Mining is not needed. Key cryptocurrencies without PoW
1800 is the number of items of cryptocurrencies, according CoinMarcetCap existed in the field of digital economy at the beginning of August of 2018, and only about 730 projects use a consensus algorithm Proof-of-Work for new blocks in the blockchain. More than a thousand cryptocurrencies based on PoW alternative protocols and do not require hashing is quite costly from the standpoint of performance and consumption process.
Thanks to the introduction of other algorithms without having proof of work, many companies are cutting costs for their investors and thus attracting more users worldwide. The availability of activities and the relative simplicity without mining are among the major criteria for many crypto projects that rely on the experience and development of existing teams. We have collected the most well-known cryptocurrency that don’t need mine, because they are good without PoW, and to capitalize on them.
The title of pioneer we can safely award the Ripple — known canadian-American project, the capitalization of which is more than $16 billion. The predecessor of the payment Protocol called Ripplepay was developed in 2004 by Ryan Fugger and prednaznachalas to create the coins and make fast and safe money transfer online. A few years Fugger in a team with programmers by Arthur Britto and David Schwartz revised the concept of the network and started to design new electronic systems, which can be used to complete transactions and confirm them with consensus of the users in the network, and not mining as in bitcoin. The project, which for its functioning required less than bitcoin, has gained popularity: by the end of 2017, the XRP coin has become the most profitable and showed a yield of 34,000%.
Ripple uses its own tamper-proof algorithm RPCA — Ripple Protocol Consensus Algorithm that works on the principle of simple transfer Protocol SMTP (Simple Mail Transfer Protocol). It connects the peer node and allows you to exchange Fiat currency or cryptocurrency with a token XRP, each of which is divided into “drop” — drops — a million particles.
Thanks to the fast transaction — 4 seconds per transfer (Ethereum, for example, takes 2 minutes), and low commissions, the first project without mining attracted the attention of banks that have started to introduce the platform in their activities. OpenCoin is the name of the Corporation, which includes Ripple — 2017 announced that the famous financial group American Express and Santander intend to use the Ripple Protocol for transatlantic payments between the US and UK, and some South Korean and Japanese banks to conduct cross-border transfers.
“Killer” Ripple on its own Protocol
The case of the first bezmalinovic currency, despite its advantages, was not smooth. Payment system Ripple, started to be criticized. Analysts pointed to weaknesses in the management actions of the project that managed the network. “I believe that XRP is a fully centralized, controlled by some system that looks like a pyramid… distributed Bitcoin mathematics. XRP is distributed three guys at the behest of their whims”, users on the bitcoin forum.
These suspicions of the inhabitants were confirmed that in fact, Ripple Labs still is a commercial firm with a constant group of developers who pursue only their own benefit, because all currency belongs to the Corporation. The code for a long time remained closed, it does not allow users to monitor network changes. After the manifestation of discontent crypto-community code is made open. Thanks to this the opportunity to organize the fork to eliminate all bugs and disadvantages. After 10 months in 2014, Ripple co-founder jed McCaleb after the sale of its share (9 billion XRP) in the Ripple and developed by Joyce Kim has established an extensive network from the main project Stellar, which was nicknamed a “killer” of the main system.
After the appearance of the platform’s Stellar rate of XRP has dropped by 40%, even though the coin belonged to stabilium and in fact does not fall in price. The project immediately made a Stellar consensus Protocol Consensus Protocol (SCP), open source, and in which servers perform the implementation of actions and form a global network consisting of other system servers. On each server, the provision of data transmission records of all transactions and accounts online. A new Protocol has helped to introduce the concept of integrated Byzantine Treaty (FBA) is a unique approach to the organization of the consensus algorithm, in which SCP is the first example of work. Recall that a BFT allows the validator to make a quick transaction to manage each state of the network and exchange messages with each other to get the correct recording of transactions to ensure the fairness. In Stellar anyone can be a validator, a trust established by the community. Unlike the block chain based on PoW, blackany BFT are not attacked, if only the users of the network do not coordinate the attack. BFT is considered the best algorithm because it is scalable and covers transactions with a low cost. Network founder jed McCaleb in 2015 at the time stated that the Protocol and the associated technical paper will be required to provide analytical support for the new system and to explain to the people the new technology to ensure decentralized scalability.
Device Stellar Consensus Protocol (SCP). .
“From the beginning we tried to develop a Protocol that would be able to cover hundreds of millions of accounts and thousands of transactions. Stellar Foundation hopes to use a new consensus Protocol as a mechanism by which all will be able to access the global payment channels,” McCaleb a few years ago, and now this type of Protocol has worked well without mining.
At the moment the platform with his Stellar cryptocurrency Lumens (XLM) is one of the most successful projects of the industry that competes with another site — Ethereum, and is consistently in in capitalization and popularity among users, in particular, the manufacturing sector and business. For example, the African non-profit organization Praekelt, dealing with the problems of poor people, intends to integrate Stellar into Vumi app that will allow you to send messages to an open source and thus save on communication in Africa South of the Sahara. And in Nigeria with cloud computing and banking security company Oradian plans to use the Stellar network to connect microfinance institutions that will help small businesses.
IOTA and the blockchain 3.0
During the development of bitcoin developers began to find shortcomings of the algorithm of consensus PoW and look for new ways of organizing the blockchain. Blocks in the system, which is based on the proof-of-work, cannot be created in parallel, because the knitted structure allows only one chain of the network in order not to commit double spending, and double spending. Miners compete with each other, always want to quickly verify the transaction and receive his reward for the work done. Thus, each new block is created every 10 minutes. This is a very long and unprofitable, therefore, introduced a new directed graph with a topological sort of a DAG — Directed Acyclic Graph. Likely platform for this technology will win the title of the blockchain 3.0. The development graph can only go in one direction — from the early to the late blocks. A similar system is used in navigation, data compression and processing large files.
The structure of the DAG, where each unit has its significance: different transactions run simultaneously on different blocks.
Due to the fact that each unit in the system is equal, the DAG network chooses a later transaction with which to associate the new transaction. The point is to keep the width of the network within certain limits, providing a quick check. This algorithm is intended first to apply the developers of the NXT platform, which is designed to run decentralized applications. Today, IoT projects Chain (ITC), IOTA and Byteball blockchain instead of actively using a directed graph with a topological sort. For example, the most popular of this category currency IOTA analyze the function and advantages of the DAG.
Project IOTA was founded in 2016 by a group of developers with David Senstive, Sergei Ivancioglo, Dominic Shiner and a doctor of philosophy in mathematics Sergey Popov. The team set a goal to revise and improve the blockchain in order to make it easier to use cryptocurrencies, the Internet of things. Using the DAG, which is called “tangle”, “tangle” project IOTA was able to achieve conducting small transactions without a fee, although in other systems for Proof-of-Work small payments is very expensive, so be unprofitable. DAG network no miners, because all confirmations and accuracy of the transaction held within them, and therefore, the speed of payments increased many times compared to bitcoin or ether. Due to the ease of doing business based on the IOTA platform was opened , which come from third-party sensors. Thus the researchers want to monetize a market volume of 2.5 trillion daily generating byte of data with exponential growth. The project involved more than twenty global organizations including Deutsche Telekom, Bosch, Microsoft. Beskonechnye micropayments are processed by the IOTA Protocol and record of measuring local environmental parameters, the data of African agriculture and anonymous data from wearable medical devices that will undoubtedly help to improve life in this behind the world economy the region.
EOS like Kardashian
Another system that uses the PoW algorithm and does not require mining — EOS.IO. The blockchain operates as a decentralized platform and supports smart contracts on the basis of which you can create your own projects. In fact, this project is one of the main competitors of Ethereum. Only the project Vitalik Buterin is based on PoW (soon will switch to Proof-of-Stake), and the EOS uses a more modern algorithm consensus-Delegated-Proof-of-Stake (DPoS), which delegates the confirmation of delegates and thereby checks the transaction and provides a “technological democracy.” The DPoS algorithm is divided into two parts, first choose the group of producers of components and scheduling production. This makes it possible to ensure that all delegated parties — the holders of shares of that control process. The second part is to confirm the share. With stable activities of producers units alternately, each in their own time, create a block every three seconds. If no one will miss their turn, then the result is a long chain.
The scheme of action delegates. The level of security is achieved by algorithms of choice of manufacturers of blocks and check the high quality of nod and individuality of the owner. Through the process of approval voting ensures that even someone with 50% of active power to vote cannot select a alone even the same manufacturer.
It is important to note that due to the DPoS consensus, users do not compete with each other and not waiting for the need to validate the transaction. So every three seconds the EOS blockchain generates new units, it would identify 21 suitable candidate — the most important validators with large sums in your wallet, which are shuffled and provide a balanced relationship with other manufacturers. In addition, EOS may not be forks of the branches network, this is achieved through the functions of the software TaPoS transactions as proof of stake, where all required transaction hash of the last header block. With this it is possible to eliminate the repetition of transactions in different blockchains to prevent fraud among validators.
But despite all the advantages bezmalinovic approach community EOS criticized for its centralization and called the “blockchain dictator”. At the end of June 2018 the company Block.one that will use your tokens — 10% of total network project — in voting for the manufacturers of power that control the EOS on the basis of the DPoS consensus algorithm. This aroused suspicion, and mass dissatisfaction with the fact that all transactions will be tailored to the desires of the project. After this statement, the founder of the Ethereum wallet — Mycrypto — Taylor Monaghan in his wrote a funny post about the EOS, which compared the project with well-known media company.
“EOS is very similar to the Kardashian family 💁💄
- You either love them or passionately hate;
- Too cultivated;
- Watching them is a guilty pleasure of normal people;
- More money than sense;
- You never know what’s really going on;
- Drama is so pure, palpable and infinite that you can’t look away”.
Without hashing and without blockchain. Prospects of development
Project developers don’t stop improving the system and propose new solutions achieving a perfect process that will take a little time and do not require large amounts of energy. One such technology is Hedera Hashgraph where Hedera is a distributed registry, and Hashgraph — the algorithm distributed consensus. This project was created and patented the researcher lemon Baird, at the moment the network is in the final stages of drafting. The system is based on a distributed registry with guaranteed asynchronous tolerance to inexplicable errors BFT (“Byzantine generals problem”) and relies on a directed acyclic graph DAG as a project IOTA. Only in the case Hashgraph Gossip Protocol is used, and in contrast to the DLT — Distributed Ledger Technology — the distributed Ledger blockchain, the project has a high throughput in the tens of thousands of transactions per second. The validity of the transaction is proved using mathematical consensus-based timestamps. This allows you to use Hashdraph in decentralized systems with intense performance and maximum protection. All branches in Hashgraph move in parallel, so they develop and are formed to the maximum values, any node can stop the process, unlike bitcoin.
Data flow Hashgraph consists of circles and lines — nodes, where each node has its own peak. The circle represents the event where one of the network nodes communicates with another, each event associated with last on top. Therefore, the whole graph consists of the history of how the network nodes communicate with each other. This Protocol called “gossip about gossip”.
Hedera Hashgraph other projects (NEO in the BFT Protocol, the Cardano algorithm Ouroboros and the above network) show its effectiveness. They are an example of what mining algorithm Proof-of-Work is gradually becoming irrelevant and unprofitable from the point of view of productivity and earnings. According to Dutch economist Alex de Veers, as of may 2018, the mining of bitcoin consumes 0.5% of global electricity production that can be equated to the electricity consumption of a small European country. In addition, there are disparities between early and late miners that arises from the time scale and the time of entry into the system. For example, the issue of bitcoin give more advantages to those users who started mining early, that there is an imbalance, experienced players get more than the newcomers, who have so small amount in the wallet. Therefore, the development of alternative methods of obtaining coins, the invention of new algorithms and systems will improve the crypto industry, bring it to a new level and to attract more people who will receive high profits for their activities within the system.