Bitcoin’t Native Security Protocols: A Detailed Look at How We Can Bolster Efforts Moving Forward
As the new year approaches, the crypto community at large is looking forward to how the economic future of Bitcoin plays out in the coming few months. Not only that, over the course of the past few weeks, many people from within the cryptosphere have been hotly debating as to which consensus algorithm is best suited for cryptocurrencies in general.
Which One Would You Choose: PoW (dPoW) Or PoS (dPoS)?
In their most basic sense, PoW and DPoW pretty much make use of the same mining framework. However, in terms of their design infrastructure, they make use of differing organizational formats. For example, the PoW protocol assumes that the primary user is in fact the owner of the hardware, whereas in the case of DPoW, the protocol assumes that a network of people are ready to give their computational power to a centralized authority.
Now, if we were to take into consideration the mechanics of either the Delegated PoW or PoS algorithm, we would see that the core difference in their operability lies in the fact that they require users to relinquish their rights over their hashing power— so as to procure more profits.
So Which One Is Really Better Amongst The Two?
To answer this question, we need to first see if the ownership aspect is of preference to the user. If so, we can safely say that any option where a user has to relinquish his/her decision-making power, the ultimate goal is more slanted towards generating additional profits.
Conversely, if the primary bone of contention lies mainly between the owners of the hardware , we can negate the need for any delegated system— since there will always exist a central point of failure.
Also worth mentioning is the fact that when considering different systems, we can quite easily pile on additional layers like many delegates.
PoS vs PoW: The Security And Speed Side Of Things
From a purely objective standpoint, we can see that both PoW and PoS have certain advantages over each other. However, ultimately the decision lies on the user since PoS and PoW both have their edges when it comes to things like speed and security.
For PoW , we can see that the protocol is largely based on an objective consensus— which means that a new node also has the ability to arrive at the same current state as the rest of the network on the basis of the network’s existing protocol rules.
In the case of PoS, it can be seen that the system is not entirely objective based. Infact, one can even go as far as saying that the algorithm is ‘weakly subjective’– since individual nodes need a recent state in addition to protocol rules so as to “independently determine the current state of the system”.
So.. What Are The Arguments That Can Be Made Against PoW?
To start off with, most haters are quick to point out that PoW is quite energy intensive. However, while that may be the case when it comes to cryptocurrencies, if we were to compare the operational infrastructure of Bitcoin with Gold (the yellow precious metal), we can see that BTC in fact uses 10% less electricity than its physical counterpart.
Another major issue with the PoW protocol is the possibility of DoS Attacks . For those not aware of what a DoS attack really is, it is a third-party intrusion that aims to disrupt the regular functionality of a network by flooding its nodes with requests.
Lastly, PoW is also susceptible to Sybil Attacks — wherein an intruder looks to mess up a network by forcing a large number of nodes to malfunction simultaneously.
The Downsides Of Using PoS
When talking about the PoW framework, we can see that the system is divided uniformly amongst different groups of participants such as miners, developers and other crucial members of the community. However, when looking at the PoS setup, we can see that network stakeholders have the power to make any changes that they may see fit. As a result of this, the issue of centralization starts to become more and more apparent since the entire scheme seems to go against the core values of a distributed ledger-based cryptocurrency.
PoS And PoW: Do 51% Attacks Play A Major Role ?
Simply put, the PoS protocol is much better at preventing 51% attacks, however, that does not mean that the algorithm does not come with its own fair share of risks. In this regard, it is worth remembering that one particular kind of attack that can be easily executed within a PoS based network is a ‘Bribe attack’.
With that being said, it should also be pointed out that PoS enables the development of faster consensus algorithms— since the scalability aspect of the protocol is amazing (as well as its tps rate being very high).
Which One Of The Two Is More Secure?
On paper, there is no doubt that PoW is the more secure consensus mechanism of the two. However, security is not the only criteria when comparing consensus protocols — since other factors such as speed, efficiency too play a massive part in their evaluation.
In terms of native operational efficiency and overall network speed, the PoS algorithm seems to edge past PoW slightly. To further elaborate on the efficiency of the PoS algorithm, we can take into consideration the example of QTUM, a protocol that is live, decentralized, permissionless and currently has more than 5,000 active nodes spread across 3 continents.