Post
Topic
Board Altcoin Discussion
How proof-of-loss addresses the “nothing at stake” problem
by
mirelo
on 06/02/2017, 21:18:13 UTC
How does proof-of-loss address the “nothing at stake” problem?

  • Transferring money requires transaction rights, which cost fees.
  • Each transaction consumes hence loses exactly as much in rights as its total size in bytes.
  • The spendable outputs of each transaction represent that loss.
  • The odds of chaining a block depend on the loss each of those outputs represents.
  • The reward for chaining each block is transaction rights instead of their price (in fees).
  • This reward is only saleable (for fees) in subsequent blocks.
  • If the same spendable output tries to chain two different blocks at the same height, then its earned rights are inherited by the spendable output chaining a child of either block.

This algorithm forces people to serially rather than parallelly chain blocks (“forcibly serial chaining” in the paper).