Abstract
Consensus mechanism plays an important role in blockchain. At present, mainstream consensus mechanisms include proof of work (PoW), proof of stake (PoS), and delegated proof of stake (DPoS). PoW, as is widely used in virtual currency, results in significant energy consumption; PoS and DPoS are proposed to reduce energy waste caused by PoW, but their disadvantage is that they tend to create Matthew Effect (ME): “the rich get richer.” In order to balance the discourse power of new nodes and elder ones, this paper proposes a flexible consensus mechanism called proof of engagement (PoE), based on the activity and contribution of network nodes. We analyze the incentive compatibility of PoE from the perspective of mechanism design. In our simulation experiments, we tested the profit changes under PoW, PoS, and PoE. The results illustrate it is easier for new nodes to accumulate their profits under PoE than under PoW or PoS, so as to reduce the negative impacts of ME.
Highlights
Bitcoin [1], since it was proposed in 2008, has been considered the most successful application of blockchain
Our contributions are summarized as follows: (i) We propose proof of engagement (PoE), a flexible consensus mechanism for a smart contract system based on blockchain, which shows the ability to reduce the negative impacts of Matthew Effect (ME)
This study mainly investigates a novel consensus mechanism called proof of engagement
Summary
Bitcoin [1], since it was proposed in 2008, has been considered the most successful application of blockchain. The carbon footprint of Bitcoin has reached 35.33 Mt CO2 per year, comparable to the carbon footprint of New Zealand The reason for such a disappointing situation is that under PoW, network nodes need to run the SHA256 algorithm repeatedly until they successfully find the hash solution; they will be rewarded by many digital currencies; this process completely depends on the computing power of the devices. Another problem is the centralization of computing power. To increase the chances of getting a reward, the users either buy more powerful computing devices and keep them running at full capacity or join some huge mining pools [7], which causes a shift in the computing power from decentralized back to centralized [8] and greatly threatens the security of the blockchain network
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