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June 22, 2022

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How proof of history works in Solana's blockchain

Introducing proof of history & its role in Solana

Proof of History represents one of the most significant innovations in blockchain technology, serving as a cornerstone of the Solana blockchain architecture. Developed by Anatoly Yakovenko, with the whitepaper released in 2017, this novel mechanism addresses a fundamental challenge that has plagued distributed systems since their inception: establishing a reliable chronological order of events without centralised coordination.

At its core, Proof of History functions as a high-frequency Verifiable Delay Function that creates a historical record proving that an event occurred at a specific moment in time. Unlike traditional blockchain systems that rely solely on consensus mechanisms to agree on transaction timing, Proof of History provides a cryptographic time stamp before consensus is reached, fundamentally altering the efficiency equation for blockchain networks.

Solana's implementation of Proof of History has enabled the network to achieve very high theoretical transaction throughput, such as over 65,000 transactions per second, without the computational overhead typically associated with achieving high throughput in other blockchain designs. This remarkable efficiency has positioned Solana as a formidable competitor in the blockchain space, particularly for decentralised applications requiring rapid transaction finality.

How it works & benefits

Technical mechanics of Proof of History

Proof of History operates through a sequential hashing process that creates an unbroken chain of cryptographic timestamps. The system works as follows:

A sequence producer, known as the leader in Solana's PoS system, takes the output of a previous hash and uses it as input for the next SHA256 hash function. Data from transactions or other events can be appended to these hashes as they are generated.
This new hash becomes the input for the subsequent hash, creating a continuous, verifiable sequence where each hash represents a tick in time.
The system performs these hashes rapidly, with each hash requiring a specific, small amount of real time to compute. This sequential process creates a verifiable delay.
The resulting chain of hashes serves as a cryptographic clock, allowing nodes to verify when events occurred relative to each other without needing extensive direct communication about timing before transactions are ordered.

This architecture delivers several critical benefits:

Deterministic verification: Any node can independently verify the passage of time and the order of events recorded in the Proof of History sequence.
Reduced communication overhead: Validators need less communication to agree on the order of transactions because Proof of History provides a common, verifiable timeline.
Parallelised transaction processing: With time verification largely handled by Proof of History, the consensus mechanism, Tower BFT, can focus more efficiently on validating transactions, and Solana's runtime, Sealevel, can process non-overlapping transactions in parallel.

The implementation of Proof of History has enabled Solana to achieve remarkable transaction throughput, aiming to do so without unduly sacrificing security or fundamental decentralization principles, although the degree of decentralization achieved is a nuanced topic. By providing a verifiable passage of time, Solana has effectively streamlined parts of the validation process, allowing for its high scalability targets.

Impact on transaction speed & scalability

The integration of Proof of History into Solana's architecture has transformed blockchain performance metrics. Traditional blockchain networks face significant limitations in transaction processing due to the sequential nature of block production and the communication overhead required for nodes to agree on transaction order and timing.

Solana's Proof of History mechanism addresses these constraints by:

Reducing validator communication requirements by providing a common reference for time.
Enabling parallel transaction processing across multiple CPU cores via its Sealevel runtime.
Decreasing block confirmation times to approximately 400-600 milliseconds.
Supporting sustained practical throughput of several thousand transactions per second, with theoretical peaks significantly higher.

These capabilities have made Solana particularly attractive for decentralised finance applications, non-fungible token marketplaces, and high-frequency trading platforms. Projects like Raydium or Orca, decentralised exchanges built on Solana, leverage this infrastructure to provide trading experiences with low latency.

Comparison with traditional proof-of-stake

While Proof of History works in conjunction with Proof of Stake in the Solana ecosystem, the two mechanisms serve distinct functions. Traditional Proof of Stake systems, like Ethereum's current implementation, rely primarily on validator consensus to establish transaction ordering, which can introduce latency as validators communicate to agree on the state of the chain.

Key differences between Solana's Proof of History-enhanced Proof of Stake and traditional Proof of Stake include:

Transaction Ordering

Solana uses a unique method for transaction ordering compared to traditional Proof-of-Stake (PoS) systems:

Solana (PoH + PoS): Transactions are pre-ordered via Proof of History (PoH), which allows for high efficiency and sequencing.
Traditional PoS (e.g., Ethereum PoS): Transactions are established through consensus, leading to potentially slower and more resource-intensive ordering.

Block Time

Block time refers to the average time it takes to produce a new block in a blockchain.

Solana: Produces blocks approximately every 400–600 milliseconds, offering rapid transaction processing.
Traditional PoS (Ethereum PoS): Has a block time of around 12 seconds per slot, making it significantly slower than Solana.

Validator Communication

The efficiency of validator coordination impacts overall network performance.

Solana: Uses an optimized communication protocol based on the PoH timeline, improving speed and efficiency.
Traditional PoS: Requires more extensive communication to establish transaction order, which can introduce delays.

Finality Time

Finality refers to how quickly a transaction becomes irreversible.

Solana: Achieves sub-second finality under optimistic conditions, enabling faster transaction confirmations.
Traditional PoS: Typically experiences longer finality times to ensure strong finality guarantees.

This architectural difference allows Solana to maintain security guarantees while dramatically improving performance metrics. The combination of Proof of History with Proof of Stake creates a system that preserves the energy efficiency and security of stake-based validation while aiming to eliminate many of its traditional performance bottlenecks.

Security & decentralisation trade-offs

Despite its advantages, Proof of History and Solana's overall architecture introduce certain trade-offs and considerations in the security and decentralisation domains. The high-performance hardware requirements for validators to efficiently process the Proof of History sequence and network transactions have raised concerns about potential centralisation pressures.

Current hardware requirements for Solana validators include :

12 or more CPU cores,
128GB or more of RAM,
high-speed NVMe storage,
and a reliable gigabit internet connection.

These specifications exceed those of many other blockchain networks, potentially limiting the validator pool to more well-resourced entities. However, the Solana Foundation and community argue that these requirements remain within reach of motivated individuals and will become increasingly accessible as hardware costs decline and client software becomes more efficient, for instance, with the development of new validator clients like Firedancer.

From a security perspective, Proof of History itself isn't the consensus mechanism. The security of the network relies on the Proof of Stake mechanism, specifically Tower BFT in Solana's case. The system's reliance on a single block-producing leader at any given time, though this leader rotates rapidly, is a design choice for efficiency. Solana mitigates risks associated with this through rapid leader rotation and the requirement that all validators cryptographically verify the Proof of History sequence and transaction validity.

Criticisms & limitations

Despite its innovative approach, Proof of History and the Solana network have faced several criticisms:

Hardware requirements and validator costs: The computational demands and associated costs may favor institutional validators, impacting decentralization.
Leader-based block production: While leaders rotate quickly, the current leader is crucial for block production during its assigned slot.
Network congestion and outage incidents: Several high-profile network stalls occurred, particularly between 2021 and early 2023, during periods of extreme demand or due to specific bugs.
Complexity: The sophisticated architecture potentially increases the attack surface and learning curve compared to simpler blockchain designs.

These limitations manifested in several network incidents. While subsequent upgrades and ongoing development, such as the Firedancer validator client, have addressed many of these vulnerabilities and significantly improved stability, they highlight the ongoing challenges of maintaining a high-performance blockchain network.

Proof of history vs other consensus mechanisms

When compared to other approaches, Proof of History offers distinct characteristics as a component of Solana's overall consensus architecture:

Versus Proof of Work (Bitcoin): Proof of History, as part of Solana's Proof of Stake system, helps achieve superior transaction throughput and energy efficiency compared to energy-intensive Proof of Work mining.
Versus Pure Proof of Stake (e.g., Algorand, Cardano): Solana's Proof of History aims to enable faster finality and higher throughput, though often with higher validator hardware requirements.
Versus Delegated Proof of Stake (e.g., EOS, Tron): Solana's Proof of History plus Proof of Stake aims for higher validator participation than typical Delegated Proof of Stake systems, which often have a small number of block producers, while targeting comparable or higher performance. The decentralization comparison remains nuanced.
Versus Directed Acyclic Graph (e.g., Hedera, Fantom): Proof of History offers a different approach to ordering and achieving consensus, with Solana focusing on a single, high-performance state machine, while Directed Acyclic Graphs often offer different models of concurrency and finality. Both can achieve high throughput, though security guarantee comparisons are complex and model-dependent.

This positioning has allowed Solana to carve out a significant market position, particularly for applications requiring high transaction throughput with robust security guarantees.

Check out our other articles on the Solana blockchain:

Future optimisations & upgrades

The Solana ecosystem continues to evolve, with several planned optimisations related to its core technology, including aspects that interact with Proof of History:

Forkless upgrades: Implementing seamless protocol improvements without chain splits.
Improved validator client efficiency: Reducing hardware requirements and increasing node performance through software optimisation, notably with the development of new validator clients like Firedancer.
Enhanced fault tolerance: Implementing more robust recovery mechanisms and improving network resilience against stalls or congestion.
Scaling Research: While Solana's core philosophy is a single, high-performance global state machine, ongoing research explores various methods to further scale network capacity. Traditional execution sharding as seen in some other blockchain roadmaps is not Solana's primary Layer 1 scaling strategy; rather, focus remains on optimizing the single shard and supporting Layer 2 solutions or state-related scaling.

These developments aim to address current limitations while preserving the core benefits that have made Solana one of the fastest-growing blockchain ecosystems.

As blockchain technology continues to mature, Proof of History represents a significant innovation that has fundamentally altered performance expectations in the industry. Its implementation in Solana has demonstrated that high throughput can be achieved while aiming for a decentralized model, opening new possibilities for blockchain applications across numerous sectors.