Why XinFin Removed POW and Replaced it with XDPoS

XinFin developed a scalable, secure and enterprise grade hybrid blockchain platform that combined the best features of Bitcoin, Ethereum and Quorum. XinFin's blockchain is a combination of permissioned and public chains that can nicely address security and scalability. XinFin Hybrid Blockchain platform has matured through continuous development and improvements.

XinFin's Consensus Mechanism

XinFin removed traditional high electrical power consumption based mining mechanism called PoW (Proof of Work). Instead XinFin adopted an improved consensus methodology called PoS (Proof of Stake), and is now slowly moving towards XinFin Delegated Proof of Stake (XDPoS).

To understand behind XinFin's decision to go for XDPoS, we need to discuss briefly about the consensus mechanisms.

What is Consensus and how PoS, and XDPoS are better than PoW

Consensus means a general agreement which is an important component of blockchain technology. Instead of keeping the accounts in a centralized computing machine, as in a bank or centralized online payment system, cryptocurrency uses distributed ledgers or blockchains to record information. A general agreement is needed to record information, such as the balance of every address, transactions, etc. on the blockchain.

Proof of Work or PoW relies on solving a cryptographic puzzle repetitively over all the nodes of the network. PoW involves burning very high amount of electrical energy.

Proof of Stake doesn't need computers for repetitive solving of the cryptographic puzzle. Insead of miners, PoS requires some validators who will lock some of their crypto coins as stake or deposit. Anybody who holds crypto tokens can become a validator by processing a special type of transaction to lock their crypto fund.

A group of validators takes part to propose the next block, and the weight of each validator's depends on the uptime of the node. When the validators discover a block which they think can be added to the blockchain, they will validate it by placing a bet on it. The validators will get a reward proportionate to their bets.

How XinFin Delegated Proof of Stake works

XinFin Delegated Proof-of-Stake (XDPoS) is more efficient than PoS consensus mechanism. XDPoS uses a reputation system to achieve consensus. The Master node of the network create blocks in a round robin manner. The elected block producers or the witnesses are rewarded for validation of the transactions for the next block.

i) Block producers are elected randomly and are limited in numbers who can sign and create blocks.

ii) Block validators are the full nodes who verify that the blocks created by the block producers follow the consensus rule.

The main difference between XDPoS and PoS is in the consensus mechanism of XDPoS. The community members have more rights in governance of the network.

pos and cons of XinFin Delegated Proof of Stake

In XDPoS consensus, only the Master Node or the block producers can create the blocks. The transactions are permitted only within the limited number of witnesses. Therefore, XDPoS helps to make processing faster, reduce cost and improve scaling. The witnesses are regularly monitored. If they are found to be malicious, i.e. try to censor transactions or double spend, the other master node can fire a witness by slashing them for the next round.

XinFin prefers XDPoS because of speed, cost and scalability

Since XDPoS is more democratic, faster, efficient and effective to scale, XinFin naturally preferred to XDPoS.