A Community-Oriented Consensus Scheme Formulated to Deliver Low Cost, Fast, and Highly Scalable Transactions
The consensus scheme is at the heart of every platform built on delivering decentralized transactions. The scheme determines how the platform as one selects, transmits, evaluates and agrees on the validity of such transactions. In order to describe the consensus algorithm that Toronet is based on, a review of prevalent consensus algorithm is presented in the first section. These schemes are then analyzed based on their merits and challenges. A detailed description of the Toronet algorithm is then presented, including how it maintains the security of the network while delivering low cost transactions at high speed, instant transaction finality, and at a large enough scale to potentially power micro-transactions in our communities.
Most of the prevailing consensus system for public blockchains fall into four broad categories:
· Proof of Work
· Proof of Stake
· Voting Based and Byzantine Formulations
· Proof of Authority
These are described below. Readers already familiar with existing consensus systems can omit this section, and proceed to Section 3 which describes the consensus system that is the focus of this writing.
Proof of Work (PoW) is a consensus mechanism used in blockchain networks to achieve distributed consensus and validate transactions. In a PoW system, participants, often called miners, compete against each other to solve complex mathematical puzzles. The first miner to solve the puzzle earns the right to add the next block to the blockchain and is rewarded with newly minted cryptocurrencies.
Here is a breakdown of how a typical PoW system works:
1. Puzzle Generation: The network generates a cryptographic puzzle that miners must solve. The puzzle is designed to be computationally expensive and requires significant computational power to find a solution.
2. Mining Process: Miners utilize their computational resources, typically in the form of specialized hardware called mining rigs, to attempt to solve the puzzle. They repeatedly hash the data in the…