Hybrid Consensus Mechanism

Overview of Proof-of-Value Consensus Mechanism

The Meter network employs an innovative Proof of Value (PoV) consensus mechanism, which is a hybrid of Proof of Work (PoW) and Proof of Stake (PoS).

The Meter system consists of two tokens:

  1. MTR, the low-volatility currency token, which is created by PoW miners.

  2. MTRG, the governance token, which is used by PoS validators to validate transactions.

Unlike traditional cryptocurrencies, the Meter protocol separates the economic consensus, which determines how much new value will be added into the economy, from the record-keeping consensus, which prevents double spending. MTR represents the economic consensus while MTRG represents the record-keeping consensus.

This division of work mirrors the physical world where there are miners who extract gold or silver from the Earth and bankers who maintain the financial system. Miners and validators collaborate to make the Meter system more stable, secure, and scalable.

Why is Proof of Value better than Proof of Work and Proof of Stake?

Most existing blockchains mix currency creation with record keeping. However, they are fundamentally two separate consensuses.

Because Meter separates these, PoW mining of MTR will consume less energy due to the economic game design, and transactions can be processed really fast with instant finality. Also some of the problems with PoS, such as the long-range attack and rich-gets-richer problems, can be avoided.

This hybrid consensus mechanism also make Meter extremely secure. In order to attack the Meter network, you will have to pass the sybil resistance for both PoW and PoS. Because transactions settle instantly in the system, it is more secure than Bitcoin or ETH which have transaction roll back issues in their PoW systems.

More details about Proof of Value can be found here: https://www.meter.io/what-is-proof-of-value-consensus/‚Äč