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Proof of Assignment (PoA) vs. Proof of Work (PoW) and Proof of Stake (PoS)

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Proof of Assignment (PoA) vs. Proof of Work (PoW) and Proof of Stake (PoS)
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Proof of Work (PoW), Proof of Stake (PoS), and Proof of Assignment (PoA) are cryptocurrency mining protocols. Essentially, they are computer algorithms that allow cryptocurrencies to function.  

If you’ve been following the crypto world, then you’re probably already familiar with the two main protocols known as PoW and PoS.

As it stands, there are currently approximately 716 PoW cryptocurrencies and approximately 543 PoS cryptocurrencies in existence.

What Are the Major Differences Between Proof of Work (PoW) and Proof of Stake (PoS)?

These are currently the most popular mining methods and are used by most major cryptocurrencies.

However, they have some significant differences.

Proof of Work (PoW)

The PoW protocol is designed primarily to prevent cyber-attacks on the network and is used to confirm Bitcoin transactions around the world.

When a Bitcoin transaction is triggered, all unverified transactions are put together in a pool. Miners then work to check that these transactions are legitimate by competing to solve complex mathematical problems using their computers’ processing power.

The first miner to solve this problem will have their block written on the public ledger and will be rewarded in Bitcoin by the protocol. Finally, the transactions are confirmed and written to the public blockchain.

Essentially, the more that users successfully mine, the bigger their reward.

The main issue with PoW is that it is extremely resource-intensive, and lots of energy is required to find potential solutions to these complex problems. In addition, because so many people are now joining the mining process, the difficulty keeps getting higher in order to keep the mining time the same.

This means that the process is very expensive, and the protocol has incentivized many people to buy more hardware and build giant mining farms. As a result, a very small percentage of organizations control most of the hashpower, and lots of miners who can’t afford to buy high-end equipment are excluded.

This is a problem – especially when Bitcoin is often considered to be the most decentralized blockchain.

Bitcoin, the most popular and highest valued cryptocurrency, and many other cryptocurrencies (many of which are based off Bitcoin) use the PoW protocol.

Proof of Stake (PoS)

The purpose of PoS is very similar to that of PoW. However, the way the result is obtained differs significantly.

PoS works by miners putting a proportion of their coins on a transaction block to check it. The miner is chosen by the algorithm based on a number of factors, such as how many coins they own, and how long they have owned them for.

Essentially, the more the user stakes, the more chance they have of claiming the block reward.

The PoS protocol has some significant advantages over the PoW protocol. Most notably, it is faster and more efficient, as it requires both less computational power and less power consumption, and transactions take only a few seconds.

Technically, PoS is compatible with IoT devices. However, it is not a feasible choice due to the fact that the end user is still required to save a copy of the ledger, which means that IoT devices would be required to use far more memory than is currently expected from IoT devices right now.

Yet another problem with this protocol is that it primarily benefits the big players who have a lot of coins available to stake.

Cryptocurrencies such as NEM and PeerCoin use the PoS protocol to confirm transactions. In the very near future, Ethereum will also adopt this protocol as part of the Casper upgrade.

What is Proof of Assignment (PoA), and Why Could It Be a Better Alternative?

Proof of Assignment (PoA) is an algorithm developed by IOTW. It is a more recently developed protocol than both PoW and PoS.

The computational power required for this algorithm is far lower than both PoW and PoS, and it requires significantly less power consumption.

PoA can process thousands of transactions per second. Their target is to reach 1 M/tps, which will vastly increase its scalability and enable it to process more transactions than Visa.

Perhaps most importantly of all, the PoA protocol can be deployed on IoT devices, with no risk of either power loss or memory loss – something that will become increasingly vital in the future as the IoT industry continues to expand.

The IOTW cryptocurrency – a competitor to the popular IOTA cryptocurrency – is currently the only cryptocurrency that uses the PoA protocol to confirm transactions.

In addition, the blockchain will be monitored – first by IOTW’s team and later by a committee – to ensure that there are no irregularities and that no one is abusing the network. This will ensure that no one is able to build giant mining farms, and levels the playing field for everyone.

The Future of Crypto Mining

We’ve already seen some significant changes in the development of mining protocols over the past couple of years – primarily, with more cryptocurrencies moving away from PoW and towards PoS.

However, it is likely that, given the ever-increasing expansion of the IoT industry, we could begin to see yet another shift away from PoS, and towards PoA over the next couple of years.

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Guest Post

Hyperledger Sawtooth: Performance Problem and the way to solve it

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Hyperledger Sawtooth: Performance Problem and the way to solve it

The Hyperledger global initiative within the Open Source movement, bringing together hundreds of technology giants [for example, Huawei, Intel, and Samsung], startups [Blockstream, Lykke, Consensys] and solutions [Netki, Factom, bloq], has become a real push for the entire blockchain industry in forming not only a strong community but also a completely different perception of technology through the prism of innovations in business.

Hyperledger can be called a global collaboration organized by the Linux Foundation. In turn, the uncommercial Linux development consortium, the Linux Foundation, creates sustainable ecosystems around open source projects to develop technologies and implement them in businesses.

Founded in 2000, the Linux Foundation supports communities and innovative projects through financial and intellectual resources, making ambitious and successful contributions to creating technologies for widespread use.

The consortium launched Hyperledger in December 2015 and in February of the following year, it became known about the first participants of the initiative.

The main Hyperledger’s focus is to improve the reliability and performance of the blockchain through comprehensive cooperation with the platform participants, whose number is already over 250.

It is worth noting that for many projects Hyperledger has become the starting point for the development of their own business apps: many solutions have been created on the basis of the platform, ranging from smart contracts to complex multi-stage innovations.

One of the advantages of using Hyperledger is the interaction between its participants since third-party developers can make their own changes to the already created platforms, thus modifying the services and providing new opportunities to end users.

Hyperledger expands its global business and improves its internal processes, developing also the technologies of the Internet of things, logistics, industry, etc.

Platform participants have access to five main frameworks, on the basis of which blockchain solutions can be created, depending on the goals set by the projects’ creators.

Hyperledger Burrow

This framework appeared in 2014 and works in conjunction with Ethereum Virtual Machine [EVM]. Solutions based on Hyperledger Burrow allow enterprises to use smart contracts to optimize their business processes.

Hyperledger Fabric

Initiated by the IBM tech giant, the Hyperledger Fabric framework is the foundation for developing complex, scalable applications for corporations.

Businesses can use smart contracts and many other components. Feature of Hyperledger Fabric can be called a high level of performance, off-chain channels, as well as integration with corporate access control systems.

Hyperledger Iroha

Hyperledger Iroha is designed for easy implementation into a project. This framework is suitable for many businesses, as it is distinguished by a rather light construction and focus on mobile platforms.

In addition, by analogy with the Fabric, Hyperledger Iroha has a well-developed access control system.

Hyperledger Indy

The framework is used for decentralized identification. Hyperledger Indy provides reusable services for creating and using independent digital identifiers.

Hyperledger Sawtooth

Hyperledger Sawtooth deserves special attention since this framework is quite popular. Operating on the new consensus algorithm, Proof of Elapsed Time [PoET], which stands out from the rest with minimal use of resources, the Hyperledger Sawtooth is considered by the community as one of the most promising.

This solution’s developer, Intel, is confident that Hyperledger Sawtooth is ideal for businesses whose requirements exceed the capabilities of the available public blockchains.

The PoET algorithm provides highly efficient consensus achievement without a serious resources’ cost even in an environment where contractors don’t know each other and they have no reason to trust other participants.

The Sawtooth blockchain platform is designed to counteract denial of service attacks that become more likely in a public blockchain environment or in an environment in which unknown parties can interact.

The reason for the popularity of this framework can also be called the ability to integrate with hardware security solutions, “reliable execution environments”, among which are scalable Intel Xeon E processor from Intel.

At the same time, in Hyperledger Sawtooth were found flaws. In the GitHub user profile eugene-babichenko, the problem that the developer was able to solve was described in detail.

It is important to note that the network built on Hyperledger Sawtooth consists of 30 nodes located in different regions [from Europe and the USA to Singapore] and at three different cloud providers.

Having contacted the developer, it was possible to find out that while the node was experiencing problems with the network connection and could not access the minimum number of peers, the blockchain node, in turn, began to consume an increasing amount of RAM.

As a result, the system crashed in about a day, operating on a server with 1 GB of RAM.

The blockchain developer, after careful monitoring, determined that the component that caused the crash was a Sawtooth validator.

It is responsible for connecting all the other components of the blockchain node [transaction processors, APIs, consensus modules], and also manages network connections and data storage.

The vulnerability was discovered in the inner essence of Sawtooth, which is designed to manage some of the computing and networking staff.

The study revealed that the system was overloaded due to saving instances when trying to reconnect to peers. Since each instance has its own waiting time [which was originally used only to block calls], it was decided to clear the futures’ collections based on this timeout.

The developer of the company, using the example of this vulnerability, warns his colleagues about the need to be attentive with the use of RAM in their apps.

Moreover, Eugene noted that the use of open source products can be really useful in cases where your tool behaves strangely and requires immediate corrections.

In the case of the problem described above, just forked Sawtooth core, fixed it, tested the fix and sent this change to the upstream repository.


The blockchain technology is undoubtedly capable of transforming the most well-known business approaches. The Hyperledger platform, in turn, is an indispensable engine of this progress, since it focuses on the development of blockchain solutions for enterprises.

At the same time, you should not lose sight of the fact that Hyperledger is not a magical place that will solve all the corporation’s problems with a few clicks.

To work with frameworks, you need a strong team that owns all the knowledge in the field of blockchain technologies and businesses digitalization. It is also necessary to pay attention to the previous experience of developers.

For example, the company, whose member fixed the problem in Hyperledger Sawtooth, previously contributed to OpenZeppelin and Ethereum, and also provides services to develop a Remme solution.

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