Horizen has had the same proof of work (PoW) algorithm since we launched in 2017, which we augmented with a delayed block penalty mechanism in consensus. This has been working pretty well for us for years, but now as the industry has evolved, and as we think through what might come next with a Horizen 2.0, everything is up for consideration. Do we want to consider changing our consensus from PoW to a version of proof of stake (PoS)?
Almost all of the modern, more recent projects have moved away from PoW and launched directly with PoS or some other non-PoW consensus. Even Ethereum, either the first or second most important network in the world (depending on what you’re measuring) has moved to PoS. There are good reasons for this from both the tech (speed), economics (security budget is paid to tokenholders versus people investing in and operating external hardware), and social perspective (stop burning electricity for security). There are also good reasons to continue with PoW (it works just fine right now, Horizen is the 15th most valuable PoW network in the world already and we could see that jump).
This is a big discussion, but we might as well kick it off here formally with the DAO. I can drop a little hint that as Horizen Labs is working through a major Horizen 2.0 tech upgrade proposal for the community, our engineers and product folks are strongly in favor of using a modern, much faster, and highly supported PoS framework, like either Tendermint or Substrate. Our arguments for something like that are forthcoming with the proposal, but I wanted to kick off this thread to get a sense of where the community sits on the issue ahead of more technical arguments.
Personally I am all for switching to PoS. Mining had a purpose in bringing new people into crypto, but no one is buying ASIC machines to mine crypto. I doubt you can find 5 people ASIC mining Horizen on our discord + telegram.
It would also make sense switching to something like CPU mining like Monero has. Easy cheap way to mine, everyone has CPU’s at home and they arent energy hungry. It could bring new people to Horizen. GPU mining has gone to shit ever since Ethereum switched to PoS, and nothing is profitable anymore. I would avoid this now.
Basically PoS is best option because it benefits the holders, and with PoS we could set the blockchain block speed to something like 10-20 seconds instead of 2.5 minutes which is the limitation PoW faces.
We’re even thinking something like 5 second block times, which isn’t possible (to my knowledge) in PoW without constraining difficulty to some trivial level.
I dont know if 5 second block times are needed, because most of the transactions concerning dapps, NFTs, etc will be done on sidechains.
I think one of Zen’s attractions is the limited quantity and POW of 21 million units. The scarcity of limited volume reminds me of Bitcoin. So it’s negative about switching to POS.
Is it impossible to create poscoins used in the EON chain? Let’s say the name is Zenny, for example. In EON, Zenny replaces zen now used as gas cost. And there’s Zen/Zenny in the market (like btc/zen)
As I understand it, and I think I do, limited quantity of 21 Million Zen wouldn’t change. Only the way earning it.
Isn’t POS easier than POW to modify the total amount of issuance?
(depending on the preference of a person with a large stake)
I’m asking because I don’t know technically.
I prefer the ones that are difficult to modify in terms of total issue volume.
Many people think of BTC (21 million, POW) + ETH (EON, Zendoo) + Zec (privacy) = Horizen. I’ve also been caught up in this.
Its same as in PoW, you would need 51% for any modification. So in PoS, 51% of all holders would have to vote to allow more than max 21 million coins to be minted, and I dont see that happening.
It’s a good point and I’m not sure either, it really depends on where we go as an ecosystem with what types of sidechains or other L2 type of structures settling proofs to the mainchain. For finality, they might need fast block cycles, especially for structures, like L2s, that lack their own consensus and want to leverage the settlement layer for it. More to come, though, as the technical analysis wraps up and we can present findings to the community.
@AstarZens this is correct. Modifying the coin supply, which I’m not a fan of, isn’t related to having either PoW or PoS. You could modify the coin supply similarly with either consensus.
wrt saying that PoW offers a sort of value prop, or differentiator for Horizen, is still a good point in that we’re currently the 15th most valuable PoW coin in the world and that could jump to top 5-10 if we’re successful gaining $ZEN adoption. That could have brand value.
I would go for the most decentralized solution.
I prefer POS to POW for ecology reasons, but I hate the “most-rich decides” or the “most rich forges” systems.
A POS, yes, with the most decentralized POS in the industry. Reach the same POW goals!
PoW atm isnt as decentralized as you might think. People need 10000$ to buy ASICS machines, and for that money, I would rather directly buy $ZEN. ROI is terribly and i am pretty sure only the manufacturers in china who are making such machines for maybe $200-$400 are mining with them.
Like I suggested earlier switching to a CPU algo like Monero would bring decentralization, as I am pretty sure everyone has CPU at home, it uses less power, its cheaper than ASICS or GPU rigs.
On the other hand, PoS would speed up blocks in the blockchain, and people had plenty of time to accumulate $ZEN with mining/buying etc. And pretty much everyone is switching to PoS (because its green that way).
Sure POW is more decentralized with GPUs
In the eyes of the general public.
- Horizhen ranks 15th among POW coins. You can have brand value when you grow.
- Expecting a rise in prices during the half-life
- Minimize hacking possibilities - Zen has already experienced 51% attacks.
- Bad profitability → Miners likely to leave, Only 40% of the total amount is compensated to the miners.
- It is less expandable.
- Full compensation to staking pool
- Profitability improves.
- have good scalability.
- It cannot be said that there is no problem with securities issues in the future.
(No one knows whether POS is securitized or not.)
- Risk of centralization
- Vulnerable to security
Even if it is changed to POS, there is no change in issuance volume of 21 million units.
If you want to change the issue volume, you need 51% consent
If you can easily solve a professional idea, people will be able to come up with more opinions.
For me every consensus mechanism has its own advantages and disadvantages.
Everything depends on the specific goals and requirements of what you want to buidl.
For energy reduction and scalabilty PoS governance mechanism wins.
For security PoW wins , as POS is more prone to Sybil attacks due to the absence of logistical hurdles.
PoS also wins when it comes to low barrier entry , apart from the validator requirements , anyone can delegate to validators, whereas in PoW there’s no requirements you’ll need mining hardwares and energy to run the nodes which is on thr high side.
Many has prefer PoS to PoW due to the reasons above.
Hi AstarZens, I think the supply of Zen is sacrosanct and untouchable. Block rewards would remain the same; at most, they would be adjusted proportionally to allow faster block times.
That’s how I see it, as well. Changing the $ZEN supply has come up several times over the years, and I’ve always been opposed to it. I view it as one of the fundamental social contracts we have with each other in the community.
I’m 100% in favor of PoS for Horizen 2.0. For ecology, community, speed and easier decentralisation.
(And ofc, keep the max supply at 21M. That’s one of the fundamentals of the project.)
Have a nice day zenfrens.
In Horizen 2.0 with mainchain PoS, would EON then leverage mainchain PoS for its consensus & security in the future? Or would we then have two PoS consensus mechanisms competing for ZEN supply with EON already leveraging PoS based on delegated ZEN stakes? I would want to understand how we avoid fragmenting ZEN allocated to consensus / security among multiple PoS systems based on ZEN within our ecosystem. Also, if we execute zenIP 42206 to reallocate Secure node rewards to EON forging rewards, if we merge to one PoS mechanism for both EON & Mainchain in the future, would 70% of block reward then be allocated to PoS participants (60% miner reward + 10% EON forging allocation)?
Such a great question and point about not wanting to fragment ZEN liquidity in our own ecosystem. Are you thinking we should explore some way to have a common validator set for security across the ecosystem?
The simplistic path, if we wanted to upgrade to a modern PoS framework in the mainchain–say, something like Tendermint or Substrate–would be to simply repurpose the 60% PoW mining reward as forger rewards. EON would stay as-is, including the ZenIP 42206 10% Secure Node redirect and potentially an $EON token if the community wanted to do something like that. So, to your point, would this kind of fragmented liquidity for ZEN–having 60% of the ZEN block reward used for PoS on the mainchain and 10% of to EON forgers–be a bad thing? I don’t know, but it’s a great question and maybe even more powerful if we could figure out a shared delegator model.