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The use cases of blockchain have crossed the domain of cryptocurrencies and initiated the foundations for new software applications. As the load of decentralized apps on blockchain networks continues increasing, transaction throughput performance is a vital aspect of research and development. The Proof of History algorithm, or POH, has emerged as one of the prominent solutions for driving improvements in transaction throughput. 

Proof of History has been introduced on the Solana blockchain as a Verifiable Delay Function for incorporating the concept of time in blockchain networks. The innovative design of Proof of History explained new perspectives on improving transaction speed alongside presenting prospects for working with other consensus algorithms. The following post offers an introduction to Proof of History and discusses its significance for the blockchain ecosystem.

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What is Solana?

Solana is a layer 1 blockchain network on which developers could create another layer 2 networks. Some examples of layer 1 networks are Bitcoin and Ethereum. Why do you need to learn about Solana in a discussion on Proof of History? Solana blockchain introduced the Proof of History consensus approach in combination with the Proof of Stake consensus mechanism. Solana blockchain has many similarities to Ethereum, such as the facility of a native token, i.e., Sol. 

In addition, Solana also features a distributed machine for the execution of smart contracts and interaction between dApps and the blockchain. Furthermore, Solana has emerged as a prominent competitor of Ethereum with new, innovative ideas for its blockchain architecture. The necessity of learning about a Proof of History blockchain like Solana is evident in the facility of a comprehensive environment for on-chain application development. For example, Solana introduced more than 5000 NFT protocols in 2022. 

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Definition of Proof of History 

The functionalities of Solana create curiosity regarding “what is Proof of History” and how it is different from other consensus mechanisms. Consensus algorithms are a fundamental trait of blockchain networks and differentiate one blockchain from the other. Proof of History is a new feature in the Solana blockchain that can help in lowering transaction costs and ensuring faster transaction processing. The consensus mechanism offers a cryptographic method for proving the timeline of transactions alongside identifying the events in the concerned timeline. 

The Proof of History consensus mechanism can be implemented in unison with other consensus approaches such as Proof of Stake and Proof of Work. As a matter of fact, the POH consensus is responsible for improving the efficiency and resilience of Proof of Stake on Solana. In addition, Proof of History also guarantees effective decentralized security for blockchain protocols

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Working of Proof of History 

The answers to ‘how does Proof of History work‘ would draw attention toward the primary objective of the consensus mechanism. As the rate of communication increased significantly, the concept of standardized time emerged as a mandatory necessity. For example, computers and smartphones would check with a centralized clock for connecting to the internet to ensure the accuracy of internal clocks. How can you introduce the concept of time without a centralized clock in decentralized systems such as blockchain networks? The time problem is quite critical in the case of distributed systems. 

Blockchain networks could achieve faster transaction processing only by timing the transactions in small units. Why would you need a Proof of History algorithm when you have such solutions? Most of the programmable blockchains, such as Ethereum, depend on external programs for assigning median timestamps. 

The median timestamps help in the validation of transactions in the exact order in which they were registered on the blockchain network. However, the use of a centralized source with median timestamps contradicts the principles of decentralized systems. Proof of History resolves the problem by enabling direct integration of timestamps on the blockchain network. The core element in POH consensus refers to the Verifiable Delay Function or VDF. 

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Verifiable Delay Function

The Verifiable Delay Function or VDF is a mandatory highlight in guides on Proof of History explained for beginners. Block producers must pass through the VDF to access their desired slot for block production. Solana implements the VDF by incorporating data in the transaction sequence by following a new approach. Solana blockchains append the hash of data related to previously generated states for inserting data in the transaction sequence. The process helps in publishing input data, count, and state of the transaction without any scope for recreation of the data or alternative versions. 

The incorporation of data helps in creating an upper time limit, and the capability of Proof of History for referencing previous hashes enables lower time limits. An important highlight of VDF in “how does Proof of History works” would refer to how it does not offer a precise time estimate for transactions in a sequence. On the contrary, it can showcase the exact instance in the past and future of a significant event of the global state machine when a transaction occurred. 

Block producers can implement the VDF locally by leveraging a SHA256 hash function. The hash function offers almost real-time integration of VDF functionalities and serves as a major standard for majority of chip manufacturers. The ability to track time on a blockchain could help in identifying the time when specific events occurred during its examination. 

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Understanding the Working of Proof of History

The working of Proof of History is simple and easy to understand. However, the technical jargon could serve some challenges for beginners in familiarizing themselves with the concept. A Proof of History blockchain relies on the creation of timestamps for proving the instance when a block was created on the blockchain. 

For example, an individual visiting a competition at the Olympic Games and taking an image of the event could prove that the photo was taken during the Olympic Games. It proves that the image was taken within a specific time. In simple words, Proof of History helps in creating a historical record of transactions that prove that a particular event takes place at a particular time.

The SHA256 hash function is an important aspect in answers to “How do you implement Proof of History?” and explanations for Proof of History. Solana blockchain uses the SHA256 hash function for hashing all events and transactions on the blockchain. The function receives input and generates a unique and unpredictable output. Subsequently, Solana takes the transaction output and leverages it as inputs for the next hash. 

Now, the sequence of transactions is integrated into the hashed output. The hashing process helps in creating an extended and seamless chain of hashed transactions. As a result, you can have a verifiable and transparent transaction sequence added by validators to a block. Without depending on a conventional timestamp, validators could check the time which has passed in the hashing process.

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How does Proof of History Support Eventual Consistency?

The introduction to ‘what is Proof of History‘ must also emphasize highlights such as eventual consistency. Proof of History is a type of cryptographic clock. It works by using timestamps for transactions with a hash that could showcase when the transaction was validated. As a result, the whole blockchain network could turn its attention away from the sequential verifications of transaction claims. On the contrary, Proof of History turns the limelight on the reconciliation of the existing global state of the blockchain. 

The effectiveness of the Proof of History algorithm in enabling fault tolerance in the network depends on the formidable mechanism for ensuring eventual consistency. The assurance of eventual consistency offers safety against unprecedented changes due to large network partitions. Nodes would depend on the structure or state of the system for enforcing transaction ordering. As a result, the nodes could contribute more resources for efficient block processing alongside the inclusion of validated blocks on the distributed ledger

Solana also leverages the Proof of History consensus mechanism for offering safeguards against Byzantine fault tolerance issues. The new consensus approach avoids the problems arising due to malicious behavior of group members participating in consensus. 

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The Railroad Analogy

Another interesting highlight in the introduction to the Proof of History algorithm points at the railroad analogy described by the Solana blockchain. The railroad analogy or example for Proof of History proves how you can validate information faster with awareness of the precise time of transactions. The example involves a person sending an urgent letter on a train that travels from New York and reaches Chicago at 5 pm. On the way, the train would stop at Philadelphia, Pittsburgh, and Cleveland. Considering the importance of the letter, the sender must verify the identity of the train at every stop. 

In the case of other blockchains, you would need substantial time and resources to determine information correctness at each step. For example, the station attendant at the last stop must check with his counterparts at previous stations to check that it is the train that carries the letter. Without any mark on the letter, the train is the only marker for ensuring that the letter reaches its destination. References to a centralized schedule can cause discrepancies in the whole process due to inaccurate information, leading to delays.

The answer to “How do you implement Proof of History?” in the Solana blockchain proves its efficiency in solving the railroad analogy. In the case of the Solana blockchain, the letter would receive a stamp on every stop alongside details of arrival times. When the letter reaches Cleveland, it would have stamps from New York, Philadelphia, and Pittsburgh. The station attendant at Cleveland could stamp the letter without asking the other station attendants. As you can notice, the Solana blockchain could use Proof of History to save a significant amount of money and time. 

How Does Solana Combine Proof of History with Proof of Stake?

Solana blockchain requires a consensus mechanism other than Proof of History, and Proof of Stake is the right candidate. However, the validators in Solana Proof of Stake validate transactions for blocks signed by Verifiable Delay Function. The VDF takes inputs and creates unpredictable outputs without actual operations of the function. You can understand how Solana combines Proof of History consensus with Proof of Stake in the lower block validation times. 

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Bottom Line 

The detailed introduction to ‘what is Proof of History‘ alongside its work offers clarity regarding its potential. It is an innovative consensus mechanism that can transform the performance benchmarks for layer 1 blockchain networks. The increasing demand for blockchain-based applications requires networks to offer faster throughput performance to avoid unwanted verification delays. The Proof of History mechanism on the Solana blockchain has offered a simple solution for faster and cost-effective blockchain transactions

It helps in proving the exact instance when a transaction occurred with reference to the state of the blockchain network. Solana blockchain uses the Verifiable Delay Function for optimizing the use of time in blockchain networks. The conceptual theory underlying Proof of History offers credible advantages for expanding the blockchain system with innovative use cases. Learn more about Proof of History and Solana fundamentals in detail now.

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*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!             

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