A Dynamic Stake Consensus Algorithm launched by Penta Global Foundation
Penta Global Foundation has found a way to bypass one of the biggest problems of blockchain platforms, and allow them to keep decentralization without sacrificing scalability, and vice versa. Through the new Dynamic Stake Consensus Algorithm, Penta will return the power to the community, while at the same time it won’t have to give up on the speed of validation of the transaction process.
The Potential Of Blockchain Technology
As you may know, blockchain technology is more than just technology. Another, pretty large part of it also includes social ecosystems, where users can exchange various things via P2P transactions. Best of all, those transactions are confirmed and validated by the community itself, with no need for banks or financial institutions. This is one of the blockchains' greatest features, and it established trust between the community members.
Today CMO Stephane was invited to attend an offline meetup ‘Demo Day’ in Beijing China, together with Ultrain & U Network. Meanwhile Penta’s DSC (Dynamic Stake Consensus) algorithm caused a sensation among people who paid much attention to the public blockchain technology. pic.twitter.com/prxBVleo49
— Penta GF (@Penta_GF) March 30, 2018
All of the transactions are verified by the community, which acts as the third party that would ensure the fairness of the transaction. The blockchain provides a public ledger that will record all of the histories regarding these transactions, which ultimately leads to a complete decentralization of the process.
Of course, this process is far more complicated than it sounds, and in order to achieve this type of ecosystem, that would be capable of sustaining itself, the users need to be encouraged to participate. This is the part that makes use of various cryptos, like Ethereum or Bitcoin. That way, participants would be rewarded for their contribution, which will ensure that they do their part of the job.
This is also the part where incentive structures come in. They are better known as consensus algorithms, and are being programmed into the blockchains directly. Their main purpose is to offer rewards that would inspire users to participate in the validation process, and help the ecosystem grow and develop. Simultaneously, they are creating an incentive allocation system that is both fair, and well-balanced, so that everyone included can benefit from them. This is still just a concept, however, and no platform has managed to successfully achieve this.
Penta Global Foundation
When it comes to Penta, it is, first and foremost, a public blockchain project. Its main purpose is to combine an app platform of high performance with the infrastructure of the blockchain. The final goal is pretty simple, and it would provide users to access dApps from the blockchain, just like a smartphone user can access applications on the App Store. Basically, what Penta does is establishing the connection between the real world and the blockchain.
Penta's creation came as a reaction to various blockchain projects that do not follow the idea of decentralized networks including equitable incentive structures, or low entry barriers. Basically, the desire was to have the members of the community in charge of validation regarding the transactions, where each process would be fairly ‘judged'. This came as an opposition to the regular form of business, where large and expensive projects would suffer losses or fail completely, with the investors being the ones to pay all the bills, while those in charge pocketed the money.
It comes as a system based on proper values, where the platform will be entirely decentralized, and have an incentive structure that can be deemed fair to all. A lot of other platforms are avoiding this, and would much rather sacrifice decentralization for the benefit of larger scalability. However, with decentralization, the platform would also lose fairness, because where there is money, there are also those looking to get as much as possible, with little regard to who is getting damaged in the process.
It is understandable why scalability is so appreciated in today's world. After all, cryptos like BTC can only process around 7 transactions each second. Large companies like Visa, for example, or Mastercard, have the ability to increase that number to up to 30,000. Alibaba is even more powerful, and can do more than 100,000 transactions each second. Decentralization makes the process fair, but also slows it down a lot.
By increasing scalability, a lot of platforms would put all the decision-making into the hands of the chosen few, instead of the entire community. Sure, this speeds up the process, but it also takes away the decentralization. Basically, the history is only repeating itself, and the power once again goes to a chosen few. This is the main issue that Penta is trying to tackle.
Simply put, Penta wishes to increase the economic inclusion when it comes to the blockchain technology. This can be achieved through the process of reducing the entry barriers, as well as increasing the community members' opportunities regarding sharing the funds. Basically, in an attempt to keep both scalability and total decentralization, Penta has managed to create DSC (Dynamic Stake Consensus), which is a completely new type of consensus algorithm.
DSC has proven to be capable of increasing scalability without the need to reduce the fairness, or the inclusion. This is an entirely new randomization algorithm which can select different users to join in on the validation process, and provide them with various rewards, depending on how many tokens the user has stacked in the Penta's system.
That way, the user is motivated to stay honest, since they will lose their stake, which would return to the community. This does not mean that fair voters' stake will have any type of power over the process, nor will they be able to influence it in an additional way. The rich and the poor will only get one vote, and that is it. This is what makes this system truly inclusive and fair, with no additional rewards to those who hold more.
Consensus algorithms like this might seem like something from the far future, or even impossible to achieve. However, they are possible, and are also deemed necessary in order for platforms to keep their decentralization, while they increase the scalability at the same time. In the end, it is up to the community to help reach true fairness that decentralization carry, which would ultimately serve the people, instead of corporations or banks. The participation of the community is the only way to achieve complete fairness and transparency, which is the very point of blockchain and this new type of digital economy.