POC evangelist Chong Ge: POC consensus mechanism is POW2.0, which is the future of mining coins

The POC consensus mechanism is an innovative consensus mechanism in the blockchain industry. POW is to constantly change a number in the block header to guess the correct hash value, while POC is just the opposite, turning all the workload of guessing numbers into the workload of "plotting" in the hard disk space . Specifically , each block is bound to a unique puzzle. Before mining begins, the network stores the calculation method for solving the puzzle in the miner's hard disk. If the miner's hard disk happens to have a calculation method that is the fastest solution to the puzzle in the most recently generated block, the miner will get the accounting right of the block.

The POC consensus mechanism has many advantages, such as low cost, low risk, energy saving and environmental protection, and fairer to miners. On July 30, the first POC consensus conference and the establishment ceremony of the POC Community were held at the Shenzhen Grand China Sheraton Hotel. POC evangelist Chong Ge delivered a keynote speech entitled "POC consensus brings us back to "2012"". In the speech, he said that the consensus mechanism is the core rule of the blockchain, and POC capacity proof is a brand-new consensus mechanism, which gives us the opportunity to return to "2012" and lay out a new investment track.

Brother Chong is a blockchain veteran with a very deep understanding of the blockchain industry. Why does he advocate the POC consensus mechanism so much? What is the value of BHD, a cryptocurrency that uses the POC consensus mechanism? Mars Finance interviewed Brother Chong after the consensus conference.

Core ideas:

• The core value of Bitcoin is that it solves the problem of the right to mint digital currency, releasing the right to mint currency to all participants. It is the first time in human history that digital cryptography has been used to ensure that people’s sacred assets are not violated.

• Only the blockchain that truly returns the right to mint coins to the community is the cleanest.

• The current core of the blockchain industry is beginning to return to fundamentalism, and more people are beginning to return to mining and recognize the value of proof of work.

• POC is more energy-saving and environmentally friendly than POW, and can be regarded as POW2.0. It is the future of the mining coin industry.

• Hard drives retain their value and will not be like ASIC mining machines, where they cost tens of thousands of dollars when expensive and are sold by weight when cheap.

• After accessing the POC consensus, it will immediately get the support of the entire network's hard disk devices and will be very safe, without having to worry about the risk of 51% attacks.

Mars Finance: What do you think about the value of Bitcoin?

Brother Chong: Looking back at the development history of Bitcoin, in the 1980s, some people began to propose the concept of anonymous privacy protection. Later in 1997, a computer engineer David proposed the anonymous, decentralized electronic cryptocurrency system B-money. Since then, many digital currencies have appeared, but none of them succeeded until the advent of Bitcoin created by Satoshi Nakamoto. Bitcoin has many advantages, including being tamper-proof, non-counterfeitable, limited in number, and resistant to inflation, etc., but in my opinion, the core value of Bitcoin is that it solves the problem of digital currency coinage rights and releases coinage rights to all participants. It is the first time in human history that digital cryptography has been used to ensure that people's sacred assets are not violated. Of course, strictly speaking, Bitcoin is a very good collectible, but it is not suitable for payment applications.

The most important basis for the value of all assets is consensus, just like the USDT stablecoin, which is tied to too many stakeholders. Therefore, even if there is a problem with the financial situation of the US dollar anchored by USDT, people will not give up their consensus on it. Such a consensus is a value support even if it is a consensus of fools.

Previously, the Ethereum ERC20 protocol gave people the opportunity to issue their own digital currencies, but it also caused the chaos of ICO. Now the blockchain industry has gone through twists and turns in its development. Although there are new modes of play such as IEO, I am not optimistic about them. The current core of the blockchain industry has begun to return to fundamentalism, and more people have begun to return to mining and recognize the value of proof of work.

As for mining coins, basically all countries recognize their legitimacy, because the production of mining coins requires miners to invest in production equipment. Only the blockchain industry that truly returns the right to mint coins to the community is the cleanest.

Mars Finance: The POW consensus mechanism has been widely recognized, so why is the POC consensus mechanism still needed?

Brother Chong: There are also big problems with the POW consensus mechanism mining. The National Development and Reform Commission has listed the mining industry as an eliminated industry. The core reason is that POW mining consumes too much energy, but this is not the core problem of the POW consensus mechanism. From the original intention of Satoshi Nakamoto to create Bitcoin, he hoped that one person would have one vote for fairness. However, Satoshi Nakamoto did not expect the emergence of ASIC mining machines, and the emergence of ASIC mining machines is the inevitable result of the development of the industry under such a mechanism. Now the market value of the ASIC mining machine industry is 6 billion US dollars, supporting the market value of 1 trillion Bitcoins, and most of the computing power is monopolized by the top mining pools, so POW is getting further and further away from decentralization.

The ASIC mining machine industry is an extremely unstable industry. The price of ASIC mining machines will fluctuate greatly with the surge and plunge of the currency price. Giants like TSMC and Samsung will not release a large amount of production capacity to the mining machine industry because the risk is too great. When the bull market comes, the supply of ASIC mining machines will be insufficient and the price will soar, which is very unfair to miners and not conducive to the development of the industry. In addition, the problem of power source is also very big. The electricity of many mining farms in China is the abandoned electricity generated by Fengshui power stations because the high-voltage lines cannot be sent out. It does not pass through the national power grid and belongs to the gray industry. Therefore, there are problems such as computing power being embezzled and safety hazards in mining farms. In addition, the cost of getting involved in the mining industry is very high, and it is now at least tens of millions. It is precisely because the POW consensus mechanism has so many problems that the POC consensus mechanism has emerged.

POC is more energy-efficient and environmentally friendly than POW, and can be regarded as POW2.0, which is the future of mining coins. Moreover, POC is more decentralized than the consensus mechanism of DPOS, which only has 21 super nodes.

Mars Finance: What do you think is the biggest advantage of the POC consensus mechanism?

Brother Chong: From the perspective of market development, as long as the market value of a currency under the POW consensus mechanism reaches a certain level, ASIC mining machines will inevitably be produced. Whether it is CPU or GPU, it can eventually be made into ASIC mining machines, but among computer devices, only hard disks cannot be used as mining machines. In the fourth quarter of 2018, the shipment volume of hard disks was more than 80 million pieces. The leading digital currency BHD produced by POC now has more than 200,000 hard disks in a year, with equipment worth 400 million yuan, which is almost the same value as the ASIC mining machine for BCH mining. No matter how the value of BHD grows in the future, people will not be unable to buy hard disks. Compared with ASIC mining machines, it is very fair to ecological members.

In addition, hard disks are noiseless and heat-free, and do not require a mining farm. You can mine at home, which is very convenient. You do not need to build a mining farm next to a hydroelectric power station and bear huge risks. A 1,000 yuan hard disk consumes only a few watts of power, but a 1,000 yuan ASIC mining machine consumes 1,400 watts of power. The power consumption ratio is 300 times different. You can mine with a few yuan of electricity using a hard disk.

For the traditional mining industry, whether it is Bitcoin, Ethereum or Litecoin, each public chain network has an independent mining machine to protect its own security, which wastes resources to do repetitive things. After accessing the POC consensus, it will immediately get the support of the hard disk devices of the entire network and is very safe, without worrying about the risk of 51% attack.

Therefore, POC solves the threshold problem of mining, equipment problem, electricity cost problem and network security problem, which is why it has been popularized so quickly. BHD has completed the computing power growth of Litecoin in 9 years in 1 year.

Mars Finance: For many Bitcoin believers, they believe that the higher the cost of mining Bitcoin, the greater the value of Bitcoin, which is an important factor in building consensus. The mining cost of BHD is very low, so what is its corresponding value point?

Brother Chong: BHD has created an innovative economic model, turning coins into electricity bills. Specifically, when miners increase their computing power by 1T, they need to deposit 3 coins in their mining address to get 100% income, otherwise they will only get 30% income. One way is for miners to buy coins and deposit them into the address as a conditional proof. Another way is for miners to cooperate with people who have coins. The coin holder only needs to point the coin to the mining address provided by the miner in the local wallet and register it in the coinbase chain information to prove that the miner's mining capacity of each T meets the three BHD mortgage conditions. The cooperating miner can get 100% income, and accordingly, the partner who provides the coin proof needs to receive a commission of 20% to 30%.

On this basis, BHD has a flexible proof mechanism. BHD produces 210,000 blocks per month, but the growth of computing power is unlimited. If the computing power increases to 5000P in the future, the 210,000 BHD mined each month will not meet the required collateral coins for computing power, but the flexible proof mechanism that has recently taken effect will lower the threshold for collateral proof. For example, in the future, it is expected that only 1 BHD will be needed to complete the proof with 5000P computing power. By analogy, the higher the computing power, the less collateral coins will be staked.

As the computing power increases, the difficulty of producing blocks will increase, and the cost of hard disks will also increase accordingly, so BHD still has a value basis in terms of the cost of obtaining coins. However, hard disks are value-preserving, and there will not be a situation like ASIC mining machines where the price is tens of thousands of yuan when it is expensive and the price is sold by kilogram when it is cheap. In addition, hard disks consume very little energy, and no matter how big the hard disk is, the power consumption is the same, so the threshold for participation is very low and it is more environmentally friendly.

Mars Finance: If the blockchain industry can only focus on currency as a store of value, its application level will be very narrow. How should the blockchain develop at the application level?

Brother Chong: The coins generated by the POC consensus mechanism can only be used as a store of value, just like BTC will always be a financial reserve application. Blockchain must have a high TPS to create application tools. Blockchain has an impossible triangle. The core contradiction is that it is impossible to return the coinage right to the entire community and obtain a high TPS. You can only choose one of the two. But I think the two can be combined. In the future, the public chain can design a two-layer architecture. The digital currency at the DPOS consensus mechanism layer can develop applications for high TpS attributes, and release the coinage right to the POC miners.

In fact, many applications on the DPOS public chain are very immature, and many applications are mainly based on gambling. This is a big dilemma in the development of the blockchain industry. The core reason is that if it is a functional blockchain application, what is needed is traffic. Traffic is in the hands of large companies, and large companies that control traffic will not open data to build a public chain, which would cost them their lives. This creates a contradiction. Those with traffic will not build a public chain, and those who want to build applications have no traffic. Large companies often use blockchain to build private chains and use non-coin blockchains to process their internal data, but these are far from the blockchain we want. In short, the road ahead is still very long.

Mars Finance: How will the mining machine and mining pool industries be affected as the number of Bitcoin and other mining items decreases or even runs out?

Brother Chong: When Satoshi Nakamoto first designed Bitcoin, miners' income was not only from producing blocks, but also from handling fees. Each transfer still needed to be calculated by mining machines. If the price of Bitcoin in the future cannot support the huge mining system, the entire industry will have many problems. Similarly, after Bitcoin is mined, the mining pool business will mainly rely on Bitcoin handling fees as income, which will also be affected by the price of Bitcoin. However, in this process, the risks of the mining machine industry are much greater. In fact, the characteristic of ASIC mining machines that rise and fall with the price of coins is a huge pain point. The main reason why Bitmain has not been able to go public is this. I think giants like ASIC mining machines can adopt the native gameplay of blockchain, let their company's market value correspond to the corresponding tokens on the exchange, and then distribute the profits each year to their investors. ASIC mining machines have many pain points, which highlight the advantages of hard disks. Hard disks are very valuable and will not face such risks. The consensus mechanism of POC also has more long-term participation value on this basis.