Security and stability are two significant aspects of a blockchain network. Consensus protocols aim to protect these networks from at least 51% of attacks. For a blockchain network to be considered compromised, malicious attackers must control at least 51% of the entire network. Although this is possible, it gets more challenging over time as the blockchain network grows.
Let’s say 100,000 people use Jax.Network over time, you’ll find that even supercomputers cannot manage the high data storage. For example, even Google servers experience periodic downtimes. And similarly, blockchain servers may go down when there’s a lot of activity on the network. A good case in point is when the Ethereum blockchain almost came to a standstill during the surge in Non Fungible Assets (NFTs).
So, what do you think happens when the network starts operating on a large market? Consensus protocols are one of the reasons why a network can withstand such storms. Below, we’ll analyze the JaxNet protocol alongside other popular consensus algorithms.
The JaxNet protocol and other consensus protocols – a detailed analysis
A specific set of principles governs the Jax.Network ecosystem. These principles are deeply considered when the JaxNet protocol is designed—for instance, Jax.Network chose to use the Proof-of-Work consensus algorithm instead of Proof-of-Stake that is actively advocated for by the Ethereum founder Vitalik Buterin.
Before examining the JaxNet protocol, let’s take a look at the main consensus algorithms like Proof-of-Work (PoW) and Proof-of-Stake (PoS). Proof-of-Work is the pioneer of consensus protocols and works appropriately with distributed public ledgers. Essentially, the protocol utilizes its enormous computational power within its nodes to achieve an agreement, also known as consensus.
Proof-of-Work is employed by popular blockchain projects such as Bitcoin, Litecoin, and now Jax.Network as well. Recently, Elon Musk raised concerns about the widespread energy consumption of Bitcoin mining, which led to a severe fall in the market prices of these crypto assets.
Proof-of-Stake, however, isn’t as power-intensive as PoW. Nonetheless, this doesn’t mean that it is our go-to solution for all blockchain-related challenges. With this protocol, validators are determined based on their economic power – stake. In this system, owning 50% of the total currency allows you to manipulate the network. Also, it allows for bribe attacks.
These protocols are fundamentally different, and they stand by specific principles that are both unique to themselves and shared across the protocols. Below is why the JaxNet protocol is worthy.
Why is the JaxNet protocol superior?
The JaxNet protocol can be described as a merged mining algorithm that anchors Jax.Network directly to the Bitcoin ecosystem. This protocol controls the process of mining JAX coins and JXN coins alongside mining Bitcoin. Such an approach allows a Bitcoin miner to get rewards in Bitcoin and JXN coins, OR JAX coins, both valuable for transactional and speculative purposes.
The merge-mining algorithm allows you to mine more coins with the same amount of computing power, minus a marginal energy efficiency loss of about 1 to 1.5%. This entices miners to verify transactions and mine new blocks on Jax.Network, which in turn ensures a high level of security at a very early stage of the network. Furthermore, JXN coins can be seen as the value of the entire network, the more transactions on the network, the higher JXN convenience yield. It will bring more revenues for the miners and increase the security of the network in a positive feedback loop.
As the JaxNet protocol employs a unique strategy; it involves all the benefits of the Bitcoin PoW consensus protocol. Also, it incorporates lucrative fundamental principles such as a universal reward function, sharding, an equitable merged mining solution, and finally, a decentralized value transfer ecosystem. Using PoW as a consensus mechanism allows the JaxNet protocol to be secure from day one, and grow faster.