(Original posted https://signum.community/proof-of-capacity/, reposted with permission)
Classic Proof-of-capacity is a consensus mechanism that ensures a party has dedicated an amount of storage space toward network security. The first blockchain to use classic proof-of-capacity, Signum continues to use it as the foundation for its upgraded consensus algorithm, proof-of-commitment.
Proof-of-commitment decentralizes verification of transactions and generation of blocks. Disk capacity is filled with plot files containing hard to compute Shabal-256 hash results. Each mining round, deadlines are computed using this data. The best deadline submitted to the network earns the right to forge the next block and collect the associated block reward. A larger capacity gives a better chance of submitting the best deadline.
Proof-of-commitment has a parallel in proof-of-work in that the plotting process it uses to decentralize its network, distribute consensus, and prevent manipulation of its distributed ledger uses resource-intensive hash functions. Beyond that parallel, the algorithms are fundamentally different. Proof-of-work systems calculate hash functions in real-time and discard them after each block. With Proof-of-capacity systems, hash functions are pre-computed, written to storage, and retrievable for reuse in the mining process indefinitely.
Because the hash functions are pre-computed and stored, there is no need to make them in real-time. As a result, proof-of-capacity systems use very little energy, just enough to run a background program that reads through a small subset of stored plot files, calculates deadlines for those selected each round, and submits the best result to the network. The more resource-intensive calculating process is only undertaken when a miner desires to increase their plotted capacity.
Proof-of-commitment was designed to protect the Signum network from consequences that stem from its commitment to open-source software, a type of software released under a license that allows users the right to use, study, change, and distribute it to anyone for any purpose.
It is said that “imitation is the greatest form of flattery.” In the many years since its founding in 2014, copies of the Signum Network have proliferated — not the basic concept or a specific part of its innovative code, but the entire network, everything from its account structure to the format of its plot files. While many of these projects are already in a state of collapse due to their lack of further development, their existence and the potential for additional proliferation presented a complex problem for Signum’s classic algorithm –how could the network be protected from the capacity of copy-cat projects co-mining on the Signum Network with no commitment to the project.
The answer was proof-of-commitment, the classic proof-of-capacity algorithm combined with an element of proof-of-stake.
Proof-of-commitment effectively multiplies physical storage capacity linearly based on the amount of stake a miner sets aside for this purpose. Rather than a predefined stake level, benefits are based on the network’s average stake per terabyte. The average must be committed to maintain a one-to-one ratio between physical and effective capacity. When the amount committed is above or below the average, staking benefits are applied statistically, proportionally raising or lowering calculated deadlines as they are submitted to the network. ( See also: https://signum.community/signum-mining/#commitment )
Although proof-of-commitment was born out of necessity for Signum, it enhances the Signum network’s already impressive environmental sustainability profile by expanding the methods available for mining so that more people can participate on terms that better suit their circumstances related to hardware requirements. With small miners able to effectively multiply their capacity, the elusive system of consensus-based, self-regulating, enforced moderation and decentralization has been achieved.
Note: Consistent with Signum’s environmental ethic, these changes were made in a way that preserved the use of existing plot files.
Signum was founded as an alternative to the waste of energy in proof-of-work systems and the lack of fairness in the initial distribution of proof-of-stake coins. Although it is necessary to use the terminology of proof-of-stake for the sake of comparison, Signum is not primarily a proof-of-stake platform.
