Update on Proof of Time Ownership
The creator of the Proof Of Time protocol, we reviewed in an earlier weekly brief, wrote about a fundamental limit of hybrid PoW/PoS consensus protocols in which the use of the lower hash power demand is economically used to attack the network.
He stated that on the assumption that miners are mining near break even revenue, the hash power is almost always consistent, as any increase in the hash power would make other miners lose income, so the network’s hash rate will always balance around by other miners leaving the network, but if a dishonest miner is willing to lose money he can quickly be able to control almost all of the hash power by introducing more hash power to the network and therefore decreasing the rewards of honest miners, those will promptly leave the network and only his hash rate would remain, this is called a 51% attack where one entity contains at least 51% or more of the mining hash rate, which would allow that miner to take control of the block chain accepting or denying whatever transactions he wishes, as stated in his reddit post on the efficiency:
So while a hybrid protocol can be more secure for a given level of miner reward (coinbase reward + fees), the maximum cost of an attack in such a system is only double that of a pure system (from requiring 50% of the profitable hash power to requiring almost 100%). No matter how much weight is placed in stake-based security, the requirement that some hash power be operated by honest miners makes a system susceptible to this attack.
This might not be the efficiency first planned by the protocol but it can still maintain the same security level as a regular PoW system like Bitcoin with almost half the mining cost, we’ll be sure to bring you updates!
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