Blockchain can be considered a revolution in digital technologies that started with Bitcoin and the Ouroboros blockchain is its continuation. In this article, we are going to answer the question, what is the Ouroboros network? Answer and check its evolution, features, advantages and disadvantages.
For a better understanding of this article, we suggest you to read the article “What is Cardano” in Valax blog.
What is Ouroboros Blockchain?
The Ouroboros blockchain is an algorithm based on the Proof of Stake protocol, which is used to create various coins. One of the most famous of them Cardano Is. In 2017, Charles Hoskinson, the creator of the Cardano currency, implemented Ouroboros in order to reduce energy and time consumption for coin production. This currency is highly scalable and is considered the first secure proof-of-stake protocol.
Ouroboros uses a complex and unique mathematical mechanism to secure and stabilize the network. The result of using this mechanism is to reduce energy consumption and facilitate network propagation.
Ouroboros blockchain features
The protocols used in the blockchain network have their own unique characteristics. Ouroboros is no exception. In the following, we examine some of the most important features of this protocol.
- Incentives and rewards
- Energy efficient
- Probability
- Pools and stock agency
Read more What is blockchain?
Incentives and rewards
Ouroboros for the stability of the blockchain network incentive mechanism Uses. The mechanism of this protocol is in a form that rewards participants who commit a set of shares or an ADA currency to the share pool. Depending on the volume and type of assignment, the user can receive a certain amount of Cardano cryptocurrency from the network.
Energy efficient
Ouroboros solved the biggest challenge of blockchain in the proof-of-work algorithm, which required a lot of energy. By using this safe, stable, scalable and ethical algorithm, energy efficiency can be significantly increased. The amount of energy consumption has decreased to such an extent that you can mine four million coins that are produced for the base of this algorithm with the energy required to produce each bitcoin.
The main difference between this algorithm and the proof-of-work algorithm is in the type of coin production. In proof-of-work, miners solve complex mathematical problems by spending a lot of energy and get rewarded for it. While in Ouroboros, the network is horizontally scaled to solve mathematical problems, which results in increased hardware power and increased performance.
The difference in the amount of energy consumed by these two algorithms is very similar to the difference in the amount of energy consumed in a multi-person family and a country like the Netherlands.
Ability to prove security
The security of this network can be proven through mathematics. In the Ouroboros blockchain, as long as 51% of the shares are in the hands of shareholders, it can be guaranteed that the selection of participants is done randomly and the network continues to generate new concepts. In order to evolve and create new concepts, the network uses the security analyzes that are carried out in the network itself and, of course, their repetition.
Pools and agencies
As mentioned, Ouroboros is a proof-of-stake protocol that controls the network by dividing tasks between different pools.
Ouroboros to ensure the stability and stability of the connection in the network, between different parts of the network node operator Uses.
For each pool, the network has designated a leader who is rewarded by adding a blockchain block. Maybe this question arises in your mind, how these leaders are chosen? ADA token holders can transfer these tokens to a pool and delegate their authority to the pool manager. By doing this, the chances of this pool being selected as the leader will increase.
If a pool succeeds in receiving the leadership of a pool in the selection process, investors in that pool will share in the rewards earned.
The evolution of Ouroboros
Ouroboros blockchain, like other new technologies, is always being perfected and fixing previous shortcomings. Until today, 7 different versions of Ouroboros have been published. In the following, based on the publication process, we will introduce them to you and provide explanations about each one.
- Classic
- Byzantine Fault Tolerance (BFT
- Praos
- Genesis
- Crypsinous
- Chronos
- Hydra
Classic Ouroboros
Ouroboros Classic was released in 2017 as the first version of this protocol. The main purpose of this protocol was to use the proof-of-stake algorithm instead of the proof-of-work algorithm to reduce energy consumption when solving complex mathematical problems. This algorithm introduced a new mechanism in the proof of stake environment to attract more investors.
The main difference of this protocol from other proof-of-stake protocols is its high ability to unbiasedly select the leader of a pool and its high security. In the classic version of Ouroboros, in order to increase the security as much as possible, much attention has been paid to the random execution of processes to avoid the creation of patterns.
Byzantine Fault Tolerance version
BFT was the second version of Ouroboros that Cardano used to reboot Byron and transfer old code to the new Cardanode. BFT It made it possible to create a central network. As a result, there is no need for nodes to be online all the time to build a blockchain.
Praos version
This version was launched based on the classic Ouroboros, with the difference that its security and scalability were significantly improved. Like the classic version, Paraos divides transaction blocks into slots and performs processing on them to increase speed. with the difference that it does this in a semi-synchronous environment.
In this protocol, the leader is selected privately and it becomes impossible for attackers to identify the next leader. As a result, security increases.
Genesis version
This version can be considered an improvement of Paraos. By adding a new rule, the developers allow parties to do so without having to inspect trusted points. Bootstrap to do One of the most important features of this protocol is its compatibility with other protocols in the world while maintaining security features.
Crypsinous version
The Crypsinous version is actually an evolution of the Genesis version that features Privacy protection It has been Equipped. This is the first proof-of-stake and privacy-preserving protocol of the technique Snark It uses a private key for encryption that protects the network from adaptive attacks while maintaining privacy.
This version is not currently planned for implementation on the Cardano network, but can be used on other chains.
Chronos edition
This version of the Ouroboros blockchain is designed to protect the ledger against attacks that target temporal information. The Chronos version shows how a blockchain network can continue to operate securely for hours through a time synchronization mechanism.
Hydra version
The Hydra version solves three of the main scalability issues related to throughput, low latency, and minimal storage space per node. This version uses horizontal scaling instead of vertical scaling and combines it with additional nodes to increase hardware power.
Investigating how ouroboros works
Ouroboros to perform network transactions from Proof of stake algorithm Uses. This protocol divides chains into different periods and processes them. For processing, a leader is elected for each period, which is responsible for adding new blocks to the chain. To maintain security in this method, the leader of each slot must skip the last few blocks of the chain and consider only the block specified by the protocol as settled.
This mechanism named Delayed settlement It is known to enable secure transfer of ledgers between participants.
Advantages of the Ouroboros network
The Ouroboros blockchain can be considered one of the best blockchain protocols that has many advantages, some of the most important of which are as follows.
- Being compatible with the environment
- Faster and cheaper network transactions
- Create passive income
- High lack of concentration
- Being compatible with the environment
One of the main reasons for creating this protocol was the high consumption of energy in the proof-of-work algorithm to solve mathematical problems to create new tokens. Ouroboros blockchain is highly compatible with the environment and this is one of its most important advantages.
Faster and cheaper network transactions
The most important advantage of this network is the high speed of transactions per second and the low cost of transfer. Transactions in this network cost less than one dollar, while the transaction cost in the Ethereum network is around 10 dollars.
It is expected that with the updates made by the developers, the transaction speed will increase and the cost of asset transfer will decrease in this network.
Create passive income
Creating passive income is one of the goals of every investor. By depositing ADA in this network, the investor can have passive income. This is possible by locking assets in different wallets.
Low concentration in the network
Ouroboros consensus algorithm is designed so that each node can perform the validation process individually. For this reason, the amount of concentration in this network is very low.
Validation in this network is currently done by more than 1500 different nodes.
Disadvantages of the Ouroboros network
Every blockchain network has its disadvantages. Ouroboros blockchain network is no exception to this rule. Some of the most important disadvantages of this network are:
a. Under development: Many features of this network, such as scalability, have not yet been fully developed.
b. Very low development speed: One of the main reasons for the low development speed can be considered the use of the Haskell programming language, which few developers are familiar with.
J. Recurring payments: Repetitive payment or 51% attack is one of the biggest disadvantages of this network. This issue causes approvers to approve incoming transactions through two different leaders.
A look at the Ouroboros blockchain
The Ouroboros blockchain can be considered one of the newest algorithms designed based on proof of stake, which has become one of the most popular blockchains in the cryptocurrency market due to its special features. In this article, we tried to provide you with complete explanations about the Ouroboros blockchain. Then, we fully reviewed the way it works, evolution, features, advantages and disadvantages of this network.
What is the writing of Ouroboros? Introducing the Cardano blockchain for the first time on the Wallex blog. appeared.
