There has been a lot of hustle relating to hash rates and consensus algorithms since ETCs chain got attacked. The 51% attack was monitored from a single source and double spending activity was observed by Coinbase. This has led the market, investors and general public alike to wonder if the consensus algorithms indeed help to decentralize the blockchain and if they’re flawed.
The emerging startups have identified the issue and they agree on the fact that PoS and PoW might have their issues relating to decentralization. Where Proof of Work gives an edge to the miners with more computing power, which can be implicitly put as more real-world wealth, while in Proof of Stake, the decisions are made by miners with more tokens staked. These protocols, in opinions of some, somehow take away the essence of decentralization and give power to the big institutions and big names. Stephanie So, the founder and Chief Development Officer of Geeq (a blockchain startup), had similar views relating to these consensus algorithms. She stated, talking to BlockPublisher,
We at Geeq believe true decentralization has to involve voluntary exchanges that are honored. Promises made should be promises kept – it doesn’t seem right to change the terms on someone midstream without their consent. It also doesn’t sit well with us that the ability to participate in a Proof of Work chain is probably related to how much wealth you have in the real world, either. Neither of these are consistent with the ideals of getting power away from some centralized and/or powerful institutions, nor are they consistent with providing access to all.
The security of a cryptocurrency or a blockchain can be brought down simply to the security of the consensus algorithms. If the consensus algorithms indeed provide randomness and equal chances to all the moners, it can be truly termed as decentralized. However, if the decisions, like in the usual centralized platforms, are taken by people with either more real-world wealth or power, the essence of decentralization is taken away, and hence the reason why people join the crypto space and blockchain in the first place is gone. Explaining her similar views, Stephanie stated,
When a protocol can be manipulated, then it is vulnerable to attack. A 51% attack is the easiest to understand and is quite easy to pull off when hashing power is concentrated, as most people know. In addition, in many protocols, there is the possibility that a majority of participants may call for a hard fork. If the mechanism that determines who might make that decision depends in some way on who has the most (Bitcoin, for example), then the result may be to essentially break the implicit contract that was understood when people joined that chain.
Due to the previously mentioned reasons, most new startups are looking for different other consensus algorithms which would help the blockchain’s decentralized identity to stay intact and yet still be effective. Stephanie concluded,
In a nutshell, we’re not PoW or PoS fans. We have our own consensus mechanism that does not have these flaws, although we are a start-up, so people don’t know about ours yet.
Geeq has launched their own PoH protocol to eliminate the problems with the existing blockchains. The details about the proof can be found out in their whitepaper.