Proof-of-Work (PoW) is a consensus mechanism used in blockchain networks to validate transactions and secure the network.
Proof-of-Work (PoW) was the pioneering consensus mechanism that laid the groundwork for blockchain technology. It has since been joined by several other alternatives, each with its own strengths and weaknesses. Several of these alternatives will be explored below.
It is the method by which network participants, known as miners, solve complex mathematical problems to add new blocks of transactions to the blockchain. Think of it as a competitive puzzle-solving race where the first participant to solve the puzzle gets to add the next block to the blockchain and is rewarded for their effort.
Gold Fever
Bitcoin has often been referred to as “digital gold” for several reasons: First, it has a finite total supply, just like gold buried within the rocks of the earth. Next, it acts as a store of value in the same way as gold, providing an alternative way to hold wealth to the world’s Fiat* currencies.
* “Fiat currency” is derived from the Latin “fiat,” which means a determination by an authority, or an arbitrary order. Basically, Fiat currencies are those decided upon and approved by governmental authorities… they have value because an authority told us they do.
Finally, Bitcoin resembles gold because it must be mined, converting time and energy into the retrieval of BTC for miners. In the same way, gold miners must commit financial resources, time and energy into their operations. A miner who only expects to find a few specks of gold can probably do so in a wise location with only simple panning equipment, but a large company with employees and equipment expenses needs to mine a great deal more gold to prove a profitable venture.
How Does Proof-of-Work Work?
Transaction Bundling: When users initiate transactions, these are grouped together into a block by miners.
Puzzle Solving: Miners compete to solve a cryptographic puzzle, which involves finding a hash (a fixed-length string of characters) that meets specific criteria. This process is computationally intensive and requires significant processing power. Most of these computations are executed by GPUs (Graphics Processing Unit) because of their ability to quickly perform extremely complex calculations.
Block Validation: The first miner to solve the puzzle broadcasts their solution to the network, which is then verified by other miners. If the solution is correct, the block is added to the blockchain.
Reward: The miner who successfully adds the block is rewarded with newly created cryptocurrency and any transaction fees from the transactions included in the block.
Security: PoW secures the blockchain by making it computationally expensive to alter any part of the blockchain. To change a block, an attacker would need to redo the PoW for that block and all subsequent blocks, requiring immense computational power.
Decentralization: PoW allows a decentralized network of miners to compete to validate transactions, reducing the risk of central control.
Integrity: It ensures that all transactions are processed in a trustless manner, meaning participants do not need to trust a central authority but can trust the network’s consensus rules.
“Consensus” in web3 – An agreement between all participants in a blockchain network on the order and content of blockchain blocks.
Proof-of-Work Simplified
Imagine a large-scale Sudoku competition where participants race to solve the puzzle. The first one to complete it correctly gets a prize and publishes their solution, which others can quickly verify as correct or incorrect.
Think of the PoW puzzle as a lock and the solution as the key. Each miner tries different keys (hash values) until one fits (meets the criteria). The first one to unlock the lock (solve the puzzle) can add a new block to the blockchain and collect its associated rewards.
Energy Consumption: PoW requires significant computational power, which translates to high energy consumption, raising a plethora of environmental concerns. This concern has been the primary driver of development of alternative consensus mechanisms in web3.
Centralization Risks: Despite being a decentralized mechanism, PoW can lead to centralization of mining power in regions with cheap electricity or in the hands of entities that can afford specialized hardware. Some people worry that mining operations will become overly centralized with this approach, especially if reward value continues to increase at a level that will justify large scale operations and great expense.
Scalability Issues: PoW networks, like Bitcoin, face scalability challenges due to the time and resources required to solve the cryptographic puzzles and add new blocks.
Alternatives to Proof-of-Work
In response to these challenges, alternative consensus mechanisms have been developed, such as Proof-of-Stake (PoS), which relies on validators who stake their cryptocurrency to propose and validate blocks, requiring less computational power.
Proof-of-Stake (PoS)
The main alternative to Proo-of-Work is Proof-of-Stake, in which Validators stake their cryptocurrency to participate in the network. They are selected to create new blocks based on the amount of staked cryptocurrency.
Strengths
Energy-efficient: Significantly less energy consumption compared to PoW.
Faster transaction times: Can process transactions more quickly.
Weaknesses
Potential for centralization: Wealthier validators can have greater influence.
Security risks: Vulnerable to attacks like the “nothing-at-stake” problem (when the cost to create blocks becomes too low).
With this mechanism, token holders vote for delegates who validate blocks. With fast transaction times, this method closely resembles PoS but with increased scalability. However, decentralization is reduced because more staking power can be concentrated in the hands of fewer delegates. Plus, if delegates are compromised for any reason, things can go awry for the chain.
Other Consensus Mechanisms
Proof-of-Authority (PoA): Relies on a pre-selected group of validators to validate transactions.
Proof-of-Burn (PoB): Requires users to destroy cryptocurrency to become a validator.
Proof-of-Capacity (PoC): Uses hard drive space as a measure of stake.
Proof of Storage (PoS): Validators prove they are storing data to secure the network and earn rewards.
GalaChain is a highly advanced blockchain, first built by our web3 experts to accommodate the rapidly expanding and evolving needs of gaming and entertainment.
It uses a special hybrid model of pluggable blockchain consensus. GalaChain was built on the Hyperledger Fabric protocol, which allows consensus to be highly customizable on individual channels. An Ordering Service works with predesignated peers on the network to sign transactions in a multi-step, asynchronous system.
Despite its criticisms, PoW remains a foundational technology in the blockchain space, particularly for major cryptocurrencies like Bitcoin. Innovations and improvements in mining technology and energy efficiency are being explored to mitigate its environmental impact. Even as other consensus mechanisms are introduced, Proof-of-Work elements will still be used in a growing variety of hybrid consensus models.
Even if Proof-of-Work is gradually phased out of prominence as a consensus mechanism, it will continue to work well as an educational basis to help anyone understand the decentralized nature of blockchains and cryptocurrencies.
Proof-of-Work is a vital component of many blockchain networks, providing security, decentralization and integrity. Understanding PoW is essential for grasping how blockchain technology works and its implications for the future of digital transactions and decentralized systems.
Today we’re announcing a new partnership with Coinflow, our newest credit card payment processor. This collaboration aims to provide our users with a seamless credit card payment experience, ensuring flexibility and reliability in transactions across our platform.
Expanding Payment Options
In our ongoing commitment to enhance user experience, we are finalizing the implementation of Coinflow as an additional payment processor. This strategic move will offer our users another option for credit card payments, complementing our existing service. By doing so, we ensure that our community has robust and flexible payment solutions, reducing potential disruptions and enhancing overall transaction reliability.
Our integration rollout plan with Coinflow has commenced with a wide variety of eligible purchases in the Gala Games store. All items that had Stripe credit card purchases as a payment option should now show the CoinFlow option.
This initial phase will allow us to test and optimize the new payment processor before extending its use to our broader range of products in Music and Film, and add support for Google and Apple Pay.
For the first days of the new Coinflow payment option, Coinflow purchasers will receive a special 5% rebate for a limited time delivered as $GALA at the time of fulfillment (rebate amounts may fluctuate). Enjoy this exclusive rebate as we celebrate this new integration!
Start of Coinflow Rebate: 1pm PT, July 30th
We are enthusiastic about this partnership with Coinflow and the added convenience it brings to our users. Stay tuned for more updates as we roll out this feature and continue to innovate within the GalaChain ecosystem.
Thank you for being a part of our journey. Together, we are reshaping the future of decentralized entertainment and beyond.
We are thrilled to announce the launch of our GalaChain TestNet, a significant milestone in our journey towards becoming an open-source blockchain. This new public testing environment allows external developers to deploy, test and refine their chaincode without any real-world consequences.
With more freedom to experiment with chain code, developers will enjoy a GalaChain environment that helps them realize their full potential in the web3 world, whether or not they have blockchain development experience. We want to elevate the work of veteran blockchain developers while ensuring that the first-time experience for new devs from the traditional web2 world is a good one.
What is a TestNet?
For those unfamiliar with blockchain terminology, a TestNet is essentially a sandbox environment where developers can experiment with new features and applications. It operates just like the real blockchain (known as the MainNet) but uses test tokens instead of real cryptocurrency. This allows developers to test and debug their projects in a safe space, ensuring everything works perfectly before going live on the MainNet.
In a future blog from our web3 explainer series, we’ll delve more deeply into TestNets, exploring their importance and providing some examples of testnets in action in the web3 world.
Accessing the TestNet
Are you ready to start building using the GalaChain TestNet? Get started through Gala Creators, following the steps below:
Deployment Chaincode from Docker Containers: Developers can now deploy their chaincode from Docker containers to the TestNet environment, enabling seamless integration and testing of applications.
Comprehensive API Access: Users can call the REST API to interact with their chaincode, ensuring full functionality and integration with existing systems.
Redeployment Capabilities: If a deployment fails, users can redeploy their chaincode effortlessly by passing the chaincode name in the command line, streamlining the testing process.
Chaincode Approval and Verification: To ensure security and integrity, chaincode deployment requires approval from GalaChain support, including Docker Image Tag and public keys for both the developer and the chaincode admin.
Accessible Testing Environment: The TestNet environment is designed to be user-friendly, with step-by-step guides to assist developers through the deployment process.
This TestNet launch is a crucial step in preparing GalaChain for a broader influx of external developers. By providing a secure and isolated environment for testing, we are fostering an ecosystem of innovation, enabling developers to create and refine applications that will power the decentralized future.
Why This Matters
The launch of the TestNet is more than a technical milestone; it’s a demonstration of our commitment to building an open and collaborative blockchain ecosystem that goes beyond entertainment into multiple world industries. GalaChain will empower countless developers to experiment and innovate freely, laying the groundwork for the robust applications that will define the next era of decentralized technology.
Join the Revolution
As we continue to expand and refine GalaChain, we invite developers from around the world to join us in this exciting journey.
Whether you’re an experienced developer looking to explore the new possibilities that come with web3, an visionary with an idea ready to change the world when paired with the right technology or an entrepreneur sitting on the next big wave in tech business, we want you to build on GalaChain.
Your creativity and ingenuity are the keys to unlocking the full potential of blockchain technology. Together, we will shape the future of digital interactions to create a more inclusive and decentralized world.
We look forward to seeing the innovative projects that will emerge and thrive from the release of this TestNet. Thank you for being part of the Gala community and for your continued support.
In our continuous effort to enhance the security of GalaChain, we are implementing a significant security upgrade to the GalaSwap API that will require action from users of the API. If you’re using the GalaSwap API, we appreciate your cooperation in this process to ensure that your integration continues to operate correctly.
Security Upgrade Overview
This update focuses on enhancing the security of API operations by standardizing the signature process. Moving forward, GalaChain will only accept one specific signature out of the two possible valid signatures for any given operation. As a result, API users must update their signing code to generate the newly accepted signature. Failure to do so will cause approximately half of your signed requests to the GalaSwap API to fail with an error message such as “S value is too high.”
Required Actions
Review and Update Request Signing: Please consult the updated Request Signing section of the GalaSwap API documentation. Ensure that your signatures are normalized according to the new guidelines provided in the example code.
Update Your Code Before August 1, 2024: It is critical to update your code to comply with the new signature requirements before the deadline. This includes users of Gala’s open-source bot, who should pull the latest version of the bot’s code. If you interact with third-party services using the GalaSwap API, consult the operators of those services to confirm they are also prepared for this change.
Why This Matters
This proactive security improvement is not a response to any current vulnerabilities but a strategic enhancement to our security protocols. For more information on the technical details and the importance of this update, refer to this informative article on Signature Malleability.Thanks for your prompt attention and support for this important update. Ensuring the security and integrity of GalaChain remains our top priority, and we appreciate your cooperation in achieving this goal. If you have any questions or need further assistance, please reach out to Gala Support.
Welcome back to DevSpeak, where we demystify the often confusing jargon that developers use. Today, we’re tackling a term you’ve probably heard a lot: “algorithm.” Algorithms are fundamental to programming and technology, but what exactly are they? Let’s break it down.
Algorithm, Defined
At its core, an algorithm is simply a set of instructions or a step-by-step guide designed to perform a specific task or solve a problem. Think of it like a recipe in a cookbook. When you follow a recipe to bake a cake, you’re executing an algorithm. You have a clear list of ingredients (inputs) and detailed steps (instructions) to transform those ingredients into a cake (output).
Al·go·rithm /ALɡəˌrithəm/
NOUN – a process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.
Algorithms are everywhere in the tech world, essential for making software and hardware function correctly. They are used to process data, make decisions and automate repetitive tasks. From sorting data in a spreadsheet to finding the shortest path in Google Maps, algorithms are behind the scenes making things work smoothly and efficiently.
Imagine you’re planning a road trip. You want to find the quickest route from your home to a distant city. You input your starting point and destination into a GPS app. The app uses an algorithm to analyze various possible routes, considering distance, traffic, and road conditions to suggest the best path. This algorithm ensures you get to your destination efficiently.
Types of Algorithms
Algorithms come in various types, each suited for different tasks. Here are a few common ones:
Sorting Algorithms: These arrange data in a particular order. Examples include QuickSort and MergeSort.
Search Algorithms: These find specific data within a large dataset. Examples include Binary Search and Linear Search.
Compression Algorithms: These reduce the size of data for storage or transmission. Examples include ZIP and JPEG compression.
Encryption Algorithms: These protect data by converting it into a secure format. Examples include AES and RSA.
In the context of Web3, algorithms play a critical role in blockchain technology and decentralized systems. They ensure the integrity, security and efficiency of web3 powered platforms and blockchains themselves. For instance, consensus algorithms like Proof of Work (PoW) and Proof of Stake (PoS) are vital for validating transactions and maintaining a blockchain’s integrity.
Algorithms in Action: Smart Contracts
Smart contracts are self-executing contracts with the terms directly written into code. Algorithms within these contracts automatically enforce and execute the terms when predefined conditions are met, ensuring transparency and reducing the need for intermediaries.
SEO and Algorithms
Search engines like Google use complex algorithms to rank websites. These algorithms evaluate hundreds of factors to determine which sites provide the best answers to users’ queries. Understanding these algorithms can help developers optimize websites to rank higher in search results, making SEO (Search Engine Optimization) a vital skill.
For a content, product or service provider to maximize their reach and capture the attention of as many people as possible in today’s hyper connected world, they must learn to understand search engine algorithms inside and out.
The term “algorithm” rose to prominence in the mainstream with the rise of social media during the web2 era, which will likely be remembered as the social media era. Perhaps the most commonly known algorithmic activities today are the ones that determine what you’ll see on your social media feed.
In the earliest days of social media, you would simply see everything posted by those you followed or your designated friends. But as the social media industry evolved, we began to see much more complex behaviors from sites like Facebook, Twitter and Instagram. They began to show you only what their complex algorithms wanted you to see, based on the information they had collected from you (with your permission, thanks to your acceptance of extensive terms and conditions).
As these networks of algorithms grew more robust and users contributed more and more data to the social media platforms, our “feeds” began to know us very well. This is how scrolling a feed became one of the most satisfying (and unfortunately, addictive) activities humans have ever experienced. The algorithms knew exactly what kind of content was worthy of our individual attention at that moment. It’s truly fascinating to look back at all the ways that social media algorithms have changed the lives of not only those who use social media networks, but everyone in the world.
Algorithms are the backbone of the digital world, powering everything from simple calculations to complex blockchain systems. They transform inputs into outputs through a series of well-defined steps, making technology functional and efficient. Whether you’re navigating with a GPS, securing data or interacting with a blockchain like GalaChain, algorithms are at work, ensuring optimal performance.
Previous DevSpeak Articles
That’ll do it for this DevSpeak, but we’ll be back soon to dispel the confusion around other common tech terms. If you’ve missed any of our previous editions, check them out below!
