Blockchains are superior to traditional systems because of their immutability, decentralised and thrustless nature; Nexty is a disruptor in this space. This article will examine their PoF consensus, which amazes me. Please read my project overview and platform articles before this:

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https://bit.ly/2lg9XKH

What is consensus

It is the backbone to any blockchain. A simple example of consensus is: If I ask for 5 dollars, I am conveying a desire to you and both the receiver and sender agree to this. If either party does not know the meaning behind the request (e.g. language barrier) a problem arises. Consensus involves all parties of the transaction but also the rest of the social group (network) as every entity must consider it a correct transaction for it to be validated.

Traditional vs distributed ledgers

Traditional system (centralised)- Keeping Stock, (2018) say these reside on a database which controls the data. Trust comes from knowing the server validates correctly.
Distributed system (decentralised)- No central authority so nodes verify the transactions to keep things consistent, thrustless and secure like Nexty.

Proof of Work (POW)

Ensures a computational difficulty which ensure it persists into the future. If there are conflicts, the hardest chain to generate is kept.
Ensures the next block within the chain is the “true” and “correct” version of the truth and keeps hackers from forking the chain. (Castor, 2018)
Miners compete to add new blocks (group of transactions) by racing to solve an extremely difficult cryptographic puzzle, the first to solve wins the lottery (for BTC & transaction fees).
Problem= High energy requirement, scaling issues, high fees and clustering of mining centres.
BTC/ETH use this.

Proof of Stake (POS)

Investors stake coins in order to add blocks.
Chances of being picked to create the next block on the system depends on your stake (share) of the total coins you have invested in.
Once block created then the nodes verify it and sign it to the system.
Jagati, (2018) suggest Ethereum will eventually change to this.

Delegated proof-of-stake (DPoS)

Witnesses generate blocks by being elected by stakeholders.

Proof of Activity

Combines both POW & POS.
Mining begins with POW but blocks don’t contain transactions.
POS then choses a random group of validators to sign the block (higher stake= higher chance).
Once validated it becomes a full block and fees are split between the miners and validators.

Proof of authority

Transactions validated by approved accounts.
These validators run software to do this automatically.
Good reputation= validator= Right to earn.

Nexty’s Proof of Foundation (POF)

Inspired by PoA & DCCS making it more decentralised.
As per the chart= better than the competition.
The first 10 billion NTY issued over the first 3 months will become NTF at a 10k:1 ratio= rare.
Smart staking will run the network. Holders of NTF cannot vote for NTY currency decisions however.
Early visionaries of the ecosystem will hold the NTF, Their GitHub states this is the reason it’s called POF.
NTF holders will be the ones with the right to mine NTY and receive NTY in return.
Machinery/ personnel operating the system are paid the required amount to run smoothly.
High holders of NTF can grant “executing accounts”. This allows them to become the authorised block sealers, thus authorising the network.

This chart shows how NTY will be apportioned to NTF holders via the PoF algorithm:

Source: Nexty.io (2018)

Conclusion

Nexty say 40 billion NTY will be generated by POW, and when it is all mined the machines will be responsible for transaction confirmations. This is a huge opportunity to those of you who wish to move mining operations away from Ethereum and other blockchains which have increasing difficulties.

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References

Castor, A. (2018). A (Short) Guide to Blockchain Consensus Protocols. [Blog] CoinDesk. Available at: https://www.coindesk.com/short-guide-blockchain-consensus-protocols/ [Accessed 18 Jun. 2018].
Keeping Stock. (2018). Explaining blockchain — how proof of work enables thrustless consensus. [online] Available at: https://keepingstock.net/explaining-blockchain-how-proof-of-work-enables-trustless-consensus-2abed27f0845 [Accessed 18 Jun. 2018].
Jagati, S. (2018). Ethereum’s Proof of Stake Protocol Under Review. [Blog] Crypto Slate. Available at: https://cryptoslate.com/ethereums-proof-of-stake-protocol-in-review/ [Accessed 18 Jun. 2018].

A detailed look at Nexty’s PoF consensus