What is Proof of History?

Timestamping data plays a vital role in any database since it indicates the sequence in which data has been entered. Centralized systems rely on central clocks that maintain a consistent time across entire networks, ensuring the accuracy of timestamp data.

In decentralized systems, timestamp data is just as critical to sequencing and, as such, the integrity of the blockchain ledger itself. However, a blockchain network doesn’t have any universal clock.

Further, time data isn’t generated as part of the transaction in the same way as datapoints such as sending or receiving address or transaction amount. In legacy blockchains like Bitcoin and Ethereum, the miner or validator assigns the timestamp at the point the block is produced since this is the point at which the transaction is considered confirmed.

However, if the timestamp is wrong, it could affect blockchain security. If a miner or block validator could timestamp a block far enough into the future, they could orchestrate a double-spend attack. In blockchains such as Bitcoin, which vary the mining difficulty based on the time taken to mine each block, the ability to manipulate timestamps could also fool the difficulty algorithm.

To prevent such manipulation, blockchain networks operate timestamping protocols, which impose rules designed to ensure a minimal margin of error in time data and which limit the opportunity for manipulation.

So, while timestamp attacks are relatively hard to execute, timestamp validation and consensus create work for the blockchain network, contributing to the overall challenge of blockchain scalability.

Proof of History was developed by Solana Labs for the Solana blockchain as a way to remove the need to reach consensus over time stamps. In doing so, Proof of History enables faster transaction processing on Solana.

How does Proof of History work?

Proof of History uses a cryptographic function known as a Verifiable Delay Function (VDF) to significantly reduce the effort involved in confirming the timestamp of a block.

A VDF is similar to the cryptographic puzzle used in the Proof of Work (PoW) algorithm, where a node must use computational power to solve the function. However, unlike PoW, a VDF cannot be solved any more quickly by using more computing power. This means it takes the same amount of time to solve on each occasion, regardless of who solves it.

The hash output of each VDF serves as the input for the next one, and the result of the VDF is embedded in each block. Since the VDF is quickly verified, anyone can easily calculate the time that has elapsed between any given two VDFs.

By substantially reducing the network load associated with timestamp validation, PoH supports far higher throughput than legacy blockchains do. Furthermore, the ability to consistently verify block time without relying on network consensus enables Solana to support parallel processing of transactions, further enhancing blockchain scalability.

Limitations and challenges of Proof of History

Proof of History is designed for the authentication of time data. As such, it operates as a pre-requisite to participation in Solana’s consensus.

Once the VDF generates the PoH hash, it must be voted on by Solana’s validator network. Each validator is required to stake SOL in order to vote on the validity of the block with its assigned PoH hash. If a validator is found to vote on a minority fork with an invalid hash, their stake is slashed, or destroyed.

Solana calls this element of its consensus “Tower Byzantine Fault Tolerance” and it’s designed to ensure that collaborators cannot collude to cheat PoH as the network clock.

Further, the staked votes on a particular fork are aggregated in a stack – or tower – which increases the economic implications of rolling back the blockchain over time as more blocks are added. Once a fork receives a supermajority of validator votes, it is considered immutable, enabling Solana to offer fast finality compared to other blockchains.

Solana also operates a Proof of Stake (PoS) mechanism to determine validator participation. Those who stake the most in the validator staking pool have the largest chance of being selected for the next block. Those holding SOL who wish to participate in block rewards can delegate their stake to a validator in the pool.

Solana’s multi-layered consensus introduces significant complexity to the ecosystem. The VDF function used in Proof of History is resource-intensive, meaning that Solana validators must run powerful hardware. Combined with the large amounts of staked SOL needed to qualify as a validator, the barriers to network participation are high.

Proof of History essentials

• Pioneered by Solana Labs, Proof of History offers a way to sequence blockchain data without relying on consensus over timestamps.
• Proof of History uses a cryptographic primitive called the Verifiable Delay Function, which takes a fixed amount of time to solve, creating an immutable chronological sequence of hashes which are appended to blocks.
• Proof of History is one component of Solana’s broader architecture, which also operates consensus protocols for validator selection and block validation.