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Welcome to Twiki -- A Toichain wiki
This is the unofficial Toichain wiki site. Contents on this site is subject to frequent changes.
Introduction
The blockchain protocol was introduced via a paper entitled "Bitcoin: A peer-to-peer Electronic Cash System" [1] by a Satoshi Nakamoto in 2008. Although there were other peer-to-peer file-sharing projects before this time, such as Napster [2] and Bittorrent [3], and other electronic currency attempts, the Bitcoin project demonstrated the strongest staying power compared even to the currently running 23,000+ other blockchains. Unlike the new cryptocurrencies, the Bitcoin is often referred to as "digital gold" for its scarcity, there are only 21 million hard-coded Bitcoins in the protocol. Other protocols (and associated currencies) have different token supply amount and monetary policies.
The most attractive common blockchain features are the decentralized consensus-driven decision making process and step-by-step cryptographic proving system. In addition to cryptocurrencies, there are many applications that can benefit from such a secure store of value with transaction ledger design without any central authority.
Before trying to understand the Blockchain protocol and its variants, it is important to understand the differences between an algorithm and a protocol.
In general, an algorithm is a program that runs on a single computer solving a single problem. A protocol, however, is a program that runs on all computers in parallel solving a single problem. An algorithm must be transformed to run on all computers in parallel solving the same problem before it to be called a protocol. Therefore, protocol development is significantly more difficult than algorithms.
Consensus Protocols
There are two popular types of consensus protocols: Proof of Work (POW) [4] or Proof of Stake (POS) [5]. Others include Proof of Possession(POP)[6], Proof of History(POH)[7]. The design goal of the consensus protocol is to eliminate unfairness and code tampering, since most protocols are Open Source. For cryptocurrency applications, hacking and code tampering are difficult to avoid if not impossible. To date, the Bitcoin network using POW has suffered criticism on escalating electricity consumption [8]. The POH network Solana suffered multiple single-point-failure incidents [9]. All consensus protocols are susceptible to 51% attacks [10]. However, Bitcoin has been proven the strongest against the common hacks [11].
Blockchain Trilemma
The blockchain protocol has three major aspects: security, decentralization and scalability -- three terms that do not have precise definitions but intuitively understood by many [12]. The trilemma was first introduced by Vitalik Buterin, one of the co-founders of Ethereum network. The problems are real, however. There seems no obvious solutions to accomplish all three goals using known methods. Therefore, all proposed solutions revolves around "opportunity costs" focusing only on partial goals.
Proof of Stake Protocols
There are many POS protocol designs.
- Statistic Multiplexed Computing - Statistic multiplexing method was first proposed in 1952 by von Neumann.
- Statistic Multiplexed Blockchain -
- ↑ https://bitcoin.org/bitcoin.pdf
- ↑ https://www.napster.com/us
- ↑ https://www.bittorrent.com/
- ↑ https://www.investopedia.com/terms/p/proof-work.asp#:~:text=Proof%20of%20work%20(PoW)%20is,a%20reward%20for%20work%20done.
- ↑ https://www.investopedia.com/terms/p/proof-stake-pos.asp
- ↑ https://csrc.nist.gov/glossary/term/proof_of_possession#:~:text=Definition(s)%3A,associated%20with%20the%20public%20key.
- ↑ https://www.infoworld.com/article/3666736/solana-blockchain-and-the-proof-of-history.html
- ↑ https://rmi.org/cryptocurrencys-energy-consumption-problem/#:~:text=Bitcoin%20alone%20is%20estimated%20to,fuel%20used%20by%20US%20railroads.
- ↑ https://cryptoslate.com/heres-why-the-recent-solana-outage-took-almost-a-day-to-resolve/#:~:text=25%20%E2%80%94%20the%20first%20interruption%20in,3%20minor%2C%20outages%20in%202022.
- ↑ https://originstamp.com/blog/has-there-ever-been-a-51-attack-on-bitcoin/#notable-51-attacks
- ↑ https://www.theguardian.com/technology/2014/mar/18/history-of-bitcoin-hacks-alternative-currency
- ↑ https://sensoriumxr.com/articles/what-is-the-blockchain-trilemma
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