizes selection of the next block
• Thermodynamically commits to a certain history
• Attacks on the system risk both real resources and probablistic opportunites

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Proof of Work is fragile

Proof of Work is fragile

• Incentives can collapse: See Dogecoin
• New use cases can change the risk reward model. Tokenization and metaprotocols can increase the frequency of attacks on the ledger
• Poisson process limits the speed and scalability

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Proof of Work is scarce

Proof of Work is scarce

• Proof of Work implies a (small) finite number of blockchain structures
• A few opportunties to get the long term incentives right
• Proof of work is tightly coupled to currency applications

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Two movements

• Scale and improve proof of work. Create frameworks for experimentation
• Build entirely new systems with new incentive structures and potentiall increased stability

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Enormous amounts of learning in the last few years

• Taxononmy of vulnerabilities of consensus algorithims
• A set of new systems that appear resistant to those attacks

#bculaunch

Enormous amounts of learning in the last few years

• Taxononmy of vulnerabilities of consensus alogrithims
• A set of new systems that appear resistant to those attacks

#bculaunch