A decentralized network such as a blockchain blockchain requires rules and processes so that multiple nodes can reach an agreement on the true state of the network. These sets of rules and processes are called consensus algorithms.
Even though though many different consensus algorithms have been devised for various blockchain networks, proof-of-work and proof-of-stake variations remain the most widely used mechanisms for reaching consensus.
In this article, we will be tackling a more obscure type of consensus algorithm, and briefly explain the concept of proof-of-weight.
A Combination of What Different Consensus Mechanisms Have to Offer
Proof-of-weight consensus mechanisms are based on the Algorand consensus model, developed by researchers at the MIT Computer Science & Artificial Intelligence Laboratory. The Algorand protocol facilitates very quick transactions by relying on a Byzantine agreement protocol, which also makes it capable of scaling to many users.
In a network utilizing proof-of-weight, weighted users play an integral role in the process of achieving consensus. Every user is assigned a certain “weight”, which is relative to a selected value that represents a user’s contribution to the network. In order to prevent double-spending attacks and other foul play on the blockchain, the majority (more than two thirds) of the weighted fraction has to belong to honest users.
Difference Between Proof-of-Weight and Proof-of-Stake
At first glance the proof-of-weight might seem very similar to the proof-of-stake consensus algorithm, but when taking a more detailed look, we can notice a key difference. In a proof-of-stake network, it is the number of coins held in the wallet that determines the “weight” of the user and subsequently the likelihood for the user to receive the block reward.
In a Proof-of-Weight consensus mechanism, however, any value, not just the amount of coins held, can be used to determine the “weight” of a user. On the Filecoin (FIL) blockchain, for example, the amount of IPFS data that a user is storing is used as the weighted value.
Very Customizable, Super-Scalable, but Incentivization Remains a Problem
The proof-of-weight consensus mechanism is highly customizable and capable of scaling to a great number of users. The developers can adapt the basic algorithm so that it enables the creation of committees. A committee consists of random network users, whose job is to run a certain step of the consensus protocol.
The committee structure introduces some level of centralization, while still maintaining a secure and overall decentralized network. Despite all the pros of proof-of-weight, it proved to be very challenging to get users excited about this model due to a lack of incentivization, as the protocol does not reward its users for running a node and confirming transactions.