The Mechanism
At the heart of TIG lies a novel proof of work mechanism called Optimisable Proof of Work (OPoW). OPoW is a significant departure from both standard Proof of Work (PoW) mechanisms and Proof of Useful Work (PoUW) systems.
In standard PoW, miners compete to solve arbitrary mathematical puzzles to create new blocks and receive token rewards, incentivising them to contribute computational power to secure the network. PoUW systems aim to direct this computational power towards solving real-world challenges instead of arbitrary puzzles. In both, miners look to optimise their hardware in order to achieve rewards at a lower cost.
OPoW incentivises two categories of actors:
- Innovators who create and optimise algorithms
- Benchmarkers (analogous to miners within the system) who identify the most efficient algorithms.
Within this system, computational work establishes a synthetic market for algorithms, with miners being incentivised to identify and adopt the most efficient ones.
The key innovation of Optimisable proof of work is allowing proof of work algorithms themselves to be optimised, while avoiding centralisation risk- retaining a decentralised and secure network.
To read more about how OPoW and rewards work, head over to the Protocol Overview page.
Key Features
The following are key features of TIG that keep it secure:
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Multiple independent challenges representing real-world computational problems. This mitigates the risk of centralisation, as the system’s overall security is not compromised if a single challenge is dominated by any one entity.
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Balanced reward distribution to encourage uniform participation across challenges. OPoW’s reward distribution mechanism is designed to incentivise benchmarkers (miners) to distribute their efforts uniformly across all challenges. Imbalances in the allocation of computational resource are penalised, ensuring that there is an economic incentive to work on all challenges equally and maintain the decentralisation of the network.
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A token economy that aligns participant interests with the overall health and security of the ecosystem. We believe that these features, together with the underlying mechanism, allow for the incentivised creation of a type of value that neither uPoW or PoW are capable of - namely the innovation and sharing of improved algorithms within a fully decentralised system.