Brief analysis of POW+POS hybrid consensus algorithm mechanism of BED

Since the birth of Bitcoin, a new way of trust has come into people’s sight, that is the proof-of-work(POW) consensus mechanism. For the first time, people discovered that transactions can be completed without intermediaries and only through distributed accounting. This will greatly reduce the role of intermediaries and entire intermediary organization in this society. Decentralization has opened the door to a new world for public, and with the gradual popularization of blockchain knowledge, the shortcomings of POW have been analyzed and criticized by people.

With the POW algorithm mechanism, new blocks can only be created by miners. Miners deploy hardware (mining machines) and calculate how to effectively solve a specific mathematical problem. Every time a miner completes an effective calculation, the blockchain network can accept the blocks they build, and the blockchain network accepts The chain with the most proof of work (that is, the most hashed or calculated) chain is regarded as the legal chain. This means that miners are incentivized to mine on the longest chain. If the attacker controls enough hash power to attack the “real chain”, it can replace the newest block by reconstructing the “old” block, realize the rewrite (or reconstruction) of the blockchain, which is also known as the 51% attack.

Strong as Bitcoin, it was also forked to BCH on November 13, 2017, and seized part of Bitcoin’s hash power. In 2018, the hash power battle between BCH and BSV led to a sharp drop in Bitcoin network hash power, and the price of Bitcoin dumped 50 %.

In order to solve the problem, a new consensus mechanism named Proof of Stake(POS) has been designed. POS determines the next block producer based on the amount of tokens in the wallet. The basic principle of the consensus algorithm is to believe that those who have the most benefits will make reasonable decisions for the entire network.

POS eliminates the need for energy-intensive mining activities, but the lack of significant energy expenditure has also caused other problems. Take the fork for example. Node will be mined on two chains separately, because the cost of creating another chain is very small, so they can be gain revenue on both chains. This is a problem for blockchain networks, because the purpose of the consensus mechanism is to only recognize that there is a legal chain and only recognize the state of the legal chain.

The BED development team is well aware of the advantages and disadvantages of POW and POS. For this reason, in the consensus algorithm, BED combines the advantages of the two and adopts the original POW+POS hybrid consensus algorithm mechanism.

POW consensus component of BED is similar to other POW-based projects (such as Bitcoin), using the HASH-256 hash function. POW miners of BED are responsible for proposing new blocks to the blockchain, but the validity of the blocks must be verified by the POS consensus node before the new blocks can be added to the blockchain network.

POS component of BED and how it builds a blockchain is unique. To participate in the POS consensus proof, holders must lock their BED tokens to purchase “Tickets.” When users purchase tickets, the BED tokens they use will be locked (they cannot spend), and the lock-up period will last until their tickets are called by the network’s pseudo-random function to complete the voting, which is a mining cycle (1008 blocks). Tickets bring opportunity cost to the POS mechanism. In this way, it can ensure that POS voters are fair in the game and can follow the best interests of the network.

POW+POS hybrid consensus algorithm mechanism of BED is similar to ETH2.0. It perfectly combines POW and POS on the chain to achieve consensus upgrade in a simpler way. Moreover, under the premise of ensuring network security, BED has realized the concept of mining profit by miners and coin holders at the same time. I believe that in the future, the ecology built on BED public chain will also be stronger, creating a new world in the blockchain world.