Why Proof-of-Signature Triumphs over PoW / PoS

What are the flaws inherent in both Proof-of-Work and Proof-of-Stake that make Proof-of-Signature an ideal choice for block verification?


How does Bitcoin validate transactions and deter denial of service attacks on its network? It requires a transaction-requesting entity to perform computational work (also known as mining). That is, making data creation difficult for users but data verification easy for the network. This system is known as Proof-of-Work, a not insignificant protocol used throughout much of the cryptocurrency world.

However, significant problems exist with this protocol. First and foremost is the amount of energy required to solve the computations mentioned above. In 2015, completing a single Bitcoin transaction required as much electricity as that used by over one-and-a-half households per day. Even the investor pays as a price, as the burden of these energy costs indirectly produces downward pressure on cryptocurrency prices.

By relying upon miners, Proof-of-Work invariably promotes a network susceptible to attack. That is, as user fees decline over time, the financial rewards of mining (via transaction fees) naturally dissipate. With fewer miners available, the remaining miners have greater leverage over a network’s computational power. If they’re able to control 51% of a network’s computational power they can instigate a 51% attack. The latter enables the attackers to produce fraudulent transaction blocks and even invalidate particular transactions.  

While a 51% attack has yet to occur, the danger is not theoretical. Indeed, under the right circumstances, miners may take control of a network’s computational power with far less than 51% control.  


Proof-of-Stake (PoS) is a second protocol that has emerged as a means to validate transactions. PoS has the advantage of being far less energy intensive than PoW. And unlike Proof-of-Work (PoW), Proof-of-Stake mining power is delegated in proportion to how many coins a miner has (PoW miners need not own the coins they’re mining).  This setup means PoS miners have little incentive to attack (as they would be attacking their currency holdings).

However, PoS has a few notable flaws. In contrast to PoW, it’s far easier for an attacker to alter a blockchain segment (as future blocks would not need to be re-mined as they would with PoW).

Moreover, in the event of conflicting blockchain histories, no participant retains an incentive to agree going forward (this is also known as a consensus failure). They have, so to speak, “nothing at stake.”  Consequently, PoS blockchain-generators may work on several chains at once. During blockchain reorganizations, such individuals may find that they can exercise “double-spending” with their crypto.

Several coins have tried to bypass this obstacle by using a hybrid Proof-of-Work/Proof-of-Stake system (by using PoW timestamping).  Peercoin and others employ periodic ‘checkpoints” and limit the extent to which a blockchain reorganization can occur. No one solution is comprehensive.


Unlike Proof-of-Work, XTRABYTES’ Proof-of-Signature consensus algorithm does not require energy-intensive computing power to process transactions. And unlike Proof-Of-Stake, XTRABYTES relies upon a system of online virtual nodes to ensure consensus. Transactions blocks are validated by the nodes that are online at the time the transactions take place. The nodes that are offline will double check the blocks when they come online; they don’t need to sign themselves. Even one STATIC node could theoretically run the whole network. Altogether, XTRABYTES will be employing a system of 3584 nodes, which can be “halved” at a later stage. Such halving doubles the number of nodes as well as the required amount of coins per node.

Complementing Proof-of-Signature is XTRABYTES’ PULSE (Ping Unified Ledger Synchronization Equalizer) signal. PULSE alerts all nodes when a new transaction is ready for processing and (unlike Proof-of-Stake) incorporates timestamps as a consensus-building factor. It is PULSE itself that determines node communication in the process of verifying transaction blocks.


While Proof-of-Work is tremendously ingenious on its own, its excessive energy-use requirements make it an unwise choice for a growing cryptocurrency industry. Moreover, its reliance upon miners may make it increasingly vulnerable to attack. While Proof-of-Stake appears better in comparison, it maintains a casual approach towards security. Without an incentive for consensus, such an approach is ripe for abuse. In contrast, XTRABYTES is both extraordinarily secure and energy-efficient. It’s the future.

Would you like to know more?

We don’t just publish articles, XTRABYTES is a whole new blockchain platform that allows DApps to be programmed in any language, utilizing a new consensus algorithm called Proof of Signature. In doing so, XTRABYTES presents a next – generation blockchain solution capable of providing a diverse set of capabilities to the general public.

You can learn more on our website, where you can also help to spread the word through our bounty program and get rewarded in XFUEL, or join our community and hop into the discussion right now!








About John Potter

Copy Manager for XTRABYTES' Marketing Department since October 2017 (and XBY hodler since June 2017). John's earned degrees include an MBA, MA , and MLIS. Connect with him on Twitter or LinkedIn via [email protected]


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