Have you ever heard of Proof of Elapsed Time (PoET) ? It is one of the lesser known consensus algorithms. Therefore, chances are you don’t know how this algorithm works.
However, it is interesting to learn more about this algorithm. It is seen as one of the fairest consensus algorithms. More and more often we come across blockchains that use this algorithm.
In this article I explain step by step what Proof of Elapsed Time is, how this algorithm works and which blockchains use the Proof of Elapsed Time algorithm.
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- What is Proof of Elapsed Time (PoET)?
- Intel Corporation
- What is a permissioned blockchain?
- Benefits of PoET
- How does Proof of Elapsed Time work?
- How do you participate in Proof of Elapsed Time?
- Security of PoET networks
- Other consensus algorithms
- The difference between Proof of Elapsed Time and Proof of Work
- The difference between Proof of Elapsed Time and Proof of Stake
- Conclusion
What is Proof of Elapsed Time (PoET)?
Proof of Elapsed Time is a consensus algorithm mainly used by permissioned blockchains, such as Hyperledger Sawtooth. I will explain what permissioned blockchains are later in this article.
You can compare this algorithm with Proof of Work (PoW). However, the important feature of Proof of Elapsed Time is that participants are randomly chosen to add a new block to the blockchain . You can compare it to a kind of lottery.
Just like with Proof of Work, there are miners who validate transactions and add blocks to the blockchain. The PoET algorithm uses a randomly generated elapsed time to select the mining rights and block winners on the blockchain .
A reliable code is running at all times within a secure environment, which ensures transparency. Anyone can see and verify the results of the lottery.
Intel Corporation
In 2016, Intel Corporation (the famous chip manufacturer) came up with Proof of Elapsed Time. Along with Linux Project and IBM, Intel sponsored the Hyperledger Sawtooth. This is a blockchain development company that uses an open-source BaaS (Blockchain-as-a-Service) platform.
It is not the only time that Intel has shown interest in blockchain projects. The company has spoken out about this technology before, and sponsors several companies and projects that deal with blockchains and cryptocurrencies . Not surprising, because the company naturally earns a lot from the chips that are used to mine crypto, such as Bitcoin (BTC) .
The video below explains more about Hyperledger Sawtooth.
What is a permissioned blockchain?
A permissioned blockchain is different from a public or private blockchain. With a public blockchain, anyone can participate in the network. You do not need permission first for this.
A private blockchain is closed off from the outside world and is mainly used internally. Think, for example, of organizations, governments or companies that want to store information on a blockchain. All participants of a private blockchain are managed by the owner of the blockchain.
Permissioned blockchains have an extra layer of control. This checks which role someone has or may be given, and what someone can do from his role. This gives you different actors within a network that all perform different tasks. This is a way to provide extra security for blockchains.
Benefits of PoET
Proof of Elapsed Time is very similar to the well-known Proof of Work algorithm. However, it differs in one crucial point which provides two major advantages .
Miners who are allowed to add a new block to the blockchain are chosen at random. This means that every miner has equal opportunities. They are not chosen based on how much computing power they can provide, or how much money they can stake.
Proof of Elapsed Time is therefore a very fair consensus algorithm. It is also seen by many people as the fairest algorithm for blockchains.
Another advantage is that much less power is required for this algorithm to work. With Proof of Work, miners are all put to work at the same time. Then there is only one miner who is allowed to add a block to the blockchain. This causes a lot of power to be lost.
Because Proof of Elapsed Time selects miners in advance, there is only one miner who is busy validating transactions and adding blocks to the blockchain.
How does Proof of Elapsed Time work?
Before you can participate in a PoET network as a node, you will first have to identify yourself . This way the network knows who they are dealing with. When someone does not participate well within the network, they can ban this person from the network forever (because they have the official identity).
The PoET algorithm generates a random time for each node . Each node must then go to ‘ sleep ‘ until this randomly generated time has elapsed. After the time is up, the node is allowed to add a new block to the blockchain.
This means that nodes with the shortest times wake up first, and are allowed to add a new block to the blockchain . Because this time is generated completely randomly, it is a fair algorithm. You cannot influence this time by offering more computing power or stake .
This process is repeated for each new block. This means that as a node you continuously get a new ‘sleep time’, and every time you get a new chance to be the first to add a new block to the blockchain.
The video below explains what Proof of Elapsed Time is. We recommend that you watch this video if you would like to learn more about this consensus algorithm.
How do you participate in Proof of Elapsed Time?
Participating in a PoET network is different from participating in a blockchain network that uses Proof of Work, or another consensus algorithm. A node will need to complete the following steps in order to participate successfully .
- First you will have to have a node download the PoET code on a blockchain’s website. A special participation key is also generated here for the code to use SGX.
- The node sends its key to the network asking to join the network. The other nodes in the network will check and verify the key, after which a node is allowed to join the network.
- Each node has its own time variable, which contains the time that is randomly assigned to each node in the network. SGX ensures that the time is really random and cannot be influenced by outside actions.
- When all nodes have been given their own time, the ‘draw’ starts. The node whose time runs out first is the winner. This node is then allowed to create a new block and add it to the blockchain. If this is successful, the node receives a reward for this. This is usually in the form of tokens or crypto coins.
Security of PoET networks
In the steps above you have read that a node must first be accepted by the other nodes within the network. Therefore, PoET is also an algorithm used for permissioned blockchains .
I was also talking about the SGX. This stands for Software Guard Extension , and it is a tool developed by Intel in 2015. This tool allows managing the authentication of nodes. First it creates a special key, which makes the code inaccessible to others who do not have this special key. Similarly, nothing can happen to the ‘randomness’ of the generated times.
Other consensus algorithms
Besides Proof of Elapsed Time, there are of course many other consensus algorithms that are used by blockchains. In fact, PoET is one of the lesser-known consensus algorithms in the blockchain world. Below are some other consensus algorithms. Do you want to learn more about some algorithms? Then click on the name to go to an article about the algorithm.
- Proof of Work (PoW)
- Delegated Proof of Stake (DPoS)
- Proof of Stake (PoS)
- Proof of Burn (PoB)
- Proof of Capacity (PoC)
- Proof of Authority (PoA)
- Delayed Proof of Work (DPoW)
- Proof of Participation (PoP)
The difference between Proof of Elapsed Time and Proof of Work
In several respects, Proof of Elapsed Time can be compared to Proof of Work. Both algorithms use miners who add blocks to the blockchain and receive a reward for this .
In most cases, this reward consists of blockchain native tokens.
However, the main difference between these two algorithms is that miners within a PoW network compete against each other to be the first miner to validate all transactions. To be the first miner, they will have to provide a lot of computing power. This not only costs a lot of power, but also a lot of money for the purchase of the best and latest hardware.
With a PoET network, the miners are selected in advance, and they do not have to compete against each other to be the first miner, as is the case within a PoW network.
Proof of Elapsed Time is therefore a lot more sustainable than Proof of Work in this respect. It also costs participants less money, because they do not have to purchase new and expensive hardware to be able to add new blocks to the blockchain.
Do you want to know more about Proof of Work? In the video below from AllesOverCrypto, Matt explains what PoW is and how it works.
The difference between Proof of Elapsed Time and Proof of Stake
There are also several similarities between Proof of Elapsed Time and Proof of Stake. Within both algorithms, miners/validators are selected in advance. However, the way this is done is different.
Within a PoS network, validators will have to wager (stake) money. The higher the stake, the higher the chance that they will be chosen to add a new block to the blockchain . When a validator does not do his job properly, a fine is imposed which is paid with the stake. It is also possible that a validator loses his entire bet.
Miners are also selected in advance within a PoET network, but not based on a stake. They are selected completely at random . This gives miners a much fairer chance of adding a block. It is no longer just for the rich, as is the case with PoS.
When a miner does not do its job properly, it can be removed from the network and blocked . Miners have to identify themselves, making it quite easy to exclude certain people from participating in the network in the future.
Conclusion
One of the lesser known consensus algorithms is Proof of Elapsed Time. This algorithm is mainly used within permissioned blockchains, and randomly selects miners . This allows you to compare this principle to a kind of lottery, so that every node has a fair chance to add new blocks to the blockchain.
For every new block a new ‘draw’ takes place. Miners are assigned a randomly generated time. Then all miners go to sleep, after which the miner with the shortest time wakes up first. This miner is then allowed to add a new block to the blockchain.
You can compare this algorithm with Proof of Work and Proof of Stake, but Proof of Elapsed Time still has two major advantages over consensus algorithms such as Proof of Work and Proof of Stake:
- PoET is fair – miners are not chosen based on the computing power they can provide or the amount of money they can stake.
- PoET is sustainable – miners are chosen before mining, so only one miner per block is engaged in providing energy.
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Header photo by Min C. Chiu
