- The new algorithm purportedly provides immediate transaction finality.
- The upgrade is a crucial step in creating the next iteration of the Neo blockchain.
China-based blockchain platform Neo has recently developed a new iteration of its consensus algorithm, the Byzantine Fault Tolerance mechanism (dBFT 2.0), on its mainnet. Reportedly, the new algorithm will enable immediate transaction finality. It contains a new method of reintegrating failed nodes back into the network, and also adds a “commit phase” of consensus, mitigating forking issues by including a step that forces node assignment to new blocks.
Due to this commit phase, the consensus mechanism dBFT reportedly differs from the ones for top cryptocurrency blockchains Bitcoin and Ethereum.
The consensus mechanism is a proof-of-work (PoW) protocol for Bitcoin which will allow BTC miners to compete on making the next block, which means that there are competing forks on the blockchain. While Ethereum uses a PoW mechanism to both create and validate new blocks. Neo indicates that it can result in forks and potential transaction reversals.
Erik Zhang, the creator of the first dBFT protocol, said:
“With this improvement, dBFT will have more strict finality. Users only need to wait for one confirmation (15 seconds) to ensure the irreversibility of the transactions and prevent double-spending. This is very suitable for financial applications.”
dBFT is a crucial step in creating the next iteration of the Neo blockchain, Neo 3.0. Zhang also has plans to incorporate large-scale entertainment applications on Neo 3.0, saying:
“When we talk about Neo 3.0 being ready for large-scale commercial use, we mean it provides the possibility to run large-scale applications with blockchain technology. In the future, we’d like to see applications such as YouTube, Alipay, and gaming giants like Tencent and Blizzard run on blockchain, and Neo 3.0 will allow these big organizations to do that.”