Smart contracts are intended to take traditional contract clauses and translate them into computer code which would be able to self-enforce/self-execute itself once the parameters of the agreement were met. It was created as a means of circumventing the intermediaries between transacting parties, avoiding human error, and minimize the occurrence of malicious or accidental exceptions.
Smart contract solutions do not differ much, from a methodological standpoint to any other software solutions. A problem must be determined, and a solution is designed using smart contracts as a vehicle. Once identified, the creator of the smart contract must specify the overall objectives and the involved actors associated with the solution. Lastly, Oracles (programs that provide smart contracts with the data they need from the external world), digital assets, and legal lexicon are added to determine the trigger and deployment of the smart contract.
The XELS Blockchain will be using smart contacts to facilitate better the purchase and distribution of Tokens, carbon credits, airdrops, redistribution mechanism, and more. Using these smart contracts will allow XELS to leverage the following attributes of smart contracts.
Hybrid Mining, What and why?
The public blockchain is a distributed system with the immense volume of users. Distributed ledgers (blockchains) are used to record and store information about all transactions inside the network. No central administrator or authority regulates operations in the blockchain. Decentralization is the main reason why the need for a consensus mechanism with unadulterated votes has arisen.
The network collectively agrees upon the contents of the blocks – essential elements of blockchains. Its community ensures the data consistency inside the blockchain, creates the trust (the proof of data consistency) and helps to avoid double spending. Every new transaction goes through the consensus process while the network accepts it. The main aim of consensus is to secure the network and protect it from the malicious behavior of its users.
Most public blockchains utilize two types of consensus mechanisms – PoW or PoS. However, XELS blockchain uses both kinds of consensus – the so-called hybrid mining. To understand what is behind our decision to use this type of mining, first, you need to comprehend the features as well as the pros and cons of these mechanisms.
PoW + PoS – Hybrid Mining
So, why did we combine PoW and PoS in the algorithm named hybrid consensus mechanism? If you read all of the above, you might have already understood the primary incentive behind our decision.
Employing PoW and PoS, we’ve created equal terms for all users and enhanced their engagement within XELS blockchain. They can use one of the mechanisms or both of them, increasing their chance of getting rewards in the form of XELS cryptocurrency for creating new blocks.
PoS incites users to hold their coins. They receive additional profit just letting their stock sit and no spending it. Unlike PoW that drives users to upgrade their hardware, they don’t need to spend a lot of money on minting.
The hybrid algorithm has a higher level of security when compared to systems with PoW\PoS consensus. To make any malicious manipulation within XELS blockchain one needs to control 50+% of the hash rate and 50+% of all XELS coins in the network. Taking into consideration the required financial resources required for such an attack, the impossibility of such action becomes clear. Only those with the greatest desire to destroy XELS and a few millions of dollars on their account can have a shot at the security of our blockchain.