Proof of research algorithm that the Gridcoin network uses combines rewarding miners for their work with the extreme security of the network. The algorithm is a combination of the Proof of Stake algorithm used by Peercoin and a version of the algorithm by Blackcoin.
How proof of stake algorithm works
The proof of stake algorithm uses the concept of coin age on a digital blockchain network. The creators of Peercoin have built this algorithm into their network and made it a part of coin minting process.
The main benefit of proof of stake compared to proof of work is that proof of stake does not require the consumption of energy.
Coin age that makes the algorithm so different and unique from proof of work is defined as the amount of currency multiplied by the time period that a user on the network is holding the currency. For example, is John receives 30 coins from Tom and keeps them for 30 days, he accumulates coin age of 900 coin-days. If John then decides to spend the coins, he consumes the coin age of the coins.
To make it possible for the PeerCoin network to use the concept, the creators of the network added a timestamp data field to the transactions that occur on the network. Both blocks and transactions have timestamp fields that strengthen the network.
When a user spends the coins, the consumption of the age of coins becomes proof of stake. When the network mints new coins, it considers the stakes that the users have. The higher the stakes, the higher the probability that a user will get a reward for minting a block. Once the network creates a block, it considers that the coin age has been consumed and the process starts all over again.
The process of proof of stake eliminates the possibility of the 51% attack on the Gridcoin network. Such an attack can happen on the bitcoin network is a miner or a pool of miners has over 51% of computational resources on the network, which means that the miner or the pool can start making decisions about the blocks they create without adhering to the rules of the bitcoin network. On the Gridcoin network, for such an attack to occur, one entity would need to win at least 51% of all the coins.
How miners on the Gridcoin network prove their work
In addition to using proof of stake algorithm, the Gridcoin network requires miners to prove that they are contributing to the Berkeley Open Infrastructure Network. For that, Gridcoin miners need to install the Berkeley Open Infrastructure Network Computing software on their machines. They also need to choose a project from the BOINC whitelist of projects.
The BOINC software has four parts: a client that handles communication, a manager, a screensaver and an application for a project that participants choose to participate in.
After a user chooses a project, he or she downloads the software and the work for the project. After the user’s computer performs the necessary calculations and computations, it uploads the data back to the project server. Depending on the project, downloading the files, performing the work and uploading the files back to the server may take several days. When the server gets the work, it checks the work, evaluates it and rewards the user with credits.
One of the biggest advantages of the BOINC is that it can use, rate and reward any kind of standard computing resource that a user may choose to make available to the network.
The software calculates credits based on cobblestones. A cobblestone is 0.5% of a daily CPU time on the reference computer. A reference computer is a machine that does 1,000 MFLOPS (MFLOPS is megaFLOPS, and FLOPS is short for floating point operations per second, which is a measure of computing research power) according to the Whetstone floating point operations benchmark.
By using both proof of stake and BOINC, the Gridcoin network uses the computational resources of its users for the benefit of the science and BOINC project. As the network grows bigger, the amount of BOINC work that the network contributes to science also goes up.