Despite its rapidly growing adoption rate, it is important to remember that blockchain technology is still in its infancy. Operating as a peer-to-peer network on top of the internet, blockchain was initially introduced in October 2008 as part of a Bitcoin proposal, which was eventually accepted and became the bedrock of the world's leading cryptocurrency.

Since then, the technology has gone through numerous iterations as developers pursue the ideal balance of security, decentralization, and scalability. Of course, anyone familiar with the blockchain/cryptocurrency sector is aware that the two dominant blockchain consensus mechanisms that strive to achieve this balance are referred to as proof of work and proof of stake.

Blockchain consensus mechanisms explained

In short, a blockchain consensus mechanism is designed to validate transactions on the network. A consensus mechanism's fundamental purpose is to prevent bad actors from intentionally cheating, manipulating, or harming the blockchain in any capacity. To do this, network participants must be able to identify and agree on a "truth" when the blockchain receives data from multiple independent nodes.

Proof of work (PoW), which is utilized by projects such as Bitcoin, Ethereum, and Dogecoin, requires network users to invest effort into solving an arbitrary mathematical puzzle (mining) to prevent users from manipulating the system. As a result, PoW demands tremendous computational work in order to participate in the network.

Proof of Stake (PoS), on the other hand, is utilized by projects such as Solana and Cardano to support a system in which validators are chosen based on the number of tokens they "stake" on the blockchain. Stakers must commit to locking up these tokens in order to earn a passive income. Subsequently, the validators' stacked tokens are used to validate new cryptocurrency transactions.

However, the issue with each of these mechanisms, as well as the platforms that they fuel, is that they sacrifice at least one of the fundamental features that blockchains must aim for: security, decentralization, and scalability.

What is Proof of Time (PoT)

Proof of Time is a new blockchain consensus mechanism developed by Victor Young, founder of Analog. PoT offers a welcome alternative to the PoW and PoS mechanisms, as it looks to overcome many of the long-standing issues prevalent throughout these systems.

In short, PoT algorithms function by selecting network validators according to their "ranking scores" and fixed stake. A ranking score is a numerical weighting attributed to each validator based on the accuracy of how they confirmed historical event data, as well as the experience other validators have had with this particular node. You could think of this as a form of decentralized social proof that confirms the quality (trustworthiness) of each validator. 

The fixed stake component of the Proof Of Time mechanism is a staking system where all validators must commit an equal amount of tokens, which in this case would be $ANLOG tokens. In contrast to typical PoS mechanisms that skew consensus voting power based on the number of tokens held, PoT operates with a fair model that allows any node to participate as a validator as long as they hold the requisite number of $ANLOG tokens (and ranking score).

The PoT mechanism itself involves a two-step process referred to as soft and hard voting. The soft voting aspect involves a validator (time elector) proposing a block to be introduced onto the "Timechain," which is Analog's event-based ledger. Even though any node can propose a new block to the blockchain, a single-time elector will be selected through a randomized process that incorporates a verifiable delay function (VDF) based on its ranking score and fixed stake. 

The hard voting phase involves a committee of 1,000-time nodes (all of which are selected by a VDF) that determine whether or not a transaction is valid. This process is where the bad actors are weeded out, such as double spenders or other forms of manipulators. Once the proposed block is determined as valid by the committee by securing more than two-thirds of the votes (667 of 1000), it is submitted to the Timechain.

Why is Proof Of Time necessary?

As mentioned, the typical blockchain consensus mechanisms, PoS and PoW, are fundamentally flawed, and proof-of-time looks to solve these issues. First of all, decentralization is the number one factor that most blockchain projects strive towards. This means developing a system that is fully transparent (publicly accessible) and immutable. However, PoS fails to achieve a truly decentralized consensus since only validators with large quantities of the token will be able to get an opportunity to update the ledger. 

With PoT, all nodes have a fair chance of being selected to validate time data and participate in the consensus process on the Timechain. This is also a marked improvement over PoW systems that indirectly prevent a significant portion of users from validating the network due to the necessity to invest computationally-intensive resources to mine blocks.

Secondly, unlike proof-of-work (PoW) or proof-of-stake (PoS), which are generally slow due to lengthy block waiting times, PoT is scalable and super fast. It leverages a novel verifiable delay function to minimize confirmation delays. As such, the network has a higher throughput and offers vastly superior scalability compared to other mechanisms. 

From a security standpoint, PoS and Pow systems have inherent weaknesses since a large proportion of nodes can be brought up to wales and large investors, whether it be through staked tokens or mining hardware.

PoTs provide an ideal answer to this problem since they do not give any meaningful favor to large token holders and instead rely on ranking scores and fixed stakes. As a result, any user with a fixed stake and a ranking score on the network can propose and confirm blocks, which creates a truly decentralized public ledger.

Final word

While the proof-of-work and proof-of-stake blockchain consensus mechanisms have functioned well, there is no denying that a new system needs to be implemented that facilitates true interoperability, scalability, and decentralization. Analog's proof-of-time has been built from the ground up with this in mind and looks set to provide completely trustless and secure omnichain communication, which will likely find a plethora of use cases across many of the industry's sub-sectors.