What Is Proof-of-History (PoH)?
Proof-of-History (PoH) is a method utilized by Solana to incorporate time into the blockchain, aiming to enhance network efficiency and reduce the burden on network nodes during block processing.
In traditional blockchains, achieving consensus on block timestamps is as crucial as reaching consensus on the transactions within those blocks.
Timestamping enables the network and observers to determine the order of transactions.
Revolutionizing Consensus
In a Proof-of-Work (PoW) scenario, the successful miner is the first to find the correct nonce, which requires significant computational power.
Proof-of-History (PoH) employs Verifiable Delay Functions (VDFs) instead.
VDFs can be solved by a single CPU core performing a specific sequence of steps.
Since parallel processing is not allowed, the time required for each step is easily determinable.
Benefits
- Low Fee: Solana offers lower transaction fees than other networks like Ethereum, making it an attractive option for frequent transactions and money transfers.
- Scalability: Transactions on the Solana network are fast, resulting in increased scalability for the overall network.
Drawbacks
- Validator Count: Solana currently has fewer than 1,200 validators responsible for validating transactions on the network.
- dApp Development: While Solana is sometimes regarded as an Ethereum competitor, it has fewer dApps on its network.
Proof-of-History (PoH) and Proof-of-Stake (PoS)
Proof-of-History and Proof-of-Stake share similarities, as Proof-of-History evolved from Proof-of-Stake.
Both algorithms rely on validators to validate transactions and create new blocks.
However, the significant difference lies in how time is calculated.
Proof-of-Stake utilizes a timestamp function, where each node relies on the network’s timestamp, resulting in slower network operation as time must flow through the network first.
On the other hand, proof-of-History employs a Verifiable Delay Function (VDF) to calculate time based on historical events.
These events are transformed into a hash that anyone can verify.
Each block in the network includes this hash, and determining time takes minimal time, making the Solana blockchain highly scalable.
Potential Issues with Proof-of-History (PoH)
Proof-of-History is a consensus mechanism derived from Proof-of-Stake but with a distinct method of time calculation using historical events.
These events are transformed into an unforgeable hash based on previous events.
Solana is currently the only blockchain utilizing the Proof-of-History algorithm, making it highly scalable, capable of processing up to 60,000 transactions per second.
However, as PoH has not been widely tested, its flawless functionality remains uncertain.