wallet/docs/blockdag_consensus.md

title
Blockdag Consensus

The problem

For the reasons discussed, proof of work is incapable of handling a very large number of transactions per second. To replace fiat money, we need a consensus algorithm capable of a thousand times greater consensus bandwidth. There are plenty of consensus algorithms that can handle much higher consensus bandwidth, but they do not scale to large numbers of peers. They are usually implemented with a fixed number of peers, usually three peers, perhaps five, all of which have high reliability connections to each other in a single data centre.

In a decentralized open entry peer to peer network, you are apt to get a very large number of peers, which keep unpredictably appearing and disappearing and frequently have unreliable and slow connections.

Existing proof of stake crypto currencies handle this by "staking" which is in practice under the rug centralization. They are not really a decentralized peer to peer network with open entry.

The solution outlined

A manageable number of peers forming consensus

In a decentralized peer to peer network, it is impossible to avoid forks, and even with Practical Byzantine Fault Tolerant Consensus and Raft which have a vast, complex, and ingenious mathematical structure to prove that forks are impossible, and with a known and fixed very small number of peers all inside a single data centre with very good network connections, they wound up "optimizing" the algorithm to furtively allow forks through the back door, to be resolved later, possibly much later, because getting a fork free answer could sometimes take a very long time, and though the network was theoretically always live, in that it would theoretically deliver a definitive result eventually as long as f+1 non faulty peers were still at it, “eventually” was sometimes longer than people were willing to wait.

Practical Byzantine Fault Tolerant Consensus is horrendously complicated and hard to understand and becomes a lot more complicated when you allow forks through the backdoor. Byzantine fault tolerant Raft consensus is simpler, but in practice they wind up allowing backdoor forks anyway, despite incredibly clever academic ingenuity to produce a system that they could prove cannot fork, and when you have forks in the backdoor, Raft becomes at least as complicated and difficult to understand as Practical Byzantine Fault Tolerant Consensus, perhaps worse.

So, your consensus mechanism must reduce, but cannot eliminate, forks and therefore should not try. (There are a bunch of impossibility proofs, which any proposed consensus mechanism must thread a very narrow path between) and when a fork happens, as it likely very often will, has to resolve that fork by everyone eventually moving to the prong of the fork that has the most support, as happens in Bitcoin proof of work. Which is why Bitcoin proof of work scales to large numbers of peers.

In proof of work consensus, you slow down the production of forks by making everyone wade through molasses, and you can tell how much support a fork has by how fast it advances through the molasses, so everyone moves to the branch of the fork that has made it furthest through the molasses.

But this turns out to limit the consensus bandwidth to about ten transactions per second, though if the lightning network gets running as it should, this may well suffice for quite a bit longer. (Lightning needs fixes at the time of writing.)

Making everyone wade through molasses is just a bad idea. And it has produced a network that is alarmingly centralized and vulnerable to state power. There are very few big miners.

But you don’t want all the peers to report in on which fork they are on, because too much data, which is the problem with all the dag consensus systems. They all, like Practical Byzantine Fault Tolerant Consensus and Byzantine Fault Tolerant Raft, of which they are variants, rely on on all the peers telling all the other peers what branch they are on. Proof of work produces a very efficient and compact form of evidence how much support there is for a prong of a fork.

Sampling the peers

So we have to sample the peers, or rather have each peer form the same representative sample. And then we implement something similar to Paxos and Raft within that small sample. And sometimes peers will disagree about which sample, resulting in a fork, which has to be resolved.

For each peer that could be on the network, including those that have been sleeping in a cold wallet for years, each peer keeps a running cumulative total of that peers stake. With every new block, the peers stake is added to its total.

On each block of the chain, a peer’s rank is the bit position of the highest bit of the running total that rolled over when its stake was added for that block.

So if Bob has a third of the stake of Carol, and N is a rank that corresponds to bit position higher than the stake of either of them, then Bob gets to be rank R or higher one third as often as Carol. But even if his stake is very low, he gets to be high rank every now and then.

A small group of the highest ranking peers get to decide on the next block, and the likelihood of being a high ranking peer depends on stake.

Each peer is going to use a consensus created by those few peers that are high ranking at this block height of the blockchain, and since there are few such peers, there will usually only be one such consensus.

Each peer gets to be rank R+1 half as often as he gets to be rank N, and he gets to be a rank higher than R as often as he gets to be rank N.

The algorithm for producing the next block ensures that if the Hedera assumptions are true, (that everyone of high rank knows what high ranking peers are online, and everyone always gets through) a single next block will be produced by the unanimous agreement of the highest ranked peers, but we don't rely on this always being true. Sometimes, probably often, there will be multiple next blocks, and entire sequences of blocks. In which case each peer has to rank them and weight them and choose the highest ranked and weighted block, or the highest weighted sequence of blocks.

"how to calculate the running average\

dogs" {target="_blank"}

The rank of a block is rank of the lowest rank peer of the group forming the block, or one plus the running average of previous blocks rounded up to the nearest integer, whichever is less.

The weight of a block is m*2^R, where m is the size of the group forming the block and R is the rank of the block.

If the number and weight of online peers is stable, there will be two or more peers higher than the running average rank as often as there are less than two peers of that rank or higher. So the next block will be typically be formed by the consensus of two peers of the running average rank, or close to that.

If a peer is of rank to form a block of higher or equal rank to any existing block, and believes that there are enough peers online to form a block with higher rank or the same rank and greater weight than any existing block, it attempts to contact them and form such a block.

If the group forming a block contains two or more members capable of forming a block with higher rank (because it also contains members of lower rank than those members and lower than the running average plus one), the group is invalid, and if it purportedly forms a block, the block is invalid.

This rule is to prevent peers from conspiring to manufacture a fork with a falsely high weight under the rule for evaluating forks.

The intention is that in the common case, the highest ranked and weighted block possible will be one that can and must be formed by very few peers, so that most of the time, they likely succeed in forming the highest possible weighted and ranked block. To the extent that the Hedera assumptions hold true, they will succeed.

This does not describe how they form consensus. It describes how we get the problem of forming consensus down to sufficiently few peers that it becomes manageable, and how we deal with a group failing to form consensus in a reasonable time. (Another group forms, possibly excluding the worst behaved or least well connected members of the unsuccessful group)

Unlike Paxos and and Raft, we don't need a consensus process for creating the next block that is guaranteed to succeed eventually, which is important for if one of the peers has connection problems, or is deliberately trying to foul things up, "eventually" can take a very long time. Rather, should one group fail, another group will succeed.

Correctly behaving peers will wait longer the lower their rank before attempting to participate in block formation, will wait longer before participating in an attempt to form a low weighted block, and will not attempt to form a new block if a block of which they already have a copy would be higher rank or weight. (Because they would abandon it immediately in favour of a block already formed.)

In the course of attempting to form a group, peers will find out what other high ranking peers are online, so, if the Hedera assumption (that everyone always gets through eventually and that everyone knows who is online) is true, or true enough, there will only be one block formed, and it will be formed by the set of peers that can form the highest ranking block. Of course, the Hedera assumption is not always going to be true..

Suppose that two successor blocks of equal weight are produced: Well, then we have enough high ranking peers online and active to produce a higher weighted block, and some of them should do so. And if they fail to do so, then we take the hash of the public keys of the peers forming the block, their ranks, and the block height of the preceding block, and the largest hash wins.

When a peer signs the proposed block, he will attach a sequence number to his signature. If a peer encounters two inconsistent blocks that have the same peer signing it, (a peer can propose as many blocks as it likes) he should discount the signature with the lower sequence number, lowering the weight of the block with the lower sequence number. If the two signatures have the same sequence number, he discounts both signatures, lowering the weight of both blocks.

That is how we resolve two proposed successor blocks of the of the same blockchain.

Fork production is limited, because there are not that many high ranking peers, and because low ranking peers hold back for higher ranking peers to take care of block formation,

But we are going to get forks anyway. Not often, but sometimes. I lack confidence in the Hedera assumptions.

What do we do if we have a fork, and several blocks have been created on one or both prongs of the fork?

Then we calculate the weight of the prong:

\displaystyle\sum\limits_{i}2^{R_i}

Where i is the peer, and R_i$ is the rank of the last block on that prong of the fork that he has participated in forming.

If two prongs have the same weight, hash all the public keys of the signatories, their ranks, and the block height of the root of the fork and take the prong with the largest hash.

This value, the weight of a prong of the fork, will over time for large deep forks, approximate the stake of the peers online on that prong, without the painful cost taking a poll of all peers online, and without the considerable risk that that poll will be jammed by hostile parties.

Each correctly behaving peer will circulate the highest weighted prong of the fork of which it is aware, ignore all lower weighted prongs, and only attempt to create successor blocks for the highest weighted prong.

To add a block to the chain requires a certain minimum time, and the lower the rank of the group forming that block, the longer that time. If a peer sees new block that appears to it to be unreasonably and improperly early, or a fork prong with more blocks than it could have, it will ignore it.

Every correctly behaving peer will copy, circulate, and attempt to build on the highest weighted chain of blocks of which he is aware and will ignore all others.

This produces the same effect as wading through molasses, without the heavy wading, because the chain with the most numerous and highest ranking peers signing its blocks obviously has more support, just as in Bitcoin, more wading through molasses indicates more support.

Hedera, Bitcoin Proof of Work, and Paxos

Paxos

All consensus algorithms that work are equivalent to Paxos.

All consensus algorithms that continue to work despite Byzantine Fault and Brigading are equivalent to Byzantine Fault Tolerant Paxos.

But Paxos is not in fact an algorithm. It rather is an idea that underlies actual useful algorithms, and in so far as it is described as algorithm, it is wrong, for the algorithm as described describes many different things that you are unlikely to be interested in doing, or even comprehending, and the algorithm as described is incapable of doing all sorts of things that you are likely to need done. Even worse it is totally specific to one particular common use case, which it studiously avoids mentioning, and does not mention any of the things that you actually need to couple it in to this specific case, making the description utterly mysterious, because the writer has all the specific details of this common case in mind, but is carefully avoiding any mention of what he has in mind. These things are out of scope of the algorithm as given in the interests of maximum generality, but the algorithm as given is not in fact very general and makes no sense and is no use without them.

The algorithm, and algorithms like it and closely related to it do not scale to large numbers of peers, but understanding how and why it works is useful to understanding how to create an algorithm that will work.

Despite the studious effort to be as generic as possible by omitting all of the details required to make it actually do anything useful, the algorithm as given is the simplest and most minimal example of the concept, implementing one specific form of Paxos in one specific way, and as given, will very likely not accomplish you need to do.

Paxos assumes that each peer knows exactly how many peers there should be, though some of them may be permanently or temporarily unresponsive or permanently or temporarily out of contact.

In Paxos, every peer repeatedly sends messages to every other peer, and every peer keeps track of those messages, which if you have a lot of peers adds up to a lot of overhead.

Hedera assumes that each peer knows exactly how many peers there should be, and that each peer eventually gets through.

Which is a much stronger assumption than that made by Paxos or Bitcoin.

In Hedera, each peer's state eventually becomes known to every other peer, even though it does not necessarily communicate directly with every other peer, which if you have a whole lot of peers still adds up to a whole lot of overhead, though not as much as Paxos. It can handle more peers than Paxos, but if too many peers, still going to bite.

A blockdag algorithm such as Hedera functions by in effect forking all the time, and resolving those forks very fast, but if you have almost as many forks as you have peers, resolving all those forks is still going to require receiving a great deal of data, processing a great deal of data, and sending a great deal of data.

Hedera and Paxos can handle a whole lot of transactions very fast, but they cannot reach consensus among a very large number of peers in a reasonable time.

Bitcoin does not know or care how many peers there are, though it does know and care roughly how much hashing power there is, but this is roughly guesstimated over time, over a long time, over a very long time, over a very very long time. It does not need to know exactly how much hashing power there is at any one time.

If there are a very large number of peers, this only slows Bitcoin consensus time down logarithmically, not linearly, while the amount of data per round that any one peer has to handle under Hedera is roughly \bigcirc\big(N\log(N)\big) where N is the number of peers. Bitcoin can handle an astronomically large number of peers, unlike Hedera and Paxos, because Bitcoin does not attempt to produce a definitive, known and well defined consensus. It just provides a plausible guess of the current consensus, and over time you get exponentially greater certainty about the long past consensuses. No peer ever knows the current consensus for sure, it just operates on the recent best guess of its immediate neighbours in the network of what the recent consensus likely is. If it is wrong, it eventually finds out.

Equivalence of Proof of Work and Paxos

Bitcoin is of course equivalent to Byzantine Fault Tolerant Paxos, but I compare it to Paxos because Paxos is difficult to understand, and Byzantine Fault Tolerant Paxos is nigh incomprehensible.

In Paxos, before a peer suggests a value to its peers, it must obtain permission from a majority of peers for that suggestion. And when it seeks permission from each peer, it learns if a value has already been accepted by that peer. If so, it has to accept that value, only propose that value in future, and never propose a different value. Which if everyone always gets through, means that the first time someone proposes a value, that value, being the first his peers have seen, will be accepted by someone, if only by that peer himself.

Paxos is effect a method for figuring out who was "first", in an environment where, due to network delays and lost packets, it is difficult to figure out, or even define, who was first. But if most packets mostly get through quickly enough, the peer that was first by clock time will usually get his way. Similarly Bitcoin, the first miner to construct a valid block at block height N usually winds up defining the consensus for the block at block height N.

This permission functionality of Paxos is equivalent to the gossip process in Bitcoin, where a peer learns what the current block height is, and seeks to add another block, rather than attempt to replace an existing block.

In Paxos, once one peer accepts one value, it will eventually become the consensus value, assuming that everyone eventually gets through and that the usual network problems do not foul things up. Thus Paxos can provide a definitive result eventually, while Bitcoin's results are never definitive, merely exponentially probable.

In Paxos, a peer learns of the definitive and final consensus when it discovers that a majority of peers have accepted one value. Which if several values are in play can take a while, but eventually it is going to happen. In Bitcoin, when the blockchain forks, eventually more hashing power piles on one branch of the fork than the other, and eventually everyone can see that more hashing power has piled on one fork than the other, but there is no moment when a peer discovers than one branch is definitive and final. It just finds that one branch is becoming more and more likely, and all the other branches less and less likely.

Thus paxos has a stronger liveness property than bitcoin, but this difference is in practice not important, for paxos may take an indefinitely long time before it can report a definite and final consensus, while Bitcoin takes a fairly definite time to report it is nearly certain about the consensus value and that value is unlikely is unlikely to change.

Further, in actual practice, particularly during a view change, Paxos and Raft are frequently in a state where a peer knows that one view is overwhelmingly likely to become final, and another view highly unlikely, but the state takes a while to finalize. And the client is waiting. So it winds up reporting a provisional result to the client.

Bitcoin does not scale to competing with fiat currency

Bitcoin is limited to ten transactions per second. Credit card networks handle about ten thousand transactions per second.

We will need a crypto coin that enables seven billion people to buy a lollipop.

Blockdag consensus can achieve sufficient speed.

There are thirty or more proposed blockdag systems, and the number grows rapidly.

While blockdags can handle very large numbers of transactions, it is not obvious to me that any of the existing blockdag algorithms can handle very large numbers of peers. When actually implemented, they always wind up privileging a small number of special peers, resulting in hidden centralization, as somehow these special and privileged peers all seem to be in the same data centre as the organization operating the blockchain.

Cardano has a very clever, too clever by half, algorithm to generate random numbers known to everyone and unpredictable and uncontrollable by anyone, with which to distribute specialness fairly and uniformly over time, but this algorithm runs in one centre, rather than using speed of light delay based fair randomness algorithms, which makes me wonder if it is distributing specialness fairly, or operating at all.

I have become inclined to believe that there is no way around making some peers special, but we need to distribute the specialness fairly and uniformly, so that every peer get his turn being special at a certain block height, with the proportion of block heights at which he is special being proportional to his stake.

If the number of peers that have a special role in forming the next block is very small, and the selection and organization of those peers is not furtively centralized to make sure that only one such group forms, but rather organized directly those special peers themselves we wind up with forks sometimes, I hope infrequently, because the special peers should most of the time successfully self organize into a single group that contains almost all of the most special peers. If however, we have another, somewhat larger group of peers that have a special role in deciding which branch of the fork is the most popular, two phase blockdag, I think we can preserve blockdag speed without blockdag de-facto concentration of power.

The algorithm will only have bitcoin liveness, rather than paxos liveness, which is the liveness most blockdag algorithms seek to achieve.

I will have to test this empirically, because it is hard to predict, or even to comprehend, limits on consensus bandwidth.

Bitcoin is limited by its consensus bandwidth

Not by its network bandwidth.

Bitcoin makes the miners wade through molasses. Very thick molasses. That is what proof of work is. If there is a fork, it discovers consensus by noticing which fork has made the most progress through the molasses.

This takes a while. And if there are more forks, it takes longer. To slow down the rate of forks, it makes the molasses thicker. If the molasses is thicker, this slows down fork formation more than it slows down the resolution of forks. It needs to keep the rate of new blocks down slow enough that a miner usually discovers the most recent block before it attempts to add a new block. And if a miner does add a new block at roughly the same time as another miner adds a new block, quite a few more blocks have to be added before the fork is resolved. And as the blocks get bigger, it takes longer for them to circulate. So bigger blocks need thicker molasses. If forks form faster than they can be resolved, no consensus.

The network bandwidth limit

The net bandwidth limit on adding transactions is not a problem.

What bites every blockchain is consensus bandwidth limit, how fast all the peers can agree on the total order of transactions, when transactions are coming in fast.

Suppose a typical transaction consists to two input coins, a change output coin, and the actual payment. (I use the term coin to refer to transaction inputs and outputs, although they don’t come in any fixed denominations except as part of anti tracking measures)

Each output coin consists of payment amount, suppose around sixty four bits, and a public key, two hundred and fifty six bits. It also has a script reference on any special conditions as to what constitutes a valid spend, which might have a lot of long arguments, but it generally will not, so the script reference will normally be one byte.

The input coins can be a hash reference to a coin in the consensus blockchain, two fifty six bits, or they can be a reference by total order within the blockchain, sixty four bits.

We can use a Schnorr group signature, which is five hundred and twelve bits no matter how many coins are being signed, no matter how many people are signing, and no matter if it is an n of m signature.

So a typical transaction, assuming we have a good compact representation of transactions, should be around 1680 bits, maybe less.

At scale you inevitably have a large number of clients and a small number of full peers. Say several hundred peers, a few billion clients, most of them lightning gateways. So we can assume every peer has a good connection.

A typical, moderately good, home connection is thirty Mbps download but its upload connection is only ten Mbs or so.

So if our peers are typical decent home connections, and they will be a lot better than that, bandwidth limits them to adding transactions at 10Mbps, six thousand transactions per second, Visa card magnitude. Though if such a large number of transactions are coming in so fast, blockchain storage requirements will be very large, around 24 TiB, about three or four standard home desktop system disk drives. But by the time we get to that scale all peers will be expensive dedicated systems, rather than a background process using its owners spare storage and spare bandwidth, running on the same desktop that its owner uses to shop at Amazon.

Which if everyone in the world is buying their lollipops on the blockchain will still need most people using the lightning network layer, rather than the blockchain layer, but everyone will still routinely access the blockchain layer directly, thus ensuring that problems with their lightning gateways are resolved by a peer they can choose, rather than resolved by their lightning network wallet provider, thus ensuring that we can have a truly decentralized lightning network.

We will not necessarily get a truly decentralized lightning layer, but a base layer capable of handling a lot of transactions makes it physically possible.

So if bandwidth is not a problem, why is bitcoin so slow?

The bottleneck in bitcoin is that to avoid too many forks, which waste time with fork resolution, you need a fair bit of consensus on the previous block before you form the next block.

And bitcoin consensus is slow, because the way a fork is resolved is that blocks that received one branch fork first continue to work on that branch, while blocks that received the other branch first continue to work on that branch, until one branch gets ahead of the other branch, whereupon the leading branch spreads rapidly through the peers. With proof of stake, that is not going work, one can lengthen a branch as fast as you please. Instead, each branch has to be accompanied by evidence of the weight of stake of peers on that branch. Which means the winning branch can start spreading immediately.

Blockdag to the rescue

On a blockdag, you don’t need a fair bit of consensus on the previous block to avoid too many forks forming. Every peer is continually forming his own fork, and these forks reach consensus about their left great grand child, or left great great … great grandchild. The blocks that eventually become the consensus as leftmost blocks form a blockchain. So we can roll right ahead, and groups of blocks that deviate from the consensus, which is all of them but one, eventually get included, but later in the total order than they initially thought they were.

In a blockdag, each block has several children, instead of just one. Total order starting from any one block is depth first search. The left blocks come before the right blocks, and the child blocks come before the parent block. Each block may be referenced by several different parent blocks, but only the first reference in the total order matters.

Each leftmost block defines the total order of all previous blocks, the total order being the dag in depth first order.

Each peer disagrees with all the other peers about the total order of recent blocks and recent transactions, each is its own fork, but they all agree about the total order of older blocks and older transactions.

previous work

There are umpteen proposals for blockdags most of them garbage, but the general principle is sound.

For a bunch of algorithms that plausibly claim to approach the upload limit, see:

• Scalable and probabilistic leaderless bft consensus through metastability

  This explains the underlying concept, that a peer looks at the dag, make its best guess as to which way consensus is going, and joins the seeming consensus, which make it more likely to become the actual consensus.

  Which is a good way of making arbitrary choices where it does not matter which choice everyone makes, provided that they all make the same choice, even though it is an utterly disastrous way of making choices where the choice matters.

  This uses an algorithm that rewards fast mixing peers by making their blocks appear earlier in the total order. This algorithm does not look incentive compatible to me. It looks to me that if all the peers are using that algorithm, then any one peer has an incentive to use a slightly different algorithm.

  The authors use the term Byzantine fault incorrectly, referring to behavior that suggests the unpredictable failures of an unreliable data network as Byzantine failure. No, a Byzantine fault suggests Byzantine defection, treachery, and failure to follow process. It is named after Byzantium because of the stuff that happened during the decline of the Byzantine empire.

• Prism: Deconstructing the blockchain to approach physical limits

  A messy, unclear, and overly complicated proposed implementation of the blockdag algorithm, which, however, makes the important point that it can go mighty fast, that the physical limits on consensus are bandwidth, storage, and communication delay, and that we can approach these limits.

• Blockmania: from block dags to consensus

  This brings the important concept, that the tree structure created by gossiping the blockdag around is the blockdag, and also is the data you need to create consensus, bringing together things that were separate in Prism, radically simplifying what is complicated in Prism by uniting data and functionality that Prism divided.

  This study shows that the Blockmania implementation of the blockdag is equivalent to the Practical Byzantine Fault Tolerant consensus algorithm, only a great deal faster, more efficient, and considerably easier to understand.

  The Practical Byzantine Fault Tolerant consensus algorithm is an implementation of the Paxos protocol in the presence of Byzantine faults, and the Paxos protocol is already hard enough to understand.

  So anyone who wants to implement consensus in a system where Byzantine failure and Byzantine defection is possible should forget about Paxos, and study blockdags.

• A highly scalable, decentralized dag–based consensus algorithm

  Another blockdag algorithm, but one whose performance has been tested. Can handle high bandwidth, lots of transactions, and achieves fast Byzantine fault resistant total order consensus in time O(6λ), where λ is the upper bound of the network’s gossip period.

• Blockchai–free cryptocurrencies: A framework for truly decentralised fast transactions

  These transactions are indeed truly decentralized, fast, and free from blocks, assuming all participants download the entire set of transactions all the time.

  The problem with this algorithm is that when the blockchain grows enormous, most participants will become clients, and only a few giant peers will keep the whole transaction set, and this system, because it does not provide a total order of all transactions, will then place all the power in the hands of the peers.

  We would like the clients to have control of their private keys, thus must publish their public keys with the money they spend, in which case the giant peers must exchange blocks of information containing those keys, and it is back to having blocks.

  The defect of this proposal is that convergence does not converge to a total order on all past transactions, but merely a total set of all past transactions. Since the graph is a graph of transactions, not blocks, double spends are simply excluded, so a total order is not needed. While you can get by with a total set, a total order enables you to do many things a total set does not let you do. Such as publish two conflicting transactions and resolve them.

  Total order can represent consensus decisions that total set cannot easily represent, perhaps cannot represent at all. We need a blockdag algorithm that gives us consensus on the total order of blocks, not just the set of blocks.

  In a total order, you do not just converge to the same set, you converge to the same order of the set. Having the same total order of the set makes makes it, among other things, a great deal easier and faster to check that you have the same set. Plus your set can contain double spends, which you are going to need if the clients themselves can commit transactions through the peers, if the clients themselves hold the secret keys and do not need to trust the peers.

Calculating the stake of a peer

We intend that peers will hold no valuable or lasting secrets, that all the value and the power will be in client wallets, and the client wallets with most of the value, who should have most of the power, will seldom be online.

I propose proof of stake. The stake of a peer is not the stake it owns, but the stake that it has injected into the blockchain on behalf of its clients and that its clients have not spent yet, or stake that some client wallet somewhere has chosen to be represented by that peer. Likely only the whales will make a deliberate and conscious decision to have their stake represented by a peer, and it will be a peer that they likely control, or that someone they have some relationship with controls, but not necessarily a peer that they use for transactions.

Each peer pays on behalf of its clients for the amount of space it takes up on the blockchain, though it does not pay in each block. It makes an advance payment that will cover many transactions in many blocks. The money disappears, built in deflation, instead of built in inflation. Each block is a record of what a peer has injected

The system does not pay the peers for generating a total order of transactions. Clients pay peers for injecting transactions. We want the power to be in the hands of people who own the money, thus governance will have a built in bias towards appreciation and deflation, rather than inflation.

Cost of storage on the blockchain.

Tardigrade charges $120 per year for per terabyte of storage, $45 per terabyte of download

We have a pile of theory, though no practical experience, that a blockdag can approach the physical limits, that its limits are going to be bandwidth and storage..

Storage on the blockdag is going to cost more, because massively replicated, so say three hundred times as much, and is going to be optimized for tiny fragments of data while Tardigrade is optimized for enormous blocks of data, so say three times as much on top of that, a thousand times as expensive to store should be in the right ballpark. Maybe ten thousand.

When you download, you are downloading from only a single peer on the blockdag, but you are downloading tiny fragments dispersed over a large pile of data, so again, a thousand times as expensive to download sounds like it might be in the right ballpark.

Then storing a chain of keys and the accompanying roots of total state, with one new key per day for ten years will cost about two dollars over ten years.

Ten megabytes is a pretty big pile of human readable documentation. Let us suppose you want to store ten megabytes of human readable data and read and write access costs a thousand times what tardigrade costs, will cost about twelve dollars.

So, we should consider the blockdag as an immutable store of arbitrary typed data, a reliable broadcast channel, where some types are executable, and, when executed, cause a change in mutable total state, typically that a new unspent coin record is added, and an old unspent coin record is deleted.

A thousand times as expensive turns out to be quite economical.