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The advantages of the Dexon Consensus Algorithm, is Dexon better than Bitcoin?

The problems of low throughput, high latency, probabilistic finality in traditional blockchain systems make worldwide adoption of decentralized technology an unrealistic goal. DEXON Byzantine Agreement is the heart of the DEXON Consensus Algorithm and it enables high transaction throughput and fast deterministic finality. Moreover, the mechanism of cryptographic sortition implemented by the verifiable random function designed in DEXON Byzantine Agreement supports a large population of users to join the DEXON Consensus Algorithm.

DEXON Byzantine Agreement has two significant properties: responsiveness and network-partition tolerance, which respectively, are the solution to scalability and security. In terms of network-partition tolerance, if the network is disconnected (e.g., the cable is broken or cloud services shut down), the safety of the consensus still holds, and DEXON will operate normally once the network recovers, which we call it “partition-resilient.” In the case of the responsiveness of DEXON Byzantine Agreement, finality is reached under 1 second, which enables DEXON to support 10k TPS in our testnet as a showcase. In DEXON, the validators interact with each other as soon as the transaction messages arrive, thus the block confirmation time only depends on the actual network delay instead of any predetermined time bound.

In conclusion, high scalability and fast finality are achieved since DEXON Byzantine Agreement is responsive and network-partition tolerant.

Extreme High Scalability - High Sharding Capability

Single chain blockchain architecture is intrinsically unscalable due to its linearly blocking design. To further scale DEXON Network’s transaction processing power, sharding mechanism can be incorporated. By allowing multiple chains to work together in parallel, where each chain is treated as a shard, DEXON Network is able to achieve extremely high scalability.

Since, in each shard, the DEXON Consensus Algorithm generates totally-ordered blocks with consensus timestamps, merging consensus results among all shards becomes trivial. One can just sort all blocks among all shards using the consensus timestamp, achieving high scalability on the consensus layer. An illustration of how sharding in the DEXON Consensus Algorithm works is as shown in the figure. As DEXON also implements storage layer sharding and smart contract execution layer parallelization, the consensus layer throughput bottleneck is solved once and for all, making the entire system highly scalable.

Fast Finality

Bitcoin transaction confirmations can take hours while Ethereum transactions can take minutes; in other so-called next-generation proof-of-stake (PoS) blockchains, confirmations can take 14 seconds. The DEXON Consensus Algorithm achieves sub-second transaction confirmation finality because of its responsive Byzantine Agreement. Moreover, the transaction latency remains the same no matter how large the transaction throughput scales.

Low Transaction Fees

Bitcoin transactions cost an average of 30–50 USD per transaction around January 2018 and transaction fees are continuously rising. This can be attributed to the increase in mining costs and reduction in block rewards as the overall hash power in the network increases. Ethereum works the same way since they are both based on proof-of-work (PoW) consensus algorithms. The next generation PoS blockchains can reduce the costs of a transaction, but fees start to skyrocket when the network is congested. Due to the network’s low scalability, fees will eventually be substantially high when the network throughput is depleted. The DEXON Consensus Algorithm has the lowest communication overhead compared to all other consensus algorithms and it does not require its network to waste energy on solving PoW puzzles. The transaction fees will thus be negligible. In practice, we estimate the actual transaction fee for a typical token transfer on the DEXON Network can be lowered to 10-4 USD.

Safe and Secure - Double‐Spend Attack Resilience

The security of blockchain technology has been criticized recently due to double-spend attacks that occurred on BTG, MONA, and XVG. These blockchain systems are vulnerable to such attacks because their consensus algorithm is based on PoW, and the overall mining power in the network is not large enough to withstand a malicious party to launch a 51% attack.

Fairness - Front‐Run Attack Resilience
A block miner in typical blockchain systems can independently determine the transaction order within a block, launching a front-run attack. In some applications like decentralized digital asset exchanges, the front-run attack problem is serious because a malicious miner always has the option to perform arbitrage based on the transaction information it receives as a miner. This gives him a perpetually unfair advantage over other traders. On the other hand, no single mining node in DEXON can determine the transaction order in the DEXON Consensus Algorithm because the block proposer is decided through the fair cryptographic sortition implemented by a verifiable random function. No one can predict the block proposer. This is considered “truly fair”.

Decentralization - PoW Mining

In regards to the decentralization of blockchain systems, many people who believe in blockchain technology may argue that a decentralized network is better than a centralized one. This is a contentious topic in current mainstream blockchain systems. In PoW systems like Bitcoin and Ethereum, massive portions of the total network mining power are controlled by mining pools. These mining pools can easily collude and launch a 51% attack

DPoS Mining

In DPoS (Delegated Proof-of-Stake) blockchain systems like EOS or Cardano, a node’s ability to mine or to validate blocks is proportional to the number of tokens staked by a node. This asymmetric block producing and block validation power facilitates centralization. Moreover, most of DPoS blockchain systems adopt PBFT (Practical Byzantine Fault Tolerance ) as their consensus algorithm under the hood. Since PBFT consensus message complexity increases at a quadratic rate O(N) with the increase in the number of nodes N, the number of validator nodes cannot easily scale, leading to the inevitability of supernodes, making such system incapable of achieving full decentralization.

DEXON Proof‐of‐Participation (PoP) Mining

DEXON, on the other hand, adopts a symmetric design implemented in its PoP block mining the mechanism, in which every node has an equal probability of becoming a block producer at any time, and has equal validation power. Moreover, since DEXON adopts a state-of-the-art VRF-based cryptographic sortition algorithm to select a subset of nodes to produce and validate each block, the message complexity to reach consensus can be reduced from O(N) to, such O(N log(N)) that the number of validator nodes in DEXON Network can be scaled to a large number without introducing significant communication overhead, fostering full network decentralization.

Verifiable Random Function

All the users with enough DXN can be validators and join the DEXON network. Every hour, a small set of validators, called the notary set, is selected fairly to propose and verify the blocks. All the validators have equal probability to be chosen through cryptographic sortition. This mechanism allows DEXON to perform with high efficiency while supporting the participation of thousands of in the network at the same time.

Energy Efficiency

PoW blockchain systems require massive computation power for solving cryptographic puzzles, producing significant energy waste and potentially irreversible environmental implications. DEXON, on the other hand, achieves the highest level of energy efficiency since it has the lowest overhead in achieving consensus. The CPU and bandwidth overhead of theDEXON Consensus Algorithm is less than 1%.

Compatibility with Other Scaling Solutions

Sidechain and state channel techniques (so-called layer-2 scaling solutions) can work seamlessly with DEXON Network. While existing sidechain solutions can maximally provide throughput of several thousand transactions per second for each sidechain, the DEXON Consensus Algorithm can scale each sidechain to millions of transactions per second. State channel scaling solutions such as lightning network and hierarchical chain scaling solutions such as plasma network can also be incorporated with DEXON Network. TEE-based (trusted execution environment) off-chain scaling such as Oasis and off-chain secure multiparty computation framework such as Enigma can also adopt DEXON Network as a scalable and low-latency settlement layer. In the end, any layer-2 scaling technique must work with a highly scalable, fast finality, low-fee layer-1 blockchain system to ensure optimal performance.

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