Why was a Proof of Authority consensus mechanism chosen?
The BeefLedger blockchain is a Proof of Authority network deployed on the Ethereum mainnet. In effect, it can be thought of as a side chain.
Rationale
The POA protocol was selected due to the following beneficial properties, which are particularly relevant to highly regulated supply chain ecosystems such as those that apply in food systems:
The costs of proposing data updates on a POA are not exposed to the volatility of gas fees on the mainnet;
As such, we could provide certainty to supply chain actors, which is critical in finely tuned supply chains that operate in a 'high volume / low margin' market environment; and
Maintain a mechanism for the management of membership admissions, which provides the necessary frameworks to support regulatory requirements in relation to KYC identification. Our membership admission processes are very lite, but do require applicants to satisfy basic KYC conditions at critical moments.
Design considerations
A blockchain consensus-based data ecosystem is a social association par excellence.
A (relatively) open network of decentralised data proposing and validating participants, in which no single actor either controls the production, collection, validation, storage or dissemination of data, is in effect a voluntary association.
It is a voluntary association because no-one is compelled to join or remain a member of the network. The POA blockchain ecosystem, therefore, involves members’ identity, their reputation and associated member rights to undertake various actions and decisions.
Axes of Decentralization
Decentralization has many dimensions. Vitalik Buterin summarises at least three axes of decentralization:
Technical centralization / decentralization - the number of machines involved in the network;
Political centralization / decentralization - the effective concentration of ownership and control over the machines; and
Logical centralization / decentralization.
Elsewhere, we expand on this classification of decentralisation. For our purposes, the first two dimensions are relevant to our design considerations. Our general design philosophy is guided by the following considerations:
The more participating validators the better (technical decentralization)
The fewer barriers to new validator entry the better (political decentralization).
A large pool contributes to system security and also tackles collusion risks head on. Specific design parameters give operational effect to these high order considerations. Our distinctive design approach and positioning is shown in the following diagram:
Most supply-chain blockchain projects are somewhere in the 'red zone'. Very few active participants, usually fully focused around the producer end of the spectrum (no room for the consumer at all), and fully locked into a token-economic architecture that privileges those that commit the largest amount of funds (staking).
The BeefLedger design at both a technical and political level aims to increase openness and multitudinous. This means (1) many computers; (2) many actors; (3) decision-making capabilities within network data related activities that are not based on how much $ you have (anyone can participate and contribute).
Identities & Reputations
Central to the equilibrating dynamics of the proposed consensus mechanism is the value of identity reputations. Identity reputations provide a basis of exogenous fiat credence claims (that is, the authority originates from outside of the consensus community), with the critical caveat that the status must be validated by the consensus community at large (finality and reputation), and which can be revoked by the consensus community.
Membership
An association is nothing without members. The BeefLedger Proof of Authority network (which can in some senses be conceived as a digital association) has at its core a membership that is based on our existing supply chain and research community.
To enable the network to organically grow, it is necessary to put into place:
Mechanisms by which new participants can become members; and
The rights, authorities and responsibilities of members (and possibly different types of members).
The consensus community is anyone involved in the beef supply chain. No prima facie exclusions are imposed on participation. Indeed, ensuring a diverse ecosystem of stakeholders, drawn from across the entirety of the supply chain, is an important strategic objective in terms of delivering credibility and dependability in zero trust conditions. The consensus community comprises eligible members who act as data proposers and validators. Validators can also be the operators of the machine nodes of the network, but do not have to be. Validators can take the form of;
Consumers
Retailers
Wholesalers
any other member who has a vested interest in the supply chain
Militating collusion risk depends on growing the number of participating validators on the one hand, and critically, in doing so increasing the “degrees of separation” between validators. Once membership is secured, a member can fulfill a number of roles on the network, namely;
Data proposer
Data witness
Data attester
Network Vault (data storage & block sealing)
Data Oracle
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