Is this new consensus protocol family better than PoW?

Leo Zhang

By Leo Zhang

Technical Updates

Snowflake to Avalanche: A novel metastable consensus protocol family for cryptocurrencies

Cornell professor unveils 'simple yet powerful' consensus protocols
(CoinDesk, by Nikhilesh De)

"Nakamoto consensus protocols (of which bitcoin is the best known) require miners to agree to a specific decision before it can be enacted, while classical consensus requires a two-thirds plus one majority, Sirer said during his talk."

Opposite view on the new consensus protocols

Discussion on Hacker News

"Initial reactions:

  1. Sybil-resistance (faking strong consensus by deploying cheap replica nodes you control) in a protocol like this is crucial. All I could find is this:

To prevent Sybil attacks, it uses a mechanism like proof-of-stake that assigns weights to participants in committee selection based on the money in their accounts.

  1. Every non-proof-of-work protocol I've seen, including Ripple Consensus Process and proof-of-stake creates a problem of initial coin distribution. PoW systems have a clean distribution mechanism based on external resource consumption. Non-PoW systems produce an airdrop situation. Players start with no funds, and so can't stake. The creator of the network manually assigns ownership, with important long-term political consequences (e.g., Ripple).

  2. The lack of an incentive structure around fees in protocols like Ripple creates bizarre economic consequences. For example, Ripple is guaranteed to lose money stock because fees are simply burned, rather than given to the consensus leader as in Bitcoin.

  3. So far, I haven't seen anything in the paper regarding denial of service attacks on nodes. In other words, I see no negative incentives levied on those who can sign transactions from flooding the network with useless spam, bogging everything down."

Jackson Palmer comments on energy-efficiency of PoW mining

It has been a bad week for encrypted messaging and it’s only Wednesday
(arsTechnica, by Dan Goodin)

"It’s harder to draw actionable takeaways from the Signal and Telegram threats. One possible conclusion is that it’s probably safer to run these apps on mobile devices, because those platforms have application sandboxing that prevents them from interacting with as many resources as their desktop counterparts. The truly paranoid should consider forgoing the convenience of these desktop versions or, at a minimum, manually wiping the most-sensitive messages from hard drives as soon as practical."

News & Commentary

Buyer beware: hundreds of Bitcoin wannabes show hallmarks of fraud
(WSJ, by Shane Shifflett and Coulter Jones)

"In a review of documents produced for 1,450 digital coin offerings, The Wall Street Journal has found 271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams."

Reflection on the Consensus Conference

Bitfinex starts sharing customer tax data with authorities
(Bitcoin.com, by Kai Sedgwick)

"Up until a few months ago, Bitfinex didn’t even enforce basic KYC for its users. It’s now gone from being one of the laxest major exchanges to one of the most regimented, with a tax sharing policy that surpasses anything enacted by the likes of Coinbase or Bittrex."

Nomura becomes first crypto custody bank
(The Trade, by Joe Parsons)

"The Japanese bank has partnered with Ledger, a security and infrastructure provider for cryptocurrencies, and Global Advisors, a bitcoin-specialist investment manager, through a new venture called Komainu."