The Matrix platform utilizes a unique, hybrid PoW+PoS consensus model which provides the perfect balance of scalability and decentralization.

As blockchain technology continues to progress into the next stage of development, battles over consensus models are seemingly becoming all the rage these days. This has been made increasingly apparent as Bitcoin’s PoW (Proof of Work) system draws heavy criticism from the media and environmentalists for its over consumption of energy and computational power. This outcry has led other platforms to adopt other systems such as PoS, citing that they are a greener and more efficient approach to the PoW issue. Unfortunately, with the introduction of these models comes a new wave of criticism further adding to the consensus wars. These will be introduced later on.

The Problem:

For a more greener and efficient approach at governance, numerous platforms have adopted Proof of Stake consensus models in varying forms. The issue that stems from this however is the conundrum of sacrificing decentralization for scalability. For a refresh on how PoS (Proof of Stake) works In a practical non technical sense, PoS is essentially people, or a group of people who form a consensus on node validation, with this comes payment as a reward. In simpler terms, a person validates block transactions according to how many coins he or she possess in a select wallet.¹

The common point of criticism these PoS systems face is that there typically is only a small group of people acting as validator nodes, these nodes are also small in number (Remember, less nodes equals more scalability). The outcome of this is that a small number of people can essentially secure majority control over these nodes, thus tearing out decentralization. This fuels the fire of the never ending battle of ideas regarding consensus. In the end, we are trapped in a samsara where we are faced with two questions… Do we continue carrying the banner of Nakamoto’s philosophy of a new, decentralized system? Or do we surrender decentralization for scalability to achieve the end goal of mass adoption? Luckily for the blockchain industry, Matrix’s consensus encompasses both of these philosophies in a balanced and intuitive manner.

Below will be a general review of the most common consensus issues many of today’s biggest platforms face. Following this will be an introduction on how Matrix improves on these shortcomings, proving that it has created the most optimal consensus model in the blockchain space to date.

Bitcoin

It is now to no surprise when we see articles criticizing Bitcoin’s energy use. Despite being digital, Bitcoin’s growing appetite for energy is becoming a very real issue. In fact, Bitcoin has been found to use as much energy as Ireland. By the end of 2019, energy used for the Bitcoin mining network is estimated to become greater than the energy produced by all of the world’s solar panels combined.¹

The bottom line? Though there are some people who insist that the large amounts of energy required for bitcoin mining acts as a mechanism to deter bad actors or certain levels of corruption, the case against bitcoin’s ever-growing appetite for energy is becoming stronger. Any asset whether digital or not should face scrutiny if their environmental costs begin to grow out of control.

Ethereum

As you might be aware of by now, Ethereum has decided to ditch the PoW consensus model to adopt the arguably more appreciated PoS model. While this greener alternative does offer some enhancements, it was not immune to criticism from the community. Among the primary points of criticism the Ethereum PoS model faced was that the threshold to stake needed to be around at least 1000 eth (according to Vitalik). Alternatively, one could also opt to join a staking pool.

The Problem? Ethereum holders are expected to hold north of 1000 eth, given the current and future price of the coin, this would make staking available to the fewest, most wealthy holders of the Ethereum coin. This enters us into the on going samsara over scalability vs. decentralization. In the end, this begs the question, how would you feel if the world’s future main blockchain was governed by a select few people? If Ethereum is to be the main blockchain platform of the future, it would certainly be worrisome to know that influence over the network would be granted to only a few people.

Lisk

If you have ever been involved in the Lisk community, you know its number one point of scrutiny is with hyper centralization. Lisk uses a DPOS model where people vote for delegates they either feel can improve the Lisk ecosystem and/or be able to act successfully as a validation node. Within the Lisk ecosystem however, delegates band together to hyper centralize the Lisk DPOS system, making it arguably among the worst examples of centralism in blockchain consensus models.¹

Lisk Elite Rules for Delegates (members) and voters.

In brief detail, the Lisk system is plagued with a hyper centralized bipolar system of governance. When you learn about how to vote in the Lisk ecosystem, you are encountered with two primary factions of delegate staking pools, these factions require you to vote for all of their selected members in order to receive a reward. These two factions pay roughly the same rate when you vote for all of their members, this enables them to pay the voter a standard low rate and remain unchallenged. This results in a seemingly unstoppable and corrupt two party system that has unmatched control over the Lisk ecosystem. Paying minimal rates, while not playing an active role in progressing the Lisk ecosystem, shows that the best interest of the community is not a priority.¹

SIDE NOTE: This issue is prone to most if not all DPOS systems including ARK.

EOS

EOS is another system that uses the DPOS model. Despite being days from mainnet launch, EOS is already displaying huge warning signs of DPOS style centralization. EOS has 21 supernodes, the majority of these supernodes are mainly split between the U.S and China (Korea taking third place). One of the key points of interest is the fact that China, despite being largely unsupported by the developer community, is tied with the U.S in supernodes possession. It is a surprise that China has more supernodes than Korea despite Korea having a larger EOS exposure, plus, vastly larger volumes among Korean exchanges. To top it off, EOS has never even held an official event in mainland China thus far. The other key point of interest is the massive reward for supernodes, which range at approximately $400 million a year. With these factors in the equation, this situation is arguably a recipe for disaster regarding the legitimacy of DPOS. (More info here)

Alliance between a Chinese investor and 8 block organizations.

To further illustrate these warning signs, this article (Google translate for English) highlights the potential issues EOS’s DPOS system faces along with the ongoing geopolitical battle already being waged within the system. The article suggests that due to the lack of Chinese support from the developer community, as well as fierce competition from South Korea, “China’s EOS super node candidates invented a new strategy: bribery”. The article explains the situation quite frankly, “At first glance, Bribery election does not seem to bring about any harm, but in fact, it may lead to the collapse of the entire EOS ecosystem.” Along with vote buying, the other factor mentioned was the formation of alliances. If you remember the bipolar system of governance within Lisk, we can rest assure that EOS voters wont be happy if the main actors don’t contribute their fair share to the EOS ecosystem. Lastly, we must understand one thing, this fault does not stem from the technology of EOS as the article puts it, rather, it is an issue stemming from the entities involved within the EOS DPOS ecosystem. (Additional News here)

NEO

2017 was a big year for NEO, the rebranding brought it much exposure along with a significant increase in market cap as well as increased social media traffic. It arguably set a benchmark in scalability among the many platforms, holders of NEO also enjoyed the gas dividend rewards, further adding to its popularity. Unfortunately, in March of 2018, NEO’s consensus model, “DBFT” saw its first wave of criticism when one of the seven validation nodes went offline, crippling the network. Following this, criticism and uncertainty about the governance of these nodes ensued. What many people learned from this occasion, was one of NEO’s largest potential flaws, centralization.

The Problem?

One of the lesser known details of the NEO ecosystem that was brought to light by the node failure was that the NEO foundation controlled all seven validation nodes, making it among one of the most centralized platforms in the blockchain space.

If more than one third of the nodes go offline, consensus cannot occur and the blockchain will effectively shut down. NEO currently has 7 validation nodes, which means that no more than 3 of the 7 nodes can go offline at any time.¹

This unipolar system of governance turned out to be incredibly unpopular with many NEO fans, so much so that the NEO foundation decided to give some of the nodes to the CoZ (City of Zion), NEOs top development community. One of the requirements of the CoZ node host was to accept legal liability. This agreement is what CoZ sees as “decentralization”, the simple fact however, is that this is a formal agreement between two entities, one of which having extremely close ties to the foundation. This is not a truly decentralized model.

ENTER THE MATRIX: How Matrix Improves The PoW System

The Matrix white paper underlines the problem of Bitcoin’s PoW clearly, “Perhaps the most criticized part of cryptocurrency is the “waste” of energy in the mining computations. Although it is essential to attach physical value to cryptocurrency, the mining process does not make any sense outside the world of digital currency. The problem is even worse when now over 70% of the total computing power around the world is dedicated to mining Bitcoins and other cryptocurrencies.”

The Solution:

Matrix’s Chief AI scientist Dr. Deng explains, that by using AI, one could leverage the processing power put forth by Bitcoin’s proof of work into other fields outside of cryptocurrency. This model is exactly how Matrix’s PoW system will work with the utilization of Bayesian mining and Markov Chain Monte Carlo (MCMC) computation. In a nutshell, the processing power used in Matrix’s PoW can power its AI engine for Smart contract auditing as well as blockchain custodial tasks for optimization. Outside of the blockchain, this processing power can be utilized for many different industries, some examples being in the fields of gene regulatory networks, clinical diagnosis, video analytics, and structural modeling.

FUN FACT: Matrix is currently working with the Beijing Cancer Hospital, the 301 Hospital and a number of other first-line hospitals in China to help with AI assisted pathological diagnoses.

Matrix’s innovative PoW model sets a new standard for the blockchain industry. For the first time, a platform has finally utilized a proof of work system that bridges the gap between digital currencies and the real world.

ENTER THE MATRIX: How Matrix Improves the PoW/PoS System for decentralization.

In a brief and general description for simplicity, we can imagine Matrix’s PoW/PoS system being ran by two types of nodes, delegate nodes and lesser nodes. In this model, the delegate nodes (akin to a masternode) are in charge of the PoW and the lesser nodes (comprised of various smaller, non masternode nodes) partake in the PoS and are in a cluster with the delegate node. The Matrix system has it so that during every block cycle (10–60 minutes or so), the delegated nodes switch with a new set of delegated nodes via AI randomized selection.

How does this fix the problem of centralization?

If you managed to read much of the above section, you will find that centralization appears to occur when certain entities seize control over the governance model, when a foundation controls the nodes or shares with a close organization of the foundation, and/or when nodes achieve a point where they become unchallenged in the system. Because nodes are constantly changing in the Matrix model, no large entity can always be chosen for delegation, therefore, complete centralization cannot occur in the Matrix consensus model.

Conclusion

Matrix’s innovative consensus model is groundbreaking as it not only provides a purposeful solution to the PoW model, but also encompasses a healthy balance between scalability and decentralization, making it’s consensus model a benchmark for future projects to look towards for scalability and decentralization.