Witnet

As with most blockchain structures, miners are the nodes in charge of adding blocks to the block chain. These nodes are selected using the Proof of Conformity described here. Thanks to the reputation system, barriers to entry are lower than other oracles, since new nodes do not need to invest a significant amount of money or invest in expensive equipment in order to be eligible to process data requests or mining. This fact encourages new nodes to join the network and thus promotes decentralization.

Reputation system

The consensus mechanism is based on the reputation system. Instead of Proof of Work (PoW) or Proof of Stake (PoS), a node is selected probabilistically based on the reputation score it received when resolving data requests. As a result, any node has a chance to earn WIT tokens without having to wager big or buy expensive hardware, as is the case with PoW/PoS. Witnet is an adaptation of the Byzantine Fault Tolerance algorithm. Nodes using a cryptographic sorting scheme secretly calculate their right to perform tasks (mining, tracking data requests), that is, they calculate their proof of fit (PoE). Such a proof is later verified by the rest of the nodes in the network. Among the elected reporters of the block, the block proposed by the partner with a higher reputation is accepted (if it is valid).

The most common attacks targeting PoW and PoS consensus mechanisms on blockchains have been carefully analyzed in recent years, but how does a reputation-based blockchain protect against these attacks? You can find specific explanations on our Medium blog, but in short:

-Sybil Attacks: The reputation system works very well against this attack as it requires the sybils to work online in order to gain enough influence. In addition, an additional fee is required when solving a data request, which makes the attack uneconomical.

-Eclipse attacks: To prevent an attacker from monopolizing all connections of a node, a P2P grouping system was implemented.

-Bribery Attacks: The introduction of collateral fees makes any bribe very expensive, read this post for more information.

-Majority Attacks: Witnet's implementation ensures that an attacker will need 51% of the total reputation to perform a majority attack. This is an extremely unlikely scenario, even if the reputation is combined.

-DDoS Attacks: Witnet implements Dandelion to hide the association between IP addresses and public keys, making DDoS attacks nearly impossible.

Witnet uses its own blockchain with its own token called WIT. WITs are earned by witnesses while resolving data requests and mining blocks and are used to encourage honest and trustworthy behavior throughout the network.

Regarding the distribution of WIT:

Maximum offer 2,500,000,000 WIT.

70% will be mined by witness nodes through block rewards that decrease over time.

30% will be minted in the early stage block (the first block in the chain). They will be given to early participants (2017 pre-sale participants; the Witnet Foundation; and those who helped create Stampery 2).

Mined tokens will be issued as follows, subject to change: the number of WIT generated per block starts at 1000 and will decrease geometrically, with a 50% decrease every 875,000 blocks, or approximately every 2.5 years. Each of these periodic cuts is known as a "halving". As a result, the total number of WITs generated by the issuing mechanism will never exceed 2,500,000,000 minus the pre-assigned 30%.