Blockchain has had a knack for making the headlines recently, mainly due to a dramatic surge in interest for cryptocurrencies such as Bitcoin and Ethereum. According to Insider Intelligence, more than 34 million US citizens now hold digital currency. Whether these individuals own digital assets as a speculative investment or for a specific use case (such as payments), it would be fair to presume that the vast majority of them do not have a thorough grasp of the technology upon which they are built.
At its core, blockchain is ultimately designed to function as a decentralized, secure, and scalable distributed public ledger. To accomplish this, the blockchain employs a consensus mechanism, which is used to ensure that all nodes on a network are synced and that its transactions are authentic. In addition, such consensus mechanisms are required for blockchain networks to guarantee that all nodes are linked to the same system and that all transactions are confirmed regularly.
At present, the most prevalent consensus mechanisms in the blockchain industry are proof of stake (PoS) and proof of work (PoW). Yet, while both of these systems fulfill their primary use cases adequately, they are often suboptimal in several facets, particularly when it comes to decentralization, security, and interoperability. Fortunately, a solution looks to have been developed by Analog through its innovative new proof of time consensus mechanism built upon its Timechain.
What is the Timechain?
Timechain is a revolutionary blockchain network invented by Victor Young, founder of Analog after he uncovered a variety of inherent flaws while working on algorithmic trading (algo-trading) bots in the DeFi industry. In a nutshell, Timechain is a blockchain in which incoming time data from participants, or nodes, is authenticated before being hashed, resulting in a searchable hub of immutable time data.
However, rather than the typical PoW or PoS mechanisms, Timechain relies on a proof-of-time consensus, which achieves a much greater degree of decentralization and scalability than the aforementioned mechanisms. So, how does it work?
Well, without getting too technical, the PoT consensus mechanism provides a fairer system when it comes to designating validators on the blockchain. While PoS and PoW can be compromised by individuals with extensive resources (such as those with excessive computational power or staked coins), Timechain events are not exposed to the same level of manipulation. This is achieved through what is called a “ranking score” and a “fixed stake.”
Validators are given a weighted score based on how accurately they validated node data in the past. Think of it as a performance rating that signifies how good each validator is at doing its job. The fixed stake aspect of the Timechain means that there is a predetermined number of tokens needed to become a validator. Having more than this amount does not increase the likelihood of participating in the consensus process. Therefore, any node can act as a validator if it has staked the required quantity of tokens and accumulated a ranking score.
As a consequence, the Timechain becomes a universal ledger consisting of validated time data that proves that what happened in the past actually occurred, providing a more secure and decentralized framework.
Use cases of the Timechain universal ledger
Due to its unique approach to block validation, Analog’s Timechain offers a plethora of use cases across multiple industries. First off, the Timechain can be utilized to improve various DeFi processes, such as trading, lending and borrowing, yield farming, and cryptocurrency funds. For example, the Analog network can help users determine the appropriate time to lock up their funds for maximum return on investment (ROI) since it can accurately capture the correct signals on the blockchain and feed the signal to yield farming protocols.
Timechain also has uses across the Metaverse and NFT industries thanks to its high level of interoperability across multiple DApps and cross-chains. As a result, Analog’s Timechain is one of the most versatile, decentralized, and secure blockchain networks in the crypto space, and it will be interesting to see what role it will play in the coming years.