Although many popular blockchains like Ethereum are moving from Proof-of-Work (PoW) to Proof-of-Stake (PoS) systems, the Nervos Network remains firm on using the PoW, stating that it is much more secure and understandable while it unveils its NC-Max, a zero-compromise consensus solution, in a Twitter thread published by the network on Saturday, October 8, 2022.
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Proof of Stake (PoS) is framed as a contender to #PoW. The stated advantage of #PoS is that it requires substantially less electricity to operate, however PoW offers several benefits over PoS 👇 pic.twitter.com/aQMX5NNSsl— Nervos.bit (@NervosNetwork) October 8, 2022
The PoW and PoS systems are used to validate transactions on different blockchains, and transaction validators on the networks are rewarded with minted tokens.
Nervos stated that the PoW system offers several advantages over PoS even though it requires a lesser amount of energy to operate as it consumes 2.62 megawatts on a continuing basis, as against 5.13 megawatts in PoS.
Nervos stated that long-term monopoly by PoW miners is impossible as it is subject to changes in regulation, energy production, and technology that justify continuous reinvestment by miners to stay on top of the game, unlike PoS, where miners are rewarded based on how much they staked.
They also noted that the PoS system doesn’t leave much room for new entrants to compete with early participants because rewards are given deterministically.
Additionally, they stated that the PoW is simpler and requires fewer assumptions, meaning the potential for security vulnerabilities is far less.
Nervos NC-Max
The Nervos NC-MAX was built based on Bitcoin’s Nakamoto Consensus, which has defended Bitcoin from multiple attacks. It was designed to improve block propagation and throughput and prevent selfish mining.
Selfish mining is a practice whereby some miners secretly get a larger share of mining rewards while contributing less hash power to the network. It weakens the overall network security.
To improve block propagation, Nervos NC-Max split the transaction confirmation process into two steps: Propose and commit. A transaction is first proposed to the network and confirmed after several blocks have been verified. This gives more time for a transaction to propagate without slowing block propagation.
The NC-Max also improves block throughput by automatically adjusting block intervals based on network performance. Additionally, it prevents selfish minting as it takes note of miners’ actions.
