Gulden is set to implement Proof of Work 2.0 also known as PoW² latest by July this year. The digital cryptocurrency that has tagged itself as user-driven insists this new technology will tremendously enhance its security and provide economic incentives for holders.
In a chat with Cointelegraph, Gulden Lead Dev, Malcolm Macleod who is the mastermind of PoW², says what the technology is going to do to advance it to the crypto space.
He intimated that his outfit has taken a long hard look at various usability issues that stand in the way of their current goals. He also identified several limitations of current Blockchain systems that repeatedly stick out as key usability issues that need to be solved.
According to Macleod, they include issues like erratic block times, slow transaction confirmations, and the risk of double spends among others.
“After looking at these problems holistically, we have come up with a solution that not only solves them but also drastically improves our overall Blockchain security and has other positive effects as well, and this is the system we call PoW².”
Malcolm disclosed that the system works not only by building on top of the existing PoW system but adding onto it a concept we call ‘witnessing’ which involves a deterministic random winner signing each block as it comes in. “In order to participate as a witness users must lock coins in a special address for a period of time (of their choosing) between one month and three years,” he added.
Macleod, the Southern African Based Blockchain Developer, explained that PoW² brings a massive increase in Blockchain security. It is immune to a standard greater than 50 percent attack that would be possible on PoW, with the equivalent attack on PoW² requiring not only 61 percent of hash power but also 61 percent of all coins and still has a lower chance of success.
“At the same time, PoW² remains immune to attacks like grinding that regular PoS coins would suffer from. There are less confirms required by users for their transactions. Instead of the standard seven confirms required for Bitcoin (or more for other coins) the security properties of PoW² allow for users to be sure of consensus much faster, and they need to wait only for one or two confirmations.”
When Cointelegraph inquires about the difference between PoW² and the previous version, Malcolm steered out that it solves the ’empty block’ issue which is very important for scalability, and the transaction backlogs with Bitcoin network for instance with miners mining empty blocks, which is really bad for overall transaction capacity. He is of the opinion that PoW² solves this issue for 99.9 percent of cases.
“PoW² helps to keep the PoW miners on the network less centralized, and completely removes from them the ability to censor transactions, something that is quite possibly going to be a big issue for PoW coins going forward,” he said. “With Bitcoin, we now see a situation where miners get a disproportionate say in decisions (like SegWit activation). With PoW² those who actually hold currency for the long term get more say in forks and therefore the control is placed in the hands of people who actually have a vested interest in the currencies long term health and not just short-term profits.”
In response to what limitations and Challenges PoW² has, Jason van Heerden, a Gulden Team member, emphasized it is when it comes to making it possible for secure one-confirmation transactions which will lead to zero-confirmation transactions in the future but the solution to it will also be out soon. “No real limitations besides the code base becoming more complex to manage,” Jason stressed.
Curiously, on whether you need to permanently keep your wallet open to act as a Witness, Jason said yes. The wallet can remain locked/encrypted during the process so it remains secure. It is likely that cloud and/or dedicated hardware based solutions will become available to assist people with this,” he revealed.
Jason also disclosed the concept has been worked on for over a year now already, with the whitepaper and internal feasibility tests ongoing. Moreover, he explained the release will include many other bug fixes and codebase improvements besides PoW² so it is important that proper testing is done. However, it is their believe it is going to be out and operating on the Gulden network by July.
Expert opinion on PoW²
JuicyG of Coinchat.Club thinks Gulden seems to be using a hybrid PoW/PoS and calling it PoW² isn’t really accurate. In his evaluation, other projects like Ethereum or Ethereum Classic are working towards adding a hybrid PoW/PoS solution.
“As a matter of truth, 80 percent of their block reward seems to be going to miners, while 20 percent is reserved for wallet staking. People have to run the wallets on their computers for it to work. They didn’t set up a system yet that would allow one to use a VPS to host the node, which is not ideal if you care about 24/7 uptime. Few people will let their computers on 27/4. This is something they’ve admitted themselves in their FAQ.”
Cointelegraph asked JuicyG it appears that is some of the solutions PoW² provides, but he was adamant. “It doesn’t strike me as very innovative, to be honest, and also, they mention zero confirmation transactions but this is something that doesn’t exist yet and will come in Version 2.0.,” he differed.