Proof of Reputation (PoR) Consensus
The Circular Consensus algorithm, known as Proof of Reputation (PoR), offers an efficient and straightforward method for achieving consensus within a blockchain network. PoR is designed to emulate human behavior in consensus-building, where individual credibility plays a crucial role in influencing votes.
Unlike Proof of Stake (PoS), which penalizes misbehavior by staked amounts, PoR relies on future earnings as a deterrent. PoS can be problematic if a malefactor steals an amount larger than the stake, and it has raised concerns about creating financial centralization, as only those who can afford the stake can operate a node.
In PoR, transaction fees are adjusted based on a reputation index ranging from 0 to 1. A fully reputable node (reputation=1 ) earns the entire transaction fee, while a less reputable node (e.g., with a reputation index of 0.5) earns a reduced fee:
earned fee = fee * reputation
Nodes enhance their reputation by consistently performing well and aligning with the majority consensus. Conversely, nodes lose reputation when they are in disagreement with the majority.
Each disagreement results in a decrease in reputation. When a node creates a new block, the first step is to broadcast it to the entire network. Upon receiving the block, all other nodes validate various aspects, including the sender's identity, the integrity of hashes, and the validity of transactions within the block.
Each node responds with a signed statement indicating either acceptance or rejection of the block. The initiating node collects these responses and compiles them into a report. If a node receives the block and agrees with its contents, it removes the block's transactions from its pending transaction list.
After broadcasting the final report to the network, the initiating node calculates the final response based on the responses received from other nodes.
This process ensures that consensus is reached efficiently and effectively within the Circular network.
The final outcome is determined by majority consensus. The report is then sent to all nodes that reported responses different from the final outcome to force the acceptance of the new block. At the reception of the Report, each node validates the response of every other node in the network through their signatures. In the basic implementation of this mechanism, every node is assigned a weight of 1.
In the Circular Consensus algorithm, nodes that consistently exhibit truthfulness and reliability gain stability and credibility. Conversely, nodes displaying divergent behaviors are flagged as suspicious, leading to a gradual decrease in their reputation and ultimately culminating in their exclusion from the network.
This consensus mechanism, combined with the ticketing system, offers a fork-proof blockchain while allowing parallel block minting on co-chains. By adopting the PoR, blockchain networks can achieve efficient consensus, maintain security, and establish a reliable reputation system for their nodes.
Flexibility & Programmability
One of the key features of Circular blockchains is its flexibility. The Circular stack offers native transaction formats, such as coins/Tokens, Non-Fungible Tokens (NFTs), Certificates, Signatures, and Smart Contracts. Additionally, developers add new transaction formats to the infrastructure. This flexibility enables Circular to support virtually any kind of application that doesn't need to be tied to a coin/token and due to its multi-chain feature support multiple native coins/tokens.
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