How Can We Help?

Why Create a New Consensus Protocol?

You are here:
< Back

We rarely see other cryptocurrency teams articulate why their technology matters on a human level beyond the typical "we liberate you from big government!" or "we help the unbanked!" and other shallow platitudes. A well-designed cryptocurrency is much more than that. The Gini Whitepaper and Gini book provide a deeper exploration of the human impact of Gini's technology, but this brief article should help people connect the dots between a few of the most important technical principles and their real-world human impact.

We All Need a Way to Achieve Consensus on Important Decisions. All decentralized cryptocurrency systems enable each node on the network to have their own copy of the global ledger database. This architecture is desirable because it increases the integrity of the system in several ways, but it also creates the possibility of synchronization delays between network nodes, which can lead to various problems and security risks. Thus, every decentralized cryptocurrency needs a consensus protocol, which enables nodes on the network to achieve consensus regarding the true state of the global ledger at any point in time.

The Gini Trust Protocol. The Gini Trust Protocol (GTP) is the short name for several security and consensus protocols operating in parallel within the Gini Platform, including Gini's unique Proof-of-Commitment Consensus Protocol (PoC). The PoC is the specific mechanism that determines how nodes on the Gini Network achieve consensus regarding the state of the global ledger under certain rare conditions, e.g., during a ledger fork. (More details about the GTP and PoC can be viewed on the Gini Trust Protocol page.)

Why Create the PoC? The Gini Whitepaper provides a more detailed answer, but in summary: All decentralized cryptocurrencies provide a protocol-level mechanism to determine whether a given transaction/block is valid. However, if there is a synchronization delay or a malefactor attempts to inject fraudulent transactions into the ledger that leads to a ledger fork, who determines which transactions/blocks are valid? Proof-of-Work (PoW) protocols answer this question with computationally expensive, electricity-wasting and environmentally destructive math puzzles. In contrast, Proof-of-Stake (PoS) protocols answer this question based on the amount of stake (currency value) a given node controls, which injects many unnecessary sources of human bias into the system.

Eliminating Unnecessary Systemic Bias. Pure PoW and PoS systems inject unnecessary bias into their systems, which concentrates overwhelming ecosystem power into rich nodes either directly (PoS) or indirectly (expensive PoW-based crypto-mining farms). This fundamentally erodes the integrity of their monetary systems and makes them vulnerable to all the same economic and political problems that plague all other fiat and crypto monetary systems today.

Politics Pollutes the Systemic Integrity of Other Cryptocurrencies. The U.S. political and economic systems are fundamentally and fatally broken. (If you're not sure about this, read Broken Capitalism and the Gini book and the Global Governance Scorecard and dozens of other well-documented books.) Many cryptocurrencies that claim to be fixing these problems are merely a crypto veneer over a rotting fiat system carcass. In fact, all other cryptocurrency consensus protocols (including the protocols in Bitcoin, Ethereum, Cardano, Nano, Dash and others) suffer from both the PoS wealth concentration problem and several political problems. For example, in addition to the most obvious problems:

  • Nano's "representative nodes" are by definition among the richest nodes on the Nano network (Nano rep nodes must have at least 0.1% of all Nano currency on the network, but they're dominated by a few very rich nodes.); yet they're supposed to "represent" the general population. This is no different than a government and an economy controlled by a tiny group of rich oligarchs.
  • The Nano team automatically points all network nodes to their own representative node by default, which ensures that the Nano team controls the network forever.
  • The mechanism of selecting representatives and stake pool operators in Nano and Cardano, respectively, are fundamentally a political process in which humans advertise their super-nodes to the general public to persuade other humans to delegate their voting power to them.
  • Any cryptocurrency that makes it easy to concentrate wealth/power is much more vulnerable to 51% attacks.
  • Any cryptocurrency that concentrates voting power into a special class of nodes (e.g., "representatives", "miners", "masternodes", etc.) creates security vulnerabilities because a human attack against those special nodes' owners could result in giving significant influence over the network to the attacker. For example, if the human owner of a representative/masternode/miner with huge stake/hash power on the network is kidnapped at gunpoint by a human attacker, the human owner must either die or give up their private keys to the gunman. Most rational humans will give up their private keys. That means cryptocurrencies that allow high concentrations of stake/hash power in individual nodes are extremely vulnerable to kidnapping, blackmail, extortion, terrorists, and state-sponsored actors that often use extrajudicial murder and coercion to achieve their goals.

What's the Difference Between an Easily Corruptible Political System and a High-Integrity Governance System? Very few people understand this distinction, which is why politicians, corporations and many other cryptocurrency projects today are sliding into a toxic swamp of political in-fighting, eroding value systems and cultural degeneration. To be clear, human-level negotiation and consensus mechanisms are necessary to manage human-level activities, which is why we have Ambassador Nodes in the upcoming Community Governance System. However, injecting unnecessary human bias and political dynamics into a cryptocurrency's core ledger consensus protocol makes the entire ecosystem unnecessarily vulnerable to all the same problems that plague the economic and political systems in the fiat world today. (To learn more about the difference between "unbiased" and "non-biased" systems, see Why Trust Gini?)

Gini's unique Proof-of-Commitment (PoC) consensus protocol eliminates these unnecessary sources of bias at the deepest possible level: the consensus protocol. This is one of the reasons why the Gini cryptocurrency is the only cryptocurrency today that is intrinsically designed to produce a truly equitable, stable and sustainable monetary system for real-world commerce.

Did You Like This Resource?

Gini is doing important work that no other organization is willing or able to do. Please support us by joining the Gini Newsletter below to be alerted about important Gini news and events and follow Gini on Twitter.