Tolar Introduction

Blockchain as a distributed ledger technology allows many computers to agree on a single version of events, without any center of control to the system.

This is a powerful concept as there is no one place to attack or disrupt. It provides certainty of data integrity, and trust in the transactions conducted using it. Unfortunately, it has major drawbacks - it does not scale very well and not a very effective way to consent to the events.

Applications that can be built using blockchain technology have broadened and so technical limitations have become clear. Specifically the block size limit, which means the maximum throughput a blockchain can cope with is around 7 to 20 transactions per second for Bitcoin and ETH respectively. If you compare that to Visa, which is 2,000 transactions per second, blockchain is clearly not ready for mainstream applications.

Tolar is an efficient and effective alternative to current existing blockchain projects.

It has been the result of 3 years of research /development and facilitation from COTRUGLI Business School leading to development of Tolar HashNet consensus which uses 'redundancy reduced gossip' and 'virtual voting' on direct acyclic graph (DAG) structure which helps to keep all positive characteristics of a blockchain technology while increasing throughput to more than 200,000 transactions per second.

Each member of the network has a copy of the HashNET - information structure that keeps record who propagated which event to whom, and in what sequence. These events are spread between HashNET members using gossip protocol and the validity of events is decided by voting.

So what is gossip protocol - It's a procedure of computer to computer communication (in blockchain terms node-to-node information sharing or transfer) that is based on the way social media disseminates information. You can think of it as an analogy of office staffs spreading the rumor. But what if the rumor is shared back to the person who already knows about it, will it not increase the workload on the network ?. For the purpose of reducing traffic or to ensure the information which receiver already has is not passed-on multiple times, Tolar will be adding a mechanism called "redundancy" which will allow nodes to communicate or pass on only the needed information which receiver has not received earlier.

For the purpose of consensus computation, every participating node in the network receives vote weightage based on tokens they have staked. The rewards for validating transactions are accordingly distributed based on weightage. This way of consensus computation follows Proof-of-Stake mechanism discipline, thereby eliminating the need for massive energy consumption (which is the case in PoW) making it immensely efficient and secure, without any significant compromise or centralizing.

In addition to the Proof-of-Stake based discipline, a reputation based system is also introduced as an additional control and verification mechanism. Nodes with malicious intent (or compute consensus incorrectly) are impacted by negative reputation score. If this score crosses the threshold limit, these nodes are then banned from the network for a specific amount of period which is decided by an algorithm called 'exponential backoff'.

To the challenges of massive energy consumption by PoW, today growing database (Bitcoin blockchain is currently about 160GB in size) puts significant storage costs on users wanting to run a full node. That database holds all the computations that need to be memorized by the computers supporting the platform and the bitcoin blockchain itself and with the costs of storing the state, increasing fewer and fewer people are choosing to run full nodes, which many worried will centralize the network into the hands of only a few arbitrators.

Tolar design of HashNET consensus and data storage manages to simultaneously handle security and versatility. It uses concepts such as Confidential Transactions and "One-Way Aggregate Signatures" (OWAS) which provides private exchanges and better adaptability requiring only a small fraction of storage size for saving blockchain transactions, so small that it can be stored in mobile making it possible for nodes to be run from mobile phones.