Lesson 17 of 20
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17. What is Proof of Elapsed Time (PoET)?

This is nothing more than another of the consensus mechanisms. Its task is very  simple. It is to prevent high resource utilization and energy consumption. It makes the  whole extraction process more efficient, all by using a fair lottery system. How does  the algorithm itself work from the inside? It uses randomly generated time that has  already elapsed to determine mining rights and block winners on the blockchain  network. I know, I know – sounds complicated 🙂 Relax – we explain everything in  detail below. PoET increases transparency and provides the ability for external users  to verify lottery results. All by running so-called trusted code in a secure environment. 

PoET consensus mechanism 

As you know from previous lessons, the consensus mechanism is used in blockchain  networks to verify transactions and create more blocks. The Proof of Elapsed Time is  used right here. It decides the mining rights or winners of blocks in the network. 

PoET works by relying on two key factors. Participating nodes choose a random  mining time, not the one chosen by the participant to win. Secondly, PoET  determines that the block winner has successfully completed the waiting time. 

The very concept of the mechanism was invented in 2016 by Intel Corporation. It was  a giant in the field of chip manufacturing. Intel has so far offered ready-made, high-tech tools for solving computational problems such as “random leader election.” Such  a mechanism allows applications to generate so-called trusted code in a selected  environment that meets two key requirements: 

∙ Random selection of waiting time for all node participants. 

∙ Actual completion of the waiting time by the winning participant. Moreover – the time is equal. 

The INTEL organization in collaboration with Linux or IBM sponsored the open source project Hyperledger Sawtooth, which also uses the PoET  mechanism. Hyperledger Sawtooth is a distributed ledger that scales solutions as  well as being adaptable to multiple applications at different enterprise levels. It can  be found in supply chain or logistics. And it can even be used for inventory management. It is also often used in tasks that consume a lot of time and are prone  to human error. Why are we mentioning this? Because the PoET consensus is just  mainly used in Hyperledger Sawtooth. As of January 2022, no cryptocurrency based on this consensus has been created. 

PoET – how it works 

As we mentioned earlier, the whole mechanism is based on the principle of a fair  lottery system. In it, each node has the same probability of being chosen, and the  chances of winning are spread over as many network participants as possible. Under  PoET, each node in the network waits for a randomly selected period. The node that 

completes the designated waiting time first will win a new block. This whole process  repeats and more blocks are discovered in this way. 

PoET vs PoW 

PoET PoW
Uses less energy than PoWIt is a competitive working mechanism.
Improves network performance by  putting a node to sleep and redirecting  it to other tasks.Continuously computes hashes until  miners find target values.
The trusted code cannot be changed by another participant.Relies on leaders.
Provides a way for network participants  or other authorized people to verify the  results.PoW is difficult to generate and is therefore  time and resource consuming.
Increases transparency of network  consensus.Accounts for as much as 90% of the total market capitalisation of existing  cryptocurrencies.
Controls the cost of the consensus  process and keeps it constant.Requires work from nodes that participate  in block validation.
Is a random selection mechanism.

Summary 

PoET is a consensus algorithm that was developed by Intel Corporation. It is  the one in the blockchain network that randomly permits who will create the  next block. 

∙ It works on the basis of the lottery principle. The chance of winning is  distributed equally to all participants in the network and everyone has the  same chance of winning. 

∙ It generates a random wait time for each node in the blockchain network. The  other nodes on the blockchain are dormant and are then engaged in other  work. 

∙ The node with the shortest wait time wins the block and can save it to the  blockchain. 

The workflow in PoET is very similar to Bitcoin’s PoW, but uses far less energy.

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