Blockchain is showing signs of taking off again, but is SPoS super node mining really a good idea?

Whether from historical experience or the 80/20 rule, blockchain is a game where only a few people can become winners. Because it does have a certain threshold, most people are unwilling to understand even the most basic "rules of the game" in the blockchain world, and these people will definitely not be able to become the "top players" in the blockchain world.

The most important rule of the game in the blockchain world is the consensus mechanism. Some people start to feel overwhelmed when seeing the words "consensus mechanism". Don't worry, this article will try to use popular vernacular to lower the threshold, hoping that more people can understand this important "rule of the game".

Recently, there is a representative consensus mechanism SPoS, which comes from the VSYS project of Sunny King, the father of PoS and a veteran in the blockchain industry. Let’s take this new consensus mechanism SPoS and its specialty “super node mining” as an example to understand the “rules of the game” that the winners must know step by step…

01
What’s New in SPoS

As the earliest proponent of the currently popular PoS mechanism, veteran Sunny King, like BM of EOS, has also created 3 projects . VSYS, like EOS, is the latest project launched by the founder after summarizing historical experience . What new things will it bring this time?

In the blockchain world, the earliest consensus mechanism was Bitcoin's PoW. Later, Sunny King proposed PoS, which not only shortened the consensus time, but was also an environmentally friendly algorithm that did not consume a lot of energy. However, PoS was still not perfect, so DPoS was born. DPoS did greatly improve efficiency and shorten block time, but this consensus mechanism was not perfect either. According to the VSYS white paper, SPoS has the following advantages over DPoS:

1. Super nodes generate blocks in a fixed order

The block generation order of DPoS is random, while SPoS is a fixed order for super nodes to generate blocks. The white paper shows that SPoS optimizes the consensus design mathematically, making it more reasonable and more scalable. Because after sorting in a fixed order, the system response speed will be faster, more predictable and stable. The current SPoS design has a total of 15 super nodes that can generate blocks. The entire network generates a block every 4 seconds, and 15 nodes take turns to generate blocks in an orderly manner within 1 minute. When the system needs to improve performance, the SPoS mechanism can also upgrade the number of super nodes, and the block generation time will be shortened accordingly.

It can be understood as follows:
The DPoS and SPoS groups played the handkerchief game in different locations.

1) The DPoS group selects 21 people to form a circle as super nodes, and then someone called the system is responsible for randomly throwing a handkerchief behind a node. The person behind whom the system puts a handkerchief has to go to the middle to perform a show.
2) The SPoS group selected 15 people as super nodes, and also formed a circle. The system assigned a number to each node. The first time it was thrown to node 1, the second time it was thrown to node 2, the third time it was thrown to node 3, and so on. In this way, the 15 people knew the order in which they would perform on stage. Since the order was fixed, the nodes could make adequate preparations in advance. The handkerchief throwing system could select nodes in order to go on stage without thinking, which was more efficient.

The difference between SPoS and DPoS is not only reflected in whether the block nodes are random, but also the key difference is whether the coin holders can get corresponding benefits by participating in community building. Under the SPoS consensus mechanism, coin holders can get 80% of the mining income by renting tokens to super nodes, and super nodes get 20% of the income from the mining pool ; while DPoS cannot mine, and coin holders have no income from voting for super nodes , and super nodes take 100% of the income.

2. Competition between nodes

Similar to DPoS, SPoS has alternative nodes in addition to super nodes. The difference is that the 49 alternative nodes of DPoS have corresponding benefits (but much less than super nodes) , while the alternative nodes of SPoS have no benefits. In this way, the super nodes of SPoS have become a more scarce resource, and active construction and effective competition are required to squeeze in and gain benefits. This forms a free competition relationship between nodes, and this mechanism is conducive to the healthy development of the system.

3. Scalability and decentralization <br />Currently, the number of super nodes in DPoS is fixed at 21, while the number of super nodes in SPoS was originally designed to be 15. When the system needs higher performance, it can be expanded to 30 or even 60. When there are 30 super nodes, the block time is shortened from 4 seconds to 2 seconds, and when there are 60 super nodes, the block time will be shortened to 1 second. The more super nodes there are, the more decentralized the system is. When SPoS can be expanded to 30 or 60 super nodes, the degree of decentralization of the system will be higher.
4. Innovative super node design

SPoS continues the original idea of ​​PoS: Stake as Power (Token is right) , and the coin holders are the core of the entire network.

Sunny King once publicly stated: There are major differences between SPoS and DPoS. The amount of equity in SPoS determines the weight of decision-making power. It is more appropriate to use China's National People's Congress system to compare SPoS. The super node is the spokesperson who exercises the rights on behalf of the coin holders, and the interests of the coin holders are tied to the super node. DPoS is more like corporate governance. Shareholders (coin rights owners) can vote for executives (coin minting nodes) , but they do not receive benefits and have no motivation to vote, and executives do not need to listen to shareholders.
In SPoS, an ecological design that is completely controlled by the coin holders is clearly proposed :

Super Node = Mining Pool Coin Holder = Miner Coin = Mining Machine

Here, the super node is similar to the mining pool in the PoW consensus mechanism, and the coin is the mining machine. The miner's coin can freely choose the mining pool, which is quite flexible. As a miner, unlike DPoS, the coin holder can obtain the income distributed by the mining pool, which is an incentive for all ecosystem builders. This solves the problem of cold start of the main network and avoids the problem of low participation of coin holders similar to the early EOS.
5. Mining benefits are considerable

With the continuous attention of users in the industry, the price of VSYS has also risen rapidly. Data shows that the income from SPoS super node mining is currently one of the highest among all public chains, and the income allocated to miners is also one of the highest. In contrast, most DPoS projects do not allow or have not yet designed the income rules for coin holders. Unreasonable incentive mechanisms may cause some nodes to passively build because of insufficient income, which in turn affects the development of the entire system.
According to the official profit calculator, we can see that if 1,000 coins are invested in the following nodes for mining, the amount of VSYS and the rate of return obtained are very impressive:

The PoW consensus algorithm is often criticized for its low consensus efficiency and high energy consumption. In the market capitalization rankings, PoS projects have gradually narrowed the gap with PoW and have a tendency to overtake. Ethereum has already laid the foundation for the transition from PoW to PoS consensus algorithm. The rise of PoS has also triggered many consensus algorithms that continue to innovate on this basis, and SPoS and DPoS are typical representatives.

Compared with the current mining income, the income of VSYS in the SPoS consensus algorithm camp is much higher than that of EOS in the DPoS consensus algorithm camp. Of course, this is a conclusion drawn with reference to the current market prices of the two. As we know, the cryptocurrency market fluctuates greatly, and mining income is also greatly affected by this.

02
How to become a SPOS super node?

SPoS has a rich incentive mechanism, and the highest return is definitely the super node as a deep participant. So how to become a super node? VSYS has set up a special site to guide the application process of super nodes:

Step.1 Open the super node list website vsysrate.com and enter the application form

Step.2 Enter the "Super Node Application Form" to view the information that needs to be filled in

The above is a Google form, which needs to be filled out after logging into a Google account.

Step.3 Prepare materials and plans <br />Following the application form, you will need to fill in at least the following information

1. Basic information of the node: node name, website, node team profile, logo, etc.
2. Introduce your node "mining pool" income distribution plan
3. Other relevant information (the project owner also needs to conduct KYC on the applicant)

After submitting the above information, wait for the project party to contact you.
Step.4 Super Node Server Hardware Investment

In terms of super node investment, a simple budget table is as follows:

1. Hardware cost: Because the hardware configuration requirements of the super node's sequential block generation mechanism are not too high, the hardware investment will be lower than that of the EOS super node after optimization. The current investment cost is about 80,000 RMB/year. Considering the subsequent expansion, the reference investment cost is 150,000 RMB/year.

2. Marketing costs: With its own incentive model, coin holders can earn money from mining, making it easier to promote. However, the marketing costs can be large or small, depending on the business operation model.

3. Operation and maintenance costs: Thanks to the fixed-order block generation mechanism, the node operation and maintenance team requires at least 1 technical operation and maintenance personnel and 1 business person, with a cost of about RMB 200,000 per year.

The super node produces more than 18.92 million VSYS coins per year. According to the market price, the annual coin production income exceeds 4 million RMB. For details, please consult the relevant person in charge of the team.

03How to participate in mining?

According to the current situation, VSYS's SPoS mining has considerable benefits, but the cost of participating in super nodes is relatively high. What is the participation plan suitable for ordinary users? The cost of ordinary mining is very low and the operation is also very convenient. Let's take a look at the mining diagram provided by the official website:

As shown in the figure above, similar to the model in which miners of the PoW consensus mechanism connect the computing power of their own mining machines to the mining pool, and the mining pool distributes the profits to the miners in proportion, VSYS coin holders rent tokens to the node mining pool, and the node mining pool obtains block rewards by competing to become a super node, and the profits are distributed to the coin holders in proportion. In this process, there is no need for mining machines or sending tokens to the node mining pool. You only need to map them in the wallet. The tokens are still in the user's own wallet, which is very safe. Just follow the steps below:

Step 1: Download and install the VSYS Wallet App, then create a wallet first.
Step 2: Select the “Minting” function menu in the wallet interface.

Step 3: Enter the super node address (the corresponding super node address can be found on the super node list website vsysrate.com provided above) .
Step 4: Finally confirm and complete the rental, and then you can earn interest without doing anything.

04 postscript

As the most important rule of the game in the blockchain world, the main function of the consensus mechanism is to ensure the safe and efficient operation of the system; at the same time, through a fair and reasonable incentive mechanism, it inspires users to actively participate in the construction of the system and achieve common prosperity of the entire ecosystem within the system.

Do you see these characteristics from the SPoS consensus and super node mechanism design?

I hope more people can understand the rules of the game of consensus mechanism, participate in the construction of blockchain as soon as possible, and become the top players in the blockchain world.

As blockchain continues to develop, there are more and more types of consensus mechanisms. What dimensions do you think an excellent consensus mechanism should take into account?