Komodo’s technology vision is anchored to the 4 Pillars of Blockchain Technology: security, scalability, interoperability, and adaptability. This post will explain Komodo's innovative Delayed Proof of Work (dPoW) security mechanism and its corresponding Blockchain Security Service.
Blockchain Security Is Often Inadequate
In the blockchain industry, security is the most important aspect for any project or business. If a blockchain isn’t secure, it’s simply a matter of time before it gets hacked.
Over the last few years, there have been a number of successful attacks recently that demonstrate this point. This includes some major projects that sit in the top 100 coins according to market capitalization value. Bitcoin Gold, Ethereum Classic, and Verge, just to name a few, have all fallen victim to hackers.
Here's a summary of recorded 51% attacks and the amount of losses incurred in each one.
- June 2013: Feathercoin (FTC) attacked for ~$1,400 in losses.
- July 2013: Terracoin (TRC) attacked for unknown losses.
- August 2016: Krypton Network (KR) attacked for ~$4,200 in losses.
- April 2018: Electroneum (ETN) attacked for unknown losses.
- April 2018: Verge (XVG) attacked for ~$1.1 Million in losses.
- May 2018: Monacoin (MONA) attacked for ~$90,000 in losses.
- May 2018: Verge (XVG) attacked again for ~$1.75 Million in losses.
- May 2018: Bitcoin Gold (BTG) attacked for ~$18 Million in losses.
- June 2018: ZenCash (ZEN) attacked for ~$550,000 in losses.
- June 2018: Litecoin Cash (LCC) attacked for unknown losses.
- September 2018: FLO Blockchain (FLO) attacked for ~$27,500 in losses.
- September 2018: Pigeoncoin (PGN) attacked for ~$15,000 in losses.
- November 2018: Aurum Coin (AU) attacked for ~$500,000 in losses.
- December 2018: Vertcoin (VTC) attacked for ~$100,000 in losses.
- January 2019: Ethereum Classic attacked for ~$1.1 Million in losses.
As these figures show, 51% attacks are an enormous problem. And it's not just smaller blockchains that are vulnerable-- almost every Proof of Work blockchain project is at risk.
To add an impenetrable security layer and mitigate the threat of a 51% attack, Komodo uses the delayed Proof of Work (dPoW) security mechanism.
Komodo’s Security Mechanism: Delayed Proof of Work (dPoW)
Komodo's delayed Proof of Work (dPoW) mechanism recycles the hashrate of the Bitcoin network to protect all integrated blockchains an equal level of security. This is made possible by storing backups of individual blocks onto the decentralized ledgers of other blockchains, including Bitcoin itself.
The process of storing backups of individual blocks onto another blockchain's ledger is called notarization. Komodo's decentralized network of 64 Notary Nodes carries out the technical work required to successfully complete notarizations. Each year, the 32 top-performing Notary Nodes are automatically re-elected to reward diligence and ensure continuity in the network. The other 32 Notary Node positions are decided at the ballot by the Komodo community in an annual stake-weighted election.
Komodo’s Notary Node network uses a command in the Bitcoin script called OP_RETURN to complete notarizations. In short, this command allows a small amount of data to be saved directly onto the Bitcoin ledger with a special transaction. The transaction requires payment of one ordinary transaction fee but does not actually move funds from one address to another. Instead, an OP_RETURN transaction is made specifically to save a small amount of data onto the BTC ledger.
With Komodo’s Notary Node network and the OP_RETURN command, the Bitcoin’s massive hashrate can be recycled to secure other blockchains. This is precisely what delayed Proof of Work (dPoW) does.
The Delayed Proof of Work Process
The delayed Proof of Work (dPoW) security process works as follows.
First, the Notary Node network saves a block hash from every dPoW protected chain onto the KMD chain. Block hashes are taken from blocks roughly ten minutes old, ensuring that each chain’s decentralized network has come to consensus that those blocks are true and valid.
Then, the Notary Nodes save a block hash from the KMD chain onto the BTC chain. Since a block hash from every dPoW-secured chain is already stored on the KMD chain, this single notarization extends to not just Komodo, but every chain using delayed Proof of Work security.
Finally, the Notary Node network performs back notarizations to all dPoW-protected chains. This informs each individual network that a successful notarization was completed and identifies which block was notarized.
At that point, networks will not accept any changes to a notarized block or any blocks that preceded it. After a notarization is completed, dPoW-secured chains cannot be re-organized beyond the most recently notarized block. In other words, the history of every chain using delayed Proof of Work (dPoW) security becomes totally immutable once a notarization is complete.
The entire dPoW process described occurs roughly every ten minutes. This provides a constant and extremely high level of security to all dPoW-protected chains. As such, hackers would need to overpower the Bitcoin network and the Komodo network in order to destroy the notarized block hashes before they could disrupt or alter any blockchain using delayed Proof of Work (dPoW) security.
Delayed Proof of Work (dPoW) as a Service
Newly-formed Proof of Work blockchains are often vulnerable to outside attacks because they have little hashrate to protect themselves. Komodo can help mitigate this risk with the delayed Proof of Work Blockchain Security service. This service is available to any UTXO-based blockchains.
Komodo's Blockchain Security Service is already demonstrating its functionality and efficacy. Six different blockchains are already receiving Blockchain Security as a Service from Komodo: GAME Credits, Kreds, Einsteinium, HUSH, SUQA, and GIN Coin.
There are many small- and mid-sized blockchain projects with plenty of potential, but also plenty of vulnerability. Komodo hopes to provide the protection necessary for these new projects—and the blockchain industry as a whole—to grow and prosper. Every project deserves the opportunity to succeed or fail on its own merit, without outside interference from malevolent actors.
However, it’s difficult for small blockchain projects to develop a network powerful enough to ward off attackers. Cryptocurrency mining on new blockchains is a risky allocation of resources, so many crypto miners prefer to put their machines to work on established blockchains. That way, they are more likely to see a return on their investment.
As more and more miners choose to mine reputable blockchains, like Bitcoin, larger networks are developing an insurmountable lead on hashrate. And a large hash rate is what ensures the security of a blockchain. Bitcoin, of course, remains the world’s strongest network.
The gargantuan power of the Bitcoin network is perhaps best understood by the amount of electricity it consumes. A study published by Dutch researcher Alex de Vries in May 2018 found that Bitcoin mining uses roughly the same amount of electricity as the entire nation of Ireland.
As of October 2019, the Bitcoin network's energy consumption has risen to over 70 Terawatt hours of electricity per year. That adds up to more than $400,000 USD worth of electricity spent on Bitcoin mining every single hour.
While the environmental concerns surrounding this quantity of energy usage are important, that discussion is outside the scope of this article. The point is that the Bitcoin network is insanely powerful and will not be surpassed at any point in the foreseeable future.
So rather than dedicating resources to increasing the hash rate of your own blockchain, why not simply recycle the enormous hashrate that the Bitcoin network already has?
That’s exactly what Komodo’s Delayed Proof of Work (dPoW) mechanism can do for you.
If you’re interested in partnering with Komodo to secure your blockchain with dPoW services, please contact us at [email protected].
Join us as we continue to protect the blockchain industry and accelerate the global adoption of blockchain technology.