Proof of History (PoH) Meaning
What Is Proof of History?
Think of proof of history (PoH) as a decentralized clock or a global time source. It defines a novel approach employed by blockchain networks to keep track of the timeline of transactions and the order of events in that timeline. Through this mechanism, blockchains can generate historical records that serve as evidence that – “yeah, this event actually occurred” at a specific point in time.
PoH was proposed by Anatoly Yakovenko, Solana Labs founder, in November 2017 as a pre-consensus algorithm. Unlike its peers, it is compatible with other consensus mechanisms like proof-of-work (PoW) and proof-of-stake (PoS). For example, Solana uses PoH in conjunction with PoS to boost its efficiency and resilience. It argues that knowledge of the precise time speeds up transaction validation.
How does PoH work?
PoH primarily focuses on time sequencing. While PoS and PoW blockchains rely on participants’ computational power or economic stake to achieve consensus, PoH networks solely depend on verifiable delay function (VDF). It employs VDF to create timestamps and confirm the duration between two blocks. VDF, a cryptographic function, allows a prover to demonstrate to a verifier that a block was created at a specific point in time.
Technically, the VDF offers memory and delay hardness, meticulously crafted to resist timestamp manipulation attempts. By leveraging the VDF-generated timestamps, tamper-proof and verifiable data is imbued on every block in the network in the order of their creation. Hence, block producers necessarily go through the VDF process to access their designated slot for block production.
PoH typically facilitates fast finality, implying that once a block is included in the blockchain, the process becomes final and irreversible. In contrast, PoW and PoS depend on probabilistic finality; that is, there is always a probability, however small, of reversing or invalidating a block after it has been added to the blockchain.
By only holding a small amount of data in each block, such as the hash of the preceding block and VDF-generated timestamp, PoH significantly lowers the storage and bandwidth requirements. This allows PoH networks to process more transactions per second (TPS) at lower costs.
Pros and Cons of Proof of History (PoH)
PoH consensus mechanism significantly increases network scalability, as nodes know the specific time a previous transaction occurred. For example, Solana, which uses PoH, can handle over 60,000 transactions per second. In addition, PoH networks are also highly energy efficient, minimizing their global carbon footprint.
On the flip side, they still rely on a PoH generator, which is a trusted third party, to create time sequences. Given that the network can only rely on a single PoH generator at a time, it inherently creates a single point of failure, which could jeopardize the security and reliability of the network.
