What Is the Obelisk Consensus Algorithm?
Obelisk is a blockchain consensus algorithm used by the Skycoin ecosystem, designed to eliminate the shortcomings of proof-of-work (PoW) and proof-of-stake (PoS) algorithms. According to its creators, Obelisk also reduces the need for mining, significantly improves transaction speed, and delivers enhanced security.
- Obelisk is the proprietary blockchain consensus algorithm of the Skycoin ecosystem.
- Obelisk attempts to address the issues with consensus mechanisms by distributing influence over a network, according to a concept called a “web-of-trust.”
- The Obelisk consensus uses separate nodes for consensus and block creation.
Understanding the Obelisk Consensus Algorithm
Blockchains operate globally as self-regulated, decentralized platforms without any single authority. Therefore, a real-time, reliable, and secure network mechanism is required to ensure the authenticity of the transactions occurring on the network and reach a consensus about the ledger's status. This task is performed by the consensus algorithm.
While the PoW and PoS systems are the two most commonly used consensus algorithms, they both have some drawbacks. For example, PoW is very energy-intensive, and PoS can promote cryptocurrency hoarding instead of spending.
Obelisk's Consensus Process
Obelisk attempts to circumvent the problems of PoW and PoS by distributing influence over the network, according to a concept called a “web-of-trust.” This concept uses various network nodes and makes consensus decisions depending upon the influence score each node creates.
In Obelisk, all nodes have a list of nodes that they are subscribed to. This creates node density. The nodes with the most density have more influence on the network.
In terms of roles and activities performed, there are two types of nodes that participate in Obelisk: block-generating nodes and consensus nodes. Nodes can take either role because they are interchangeable. Block-generating nodes collect new transactions, authenticate them, package the verified transactions in a new block, and broadcast the block to the network.
Consensus nodes collect the blocks generated by block-generating nodes and put them in a separate container (apart from the blockchain). It then identifies the block made by the largest number of block-generators. This block is called the local winner and qualifies to be added to the blockchain. Each consensus node maintains necessary statistics on local winners (as reported by other nodes).
When local winners have been reported by the majority of the consensus nodes, it qualifies as a global winner and remains a part of the blockchain. However, if nodes decide otherwise, then one of the following actions occurs based on the available data and local logs:
- The nodes re-synchronize with the network
- The nodes drop from participating in consensus or block-making
- The nodes keep their blockchains and request an emergency stop
How Is Obelisk Used?
Obelisk is used by the Skycoin ecosystem. Skycoin is designed and advertised as an alternative to centralized internet control. The intent behind the project is for consumers to control the internet by purchasing or building Skyminer machines to run Skywire—the Internet Service Provider (ISP) alternative—from their homes.
The Skywire network built upon the Skycoin ecosystem creates a mesh of internet connectivity, which removes the requirement for an ISP. Skywire users are rewarded in Skycoin and Coin Hours for providing bandwidth to other users.
What Is a Consensus Node?
In the Skycoin network using Obelisk consensus, a consensus node collects blocks from block-generating nodes and determines which block was made by the largest number of block-generators. That block is added to the blockchain.
What Is PoA Consensus?
Proof-of-Authority consensus is a blockchain consensus mechanism where new blocks can only be created for the blockchain by nodes that have proven through authentication that they have the right to create a new block.
How Does Blockchain Reach Consensus?
Many different consensus algorithms are designed to bring a distributed ledger to a consensus. Most are constructed to have many transaction validators reach a majority agreement about the state of the blockchain and the transactions taking place.
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