Prospective Hybrid Consensus for Project PAI

TL;DR

This paper proposes a hybrid Proof-of-Work and Proof-of-Stake consensus mechanism for PAI Coin to enhance security against vulnerabilities like 51% attacks, supported by technical and economic analyses.

Contribution

It introduces a detailed hybrid PoW/PoS consensus model for PAI Coin and analyzes its security and economic implications.

Findings

Hybrid consensus reduces vulnerability to 51% attacks.

Technical analysis compares PoW, PoS, and hybrid models.

Economic analysis supports hybrid model's security benefits.

Abstract

PAI Coin's Proof-of-Work (PoW) consensus mechanism utilizes the double SHA-256 hashing protocol-- the same mechanism used by Bitcoin Core. This compatibility with classic Bitcoin-style mining provides low barrier to entry for PAI Coin mining, consequently rendering the PAI Coin network vulnerable to so-called 51% attacks, among others. To mitigate such risks, this paper proposes a hybrid Proof-of-Work, Proof-of-Stake (PoS) consensus mechanism and provides a detailed technical analysis of how such a mechanism would counter some of the PAI Coin network's inherent vulnerabilities, if successfully implemented. A detailed technical outline of blockchain-based PoW & PoS consensus, including their advantages and disadvantages, when used both independently and in the context of the hybrid model, is provided. An economic analysis of attacking a hybrid-powered PAI Coin network is presented, and a final recommendation for future development of PAI Coin consensus is made.