Proof of Time-Ownership

A new consensus protocol was suggested on /r/BitcoinDiscussion this week as an alternative to pure Proof Of Work. Proof of Time-Ownership protocol is a Proof of Work and Proof of Stake hybrid that sets a time-based race for PoS blocks, PoTO releases X indices of coins each second, giving the active owner of one of these indices a chance to mine a new block, this supposedly increases decentralization as it gives the chance for anyone running a full node to find a new block, it also increases the incentive to run a full node further increasing decentralization.

The benefits of this are that miners are basically chosen randomly without (economical) ability to grind for more rewards. More people would be able to mine because there would be basically no additional cost over a normal full node for mining. Because so many people could do it, it could basically eliminate miner centralization.

One of the potential issues of this consensus is the risk of having full nodes DDOSed by other competing nodes, as the addresses holding the coins are public the possibility of knowing which address can make the new block is there, but while this could be problematic for the first few addresses, it isn’t sustainable to DDOS a full network, another is the initial centralization problem, as the getting coins in the first few blocks gives you a huge advantage in making the next blocks, this is partially solved by already having a hybrid Proof Of Work system, as the rewards mined by the PoTO minters is just about 10% of the block reward.

This new consensus protocol provides a fair spin to the PoS consensus, we’re looking forward to seeing its implementation.

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