“What’s good Snipe?! As Nyzo is an open-source initiative, what is your role and affiliation with this project?”

I’ve been inspired by the work of the anonymous developers who have been actively developing Nyzo for the last 16 months and have helped out where I could in the activity of community building, developing small applications or scripts, and writing multiple articles explaining the inner working of the system for different audiences to understand what the project has to offer.

My personal impression of the odds of the project ‘making it big and succeeding’ was not as big 12 months ago as it is today. Regardless, I don’t do wishful thinking nor stick my head in the clouds. But if there’s something I can do to help this micro-economy grow into one of a bigger scale, I do it.

To see the odds increase on the weekly is nice but no reason for euphoria.

The decision which the developers have made in regards to forfeiting the entire developer fund to a cycle controlled ‘war chest’ (worth 30 million dollars at the time of writing) makes it all the more exciting. Businesses and individuals can write a proposal to do something for the ecosystem and get rewarded if 51% of the network votes for them to receive an amount of Nyzo from the cycle fund.

Such a governance perk is not something many cryptocurrencies can brag about, but it’s one with a lot of potential — and makes me all the more excited to help out.

“Nyzo’s codebase is built up from scratch, why is that so important?”

Rather than basing your project on something which someone else has built, the developers went out of their way to start from scratch. It may be foreign to someone who doesn’t code that this is no simple task. Nyzo does not rely on any libraries beyond Java and every core element of the system has been carefully architected into the whole.

All in-cycle verifiers come to their own conclusion as to the current state of the network, the cycle candidates, block votes, cycle size, block rewards and so on. It’s important to have a decentralized system work in this manner, as it does not rely on any form of authoritative entity.

“During the past years, several consensus mechanisms other than POW were introduced, what makes the Proof-of-Diversity mechanism Nyzo uses so different?”

What’s most exciting about Proof of Diversity is that the way in which the consensus mechanism is architected allows for a lot of the classical problems ‘to be solved’ at once. Everything in the system is based on the democratic voting by the in-cycle verifiers. Most of the voting processes are automated and enforce the blockchain rules.

The mesh represents the entirety of the network.

In the mesh, nodes are separated into two groups: cycle candidates & in-cycle verifiers. The majority of the verifiers in the mesh are cycle candidates awaiting to become an in-cycle verifier.

The blockchain rules depict when new cycle candidates are allowed to join the cycle, how often blocks are allowed to be produced, which cycle candidates are allowed to join, and so on.

The requirements for cycle candidates is to have a unique IPv4 address and an up-to-date, running, copy of the nyzoVerifier codebase.

After the cycle candidate has initialized for the first time (the codebase has been installed on a new machine with a unique IPv4 address & is running), a sequence of events take place:

The cycle candidate starts tracking the blockchain and its state;

The cycle candidate notifies the in-cycle verifiers of its existence;

The in-cycle verifiers record the existence of the cycle candidate with a timestamp.

After having passed a 30-day incubation period, a cycle candidate becomes eligible for selection by the cycle. This limitation largely prevents botnets and illicitly funded servers from gaining a significant advantage in joining the network. It avoids having an immediate advantage in joining the network.

Shown below is the historical progression of new cycle candidates joining the cycle and becoming an in-cycle verifier. (at the time of writing)

“Most blockchains rely on nodes or similar systems to secure the network. Nyzo relies on so-called “Verifiers” which produce blocks in every “mesh” (cycle). Please enlighten us, how does this work?”

The cycle consists of a fixed structure of nodes, who each, in turn, produce a block. This makes block production faster than PoW or PoS systems, with a block time of 7 seconds.

All in-cycle verifiers vote every 7 seconds to approve the production of the proposed block by the producing verifier.

The verifiers solely earn rewards from transaction fees. If you are able to join the cycle as a verifier, you get 10% of the transaction fees for each block you verify and 10% of transaction fees for each of the next 9 blocks in the chain. This is how you will earn coins in the beginning, and this is how you will continue to earn coins as more people join the system.

Until a lot of people have a lot of coins, organic transaction volume will not be high enough to make transaction verification worthwhile.

To remedy this, 27 million seed transactions have been created: one transaction per block for the first six years that the system will be in operation.

“Nyzo could be utilized as a means of currency but foremost as a better blockchain if I may believe the whitepaper. So how different is Nyzo, and how will it withstand the ravages of time?”

Every cryptocurrency has a way of releasing coins to the people which are involved with the project — this is the incentive for securing the network and the primary driver of interest by cycle candidates whom are looking to join the network.

It is an important determinant in regards to prospecting a cryptocurrency’s price and a network’s viability as a currency.

As mentioned above, the seed account facilitates rewards for the first six years of the network’s existence. It is to be expected that the network will see organic transaction volume after this time period. The cycle fund (77 million Nyzo) acts as the main catalyst for rewarding development on and for Nyzo.

While the consensus mechanism is called “Proof of diversity”, the result of proper diversification of verifiers stems from the consensus rules which are actively put in place and agreed upon by the network.

The open attack vector embedded in the classical proof of work consensus system does not care about time, it cares about calculations being solved, a definitive action with instant gratification for the miner participating.

Here is where nascent altcoins whom decided to use the proof of work system are at risk, the immediately gratified nature of one entity’s influence on a network poses a real and unforeseeable threat to the health of the network and integrity of the blockchain state.

This stands in sharp contrast with the modus operandi of Nyzo and proof of diversity in general. In the case of a bad actor trying to gain control of the cycle in order to perform a blockchain reorganization, he must either acquire access to 50% of the private keys of the verifiers in the cycle or join the cycle repetitively until he has garnered 50% of the total verifiers in the cycle.

One key aspect in the case of Nyzo is that it requires a certain amount of time for a node in the queue to join the cycle. The incentive structure ensures conformity of all network participants — the detectable nature of a blockchain reorganization, the unrealistic luck in favor of a malicious actor and the ever-changing status quo make a 51% attack on Nyzo an unrealistic, time-consuming and costly feat.

The next side effect of this protection is that the network runs on low-end virtual servers, which consume way less electricity (a million times is not an exaggeration) than a network based on Proof of Work or Proof of Stake.

“Being such a different project with its own novelties, how are you guys driving adoption of your blockchain?”

The manual aspect of the democratic unity, which is Nyzo, is used to vote for Nyzo community fund proposals (NCFP’s): if one gets approved by the network, the proposed amount can be escrowed by a trusted middleman or entity which ensures the proposal’s goals are met, or handed over directly to the person if the amount is low enough or the person/business has built a reputation with respect to the Nyzo community.

There is already interest in this mechanism and extensively detailed proposals are accessible on the forum. Feel free to add your own and become a part of the community.