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Core’s Satoshi Plus Consensus Mechanism

10 min read
Core’s Satoshi Plus Consensus Mechanism

At the forefront of Bitcoin-alignment, Core is powered by a unique consensus mechanism known as Satoshi Plus consensus. This novel consensus mechanism integrates the strengths of Delegated Proof of Work, Delegated Proof of Stake, and Non-Custodial BTC Staking to optimize for security, decentralization, and scalability. Through its tripartite architecture, Satoshi Plus enables a new approach to scaling Bitcoin in a way that makes Bitcoin the primary benefactor and beneficiary of the Core blockchain’s success.

The foundational idea behind Satoshi Plus consensus is alignment. Satoshi Plus aligns Bitcoin with its complementary smart contract platform, Core. This begins with Delegated Proof of Work, which allows Bitcoin miners to join in securing Core through Satoshi Plus. Secondly, all BTC holders can participate in Core’s security through Non-Custodial BTC Staking, which enables them to stake their BTC without giving up control of their private keys. Complementary to that Bitcoin involvement, Delegated Proof of Stake brings Core users into the fold, as they can stake their CORE tokens to participate in network security.

Through combining the protection of Bitcoin miners, BTC stakers, and CORE stakers, Satoshi Plus unlocks new levels of decentralized security. Additionally, Satoshi Plus uses state-of-the-art validator election process to make the process efficient, scalable, and reliable. As a result, Satoshi Plus addresses the blockchain trilemma, which denotes the challenge of achieving decentralization, security, and scalability simultaneously. Bitcoin is the primary force behind security and decentralization, while Core’s remaining architecture aligns Bitcoin’s superpowers with scalable infrastructure.

Learn about BTCfi and Core’s involvement here.

Key Takeaways

Integration of Multiple Consensus Mechanisms: Satoshi Plus combines Delegated Proof of Work (DPoW), Delegated Proof of Stake (DPoS), and Non-Custodial BTC Staking to enhance security, decentralization, and scalability.

Alignment with Bitcoin: The mechanism leverages the existing Bitcoin network by allowing Bitcoin miners and BTC holders to participate in securing the Core blockchain, aligning the interests of both ecosystems.

Decentralized Validator Election: Validators are elected through a combination of delegated hash power from Bitcoin miners, staked BTC, and staked CORE tokens, ensuring a highly decentralized and secure network.

Overview of Satoshi Plus Consensus Mechanism

The Satoshi Plus consensus mechanism is at the heart of Core's approach to scaling the Bitcoin blockchain.

Satoshi Plus combines the strengths of Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS), and Non-Custodial BTC Staking to optimally balance decentralization, security, and scalability. This tripartite model leverages Bitcoin miners' hash power, the BTC asset’s immense value, and the efficiency of DPoS.

Key Features

Bitcoin-Alignment: Satoshi Plus offers a low-risk, low-cost method for both Bitcoin miners and BTC holders to earn supplemental rewards and yield. By providing this added strength to Bitcoin, Core becomes uniquely positioned as the dream smart contract platform partner for Bitcoin.

Security: Bitcoin is the gold standard in security. Thus, by aligning with Bitcoin miners and BTC holders, Satoshi Plus gains significant advantages in terms of security, particularly when compared to other scalable consensus mechanisms. When combining Bitcoin hash power, staked BTC, and staked CORE, the incentives upholding the Core network are immense.

Decentralization: Satoshi Plus’ validator set is elected by three different parties: BTC miners/mining pools, BTC holders, and CORE holders. Each of these groups offers substantial decentralization in isolation, so their balanced combination introduces a new era of decentralization.

Scalability: DPoW, DPoS, and Non-Custodial BTC Staking merge in an efficient validator election mechanism. The resulting validator set is able to secure the network and create blocks in an optimally efficient and high-performance manner.

The Role of Validators in Satoshi Plus

Validators in Satoshi Plus are ultimately responsible for transaction validation and block creation on the Core blockchain. The election of validators hinges on three independent, yet connected parties: Bitcoin miners/mining pools, CORE stakers, and BTC stakers.

Bitcoin miners/pools “vote” by delegating their BTC hash power to select validators.

CORE stakers “vote” by delegating their CORE tokens to select validators.

BTC stakers “vote” by delegating their BTC to select validators.

This combination of Delegated Proof of Work, Delegated Proof of Stake, and Non-Custodial BTC Staking constitutes Core Chain’s Satoshi Plus consensus.

Presently, the 23 validators who receive the highest combination of delegated hash power, staked CORE, and staked BTC are elected to the validator set. The highest combination is determined by a hybrid score, which balances the three elements.

The Role of Proof of Work in Satoshi Plus

Proof of Work (PoW) is the most secure consensus mechanism in the world, upheld by Bitcoin miners who dedicate substantial computational power to validate transactions and secure the Bitcoin network. Satoshi Plus expands the protective power of these miners through Delegated Proof of Work.

Bitcoin Mining Integration

The Bitcoin Mining integration in Satoshi Plus leverages the robust network of existing Bitcoin miners. By incorporating their hash power, Core Chain enhances the overall security of its blockchain. This approach efficiently utilizes the immense computational resources already employed in Bitcoin mining, reducing additional resource expenditure while maximizing its utility and rewards accrual.

Delegated Proof of Work (DPoW) Functionality

To participate in Satoshi Plus, miners and/or mining pools simply write two additional pieces of information in the op_return field as they produce a new Bitcoin block:

  1. The address of the Core Validator the miner wants to delegate their hash power to.
  2. The address that the miner would like its CORE token rewards to be sent to.

In exchange for participating in the consensus process by delegating their hash power to vote for Validators, miners receive supplemental CORE token rewards in addition to their existing bitcoin rewards. In sum, Satoshi Plus receives Bitcoin miner participation and Bitcoin receives better compensated (i.e. more highly incentivized) miners.

The Role of Proof of Stake in Satoshi Plus

Proof of Stake is a well-known consensus mechanism used by many blockchains, including Ethereum. In isolation, Proof of Stake involves certain risks in terms of centralization, leading to questions around its long-term censorship-resistance. However, in Satoshi Plus, a form of Proof of Stake known as Delegated Proof of Stake is balanced with Bitcoin’s Proof of Work to maintain its scalability without introducing the same isolated risks. Delegated Proof of Work is a maximally inclusive instantiation of Proof of Stake where all token holders, regardless of the size of their individual holdings.

Delegated Proof of Stake (DPoS) Explained

Delegated Proof of Stake (DPoS) is integral to Satoshi Plus. It is the primary method by which Core users and CORE token holders participate in the security of the Core blockchain. Their involvement optimally aligns the interests of Bitcoin network participants and Core network participants, as all are encouraged to grow the Core ecosystem.

To participate in consensus, any CORE token holder can stake their CORE tokens with Core Validators, thus voting for those Validators in the same way that a miner might delegate its hash power to vote for them.

Similarly, just as miners receive rewards, CORE token stakers also receive CORE token rewards for contributing to Satoshi Plus consensus. One particular advantage of Delegated Proof of Stake compared to standard Proof of Stake models is that the former permits all token holders to participate equally, while the latter sometimes only permit large holders to stake.

The Role of Bitcoin Staking in Satoshi Plus

Satoshi Plus introduces the first ever implementation of BTC staking with its Non-Custodial BTC Staking component. “BTC staking” means that BTC holders can stake their BTC to secure the Core blockchain in exchange for earning CORE token rewards. “Non-Custodial” means that BTC stakers with Satoshi Plus never give up custody of their Bitcoin private keys. Their BTC never leaves the Bitcoin blockchain. Satoshi Plus introduces no additional trust assumptions for Bitcoin users. Thus, BTC staking with Core is the easiest and safest way to earn more while simply holding BTC.

Non-Custodial BTC Staking Explained

Satoshi Plus’s methodology for integrating bitcoin staking centers on absolute time locks, a Bitcoin-native cryptographic feature that locks up the outputs of a transaction for a pre-defined period of time, during which they can’t be spent. Rather than holders giving up custody of BTC to external staking, stakers with Satoshi Plus merely place their BTC in absolute time locks as part of a transaction, and the transaction can be designed to return the output after the time period has elapsed. Within that transaction, stakers must include a script containing the same information that Bitcoin miners include in their delegated blocks:

  1. The address of the Core Validator the staker wants to delegate their bitcoin to.
  2. The address that the staker would like their CORE token rewards to be sent to.

Bitcoin stakers earn a yield on their otherwise passive bitcoin in the form of CORE token rewards, for however long they set the time-lock (and thus for however long they delegate their bitcoin to vote for Validators on Core Chain). The end result is that billions of dollars in underutilized Bitcoin value will become productive, remunerating stakers while also expanding the scope of Bitcoin’s utility.

How Do Rewards Work in Satoshi Plus

In exchange for participating in the validator election process in Satoshi Plus, the Bitcoin miners, BTC stakers, and CORE stakers earn rewards in the form of CORE tokens. These rewards serve as incentives for validators and their various delegators to act in the best long-term interests of the Core network.

CORE Rewards Distribution

Rewards are derived from CORE block rewards to be paid out over an 81 year period and transaction fees paid in CORE tokens. Following successful block production, validators earn these CORE token rewards.

Since elected validators are entirely dependent upon their delegators, when they receive block rewards and transaction fees for producing blocks, they pay the majority of their rewards back to their delegating miners, CORE stakers, and BTC stakers.

Rewards paid out to delegators are allocated proportional to their voting power. So, whatever weight their vote carried in the hybrid score calculation is the proportion of rewards they will receive from validators.

For further details, you can explore the Core Chain's white paper.

Tokenomic Considerations

Understanding the economic principles and token distribution of Core’s native CORE token is crucial for grasping the full potential alignment model of Satoshi Plus.

The CORE Token

CORE serves as both the utility and governance token within the Core network. Its functionalities encompass, but are not limited to:

  1. Paying for transaction fees/gas;
  2. Staking on the Core network;
  3. Participating in on-chain governance for the Core network.

Sound Supply

Mirroring Bitcoin’s principles, CORE has a fixed supply cap of 2.1 billion tokens. In addition to this cap, a portion of all block rewards and transaction fees will be burned, following a model akin to Ethereum’s “Ultra Sound Money.” The precise burn percentage will be decided by the DAO. Consequently, the total supply of CORE tokens will steadily approach, but never exceed, the 2.1 billion limit.

CORE Emissions

CORE tokens will be distributed as block rewards over a span of 81 years. This extended distribution period is designed to ensure long-term success by adequately incentivizing network participants, eventually transitioning the network to rely solely on transaction fees for compensation.

The CORE block reward can also be seen as a supplementary income source for Bitcoin miners. With the knowledge that Bitcoin block rewards will cease around 2140, a blend of transaction fees and rewards from networks like Core Chain will help sustain miner incentives. Given Bitcoin’s monetary policy and its halvings, these supplementary payouts may become essential much sooner. By becoming validators on the Core network and leveraging their existing hash power, Bitcoin miners can earn rewards from both Bitcoin transactions and CORE tokens.

Security and Decentralization

The tripartite structure constituting Satoshi Plus is the main vector of defense against vulnerabilities. In addition to that balanced structure, however, Satoshi Plus also includes supplemental participants designed to double-check systems and enhance security throughout the system.

Relayers

Since Satoshi Plus’ architecture directly interacts with the Bitcoin Network, it is essential to verify that cross-chain interactions are reported truthfully. Thankfully, owing to Bitcoin’s transparent design, everything is out in the open, making data easy to collect and verify.

Relayers are the entities primarily responsible for verifying that Core receives accurate data from the Bitcoin blockchain. As an example, when Bitcoin miners produce a Bitcoin block and delegate that block to validators on Core, relayers are responsible for making sure the miner and validators are in alignment. Relayers accomplish this by transmitting Bitcoin block headers to the Core network. Importantly, anyone can become a relayer by registering with the network and locking up a refundable CORE token deposit.

Verifiers

As a failsafe, Satoshi Plus also involves another security-provider known as Verifiers. Verifiers play a crucial role in identifying and reporting malicious activities within the network. When a verification flag is successful, it can lead to the reduction of a malicious validator’s rewards or stake, or even their outright removal (jailing). Verifiers are rewarded for their monitoring efforts through block rewards. The Core network allows anyone to become a verifier.

Satoshi Plus Security

As a whole, the security provisions within Satoshi Plus present a unique challenge for attackers trying to compromise the system. For example, Sybil attacks, where an attacker creates multiple false identities, are mitigated by the breadth of Satoshi Plus, incorporating a multitude of decentralized and highly valued security participants.

Additionally, the system defends well against 51% attacks. With such an immense economic base spread across multiple assets, overtaking 51% of the network and exercising malicious control is economically unwise. Similar to how attacking the Bitcoin Network would require substantial capital and willingness to take substantial losses, the Core network is upheld by such principles.

Composability and Scalability

Satoshi Plus is the guardian of Bitcoin’s complementary and hyper-scalable smart contract platform, Core. The consensus mechanism’s architecture enables Core to exhibit scalability features far beyond the capabilities of Bitcoin.

EVM-Compatible Smart Contracts

Core is natively EVM-compatible, enabling seamless deployment of Ethereum-style smart contracts. This compatibility ensures that developers can easily port their existing applications onto Core without extensive modifications.

Developers also benefit from familiar Ethereum development tools, such as Solidity and Truffle, making for a smoother transition and faster development cycles. This seamless compatibility fosters an inclusive ecosystem where many blockchain developers can simply interact and innovate within the Core ecosystem.

Governance and Community Ownership

As a Bitcoin-inspired and Bitcoin-aligned blockchain, Core preserves immutability, permissionlessness, and transparency. Its base structure is preserved through decentralized consensus. In order to balance such stability with flexibility, certain components of Satoshi Plus are variable based on the determinations of CORE token holders in the form of Core DAO.

Core DAO

The Core DAO is the decentralized autonomous organization tasked with upholding the security, stability, and sustainable future of the Core blockchain. Presently, Core is underway on its process of progressive decentralization first outlined in the Core White Paper. Within its defined jurisdiction, Core DAO decisions are made via on-chain voting after much deliberation on public platforms. Voting power is weighted by the number of tokens held, meaning those with more significant stakes in the network have more influence since they are the most invested in the network's success.

Additionally, similar to BIPs on Bitcoin or EIPs on Ethereum, any DAO member can submit Core Improvement Proposals (CIPs) in an attempt to convince the broader community to upgrade some structures of Core.

In terms of what Core DAO determines, its responsibilities include (but are not limited to) adding to the number of validators, regulating governance practices, and setting the percentage of block rewards and transaction fees that are burned. Although limited, this governance apparatus enables the network to have a balanced degree of adaptability.

Satoshi Plus v2

In the future, Satoshi Plus is designed to grow its influence even further than the base Core blockchain. In the future, Core can use its delegated hash power, staked BTC, and staked CORE to secure other blockchains looking to bootstrap their security. This model is not dissimilar to what Eigenlayer promises to do with Ethereum or what Babylon promises to do with Bitcoin. The core difference is that Core has its own base layer with existing staked assets.

Going Multi-Chain

Satoshi Plus currently upholds only the Core blockchain. In the future, the security provided by Satoshi Plus can flow through Core and into securing additional blockchain ecosystems. This will add to the rewards base earned by validators and their delegating Bitcoin miners, BTC stakers, and CORE stakers.

Going Multi-Chain

One significant element of this multi-chain future is the capacity for Bitcoin Re-Staking. Currently, there are multiple thousand BTC staked with Satoshi Plus to secure Core. Re-staking these BTC would enable stakers to earn additional rewards tied to the chains that Core provides security to.

The App Chain Thesis

One of the most exciting promises of Satoshi Plus v2 is the potential for App Chains, which are Core-secured blockchains designed for particular verticals. For example, one app chain could be specifically created for hosting blockchain games. It would then be optimally designed for that particular purpose, making the best environment for gaming users and developers. Simultaneously, that app chain can be secured by Core and Satoshi Plus, which can accrue more rewards value back to BTC stakers, CORE stakers, and participating Bitcoin miners.

Frequently Asked Questions

What is the Satoshi Plus consensus mechanism?

Satoshi Plus is a unique consensus mechanism utilized by the Core blockchain that integrates Delegated Proof of Work (DPoW), Delegated Proof of Stake (DPoS), and Non-Custodial BTC Staking. It aims to optimize security, decentralization, and scalability by leveraging the strengths of Bitcoin miners, BTC stakers, and CORE token stakers.

How does Satoshi Plus align with Bitcoin?

Satoshi Plus aligns with Bitcoin by allowing Bitcoin miners and BTC holders to participate in securing the Core blockchain. Bitcoin miners can delegate their hash power, and BTC holders can engage in Non-Custodial BTC Staking, both of which enhance the security and decentralization of Core while providing rewards to participants.

What roles do validators play in the Satoshi Plus mechanism?

Validators in Satoshi Plus are responsible for transaction validation and block creation on the Core blockchain. They are elected by delegations from Bitcoin miners, CORE token stakers, and BTC stakers. The top 23 validators with the highest combined delegated hash power, staked CORE, and staked BTC form the validator set.

How does Delegated Proof of Work (DPoW) function in Satoshi Plus?

In Satoshi Plus, Bitcoin miners and mining pools can delegate their hash power to specific Core validators by including additional information in the Bitcoin block's op_return field. In return, they receive supplemental CORE token rewards, enhancing their overall compensation while participating in Core's consensus.

What is Delegated Proof of Stake (DPoS), and how is it implemented in Satoshi Plus?

Delegated Proof of Stake (DPoS) in Satoshi Plus allows CORE token holders to stake their tokens and delegate their voting power to select validators. This method includes all token holders, ensuring broad participation and maintaining scalability without centralization risks.

What is Non-Custodial BTC Staking, and how does it work?

Non-Custodial BTC Staking enables BTC holders to stake their BTC without relinquishing control of their private keys. BTC stakers use absolute time locks, a Bitcoin-native cryptographic feature, to lock their BTC for a set period. They earn CORE token rewards while their BTC remains secure on the Bitcoin blockchain.

How are rewards distributed in the Satoshi Plus consensus?

Rewards in Satoshi Plus are distributed as CORE tokens to Bitcoin miners, BTC stakers, and CORE stakers for participating in the validator election process. These rewards are derived from CORE block rewards and transaction fees, and are allocated proportionally based on voting power.

What security measures are incorporated in the Satoshi Plus consensus?

Satoshi Plus incorporates multiple security measures, including relayers and verifiers. Relayers ensure accurate cross-chain data reporting, while verifiers identify and report malicious activities. This multi-layered approach enhances security and defends against attacks like Sybil and 51% attacks.

Is the Core blockchain EVM-compatible?

Yes, the Core blockchain is EVM-compatible, allowing developers to deploy Ethereum-style smart contracts seamlessly. This compatibility ensures easy migration of existing applications and utilization of familiar development tools.

What is the future vision for Satoshi Plus v2?

Satoshi Plus v2 aims to extend its security model to additional blockchain ecosystems. This multi-chain approach would enable Bitcoin re-staking, securing other chains while providing additional rewards to BTC stakers, CORE stakers, and participating Bitcoin miners. It also envisions App Chains tailored for specific use cases like blockchain gaming.

Learn more about it from Core Chain’s White Paper or explore the workings of the Satoshi Plus Consensus mechanism.

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