Saito - what is and how can fix the current blockchain vulnerabilities

[Darkuso]

Saito is a blockchain project that has been running for a while now, it addresses the underlying issues on blockchains that other projects have long overlooked (such as the 51% or double-spend attacks) by tackling both the technological and the economic aspects of these issues, as both play fundamental roles in all blockchain projects. The network is noteworthy for being more secure than Bitcoin while making payments not just to miners and stakers but also the nodes in the network that offer data services to users in the network.

Saito is a layer-one blockchain that requires its blocks to contain a certain amount of “routing work”. Routing work is derived from transactions fees so in practice this means they need to contain a certain amount of money. How much depends on how long it has been since the last block and how many hops the transactions containing these fees have taken to reach the block producer.

Routing work punishes participants in long-chains. Transactions that have traveled only a few hops are more valuable than transactions that have traveled many hops. Transactions with shorter routing paths are more valuable for making blocks. And their routing nodes ultimately get paid more too. So what “routing work” is really measuring is how efficient nodes are at collecting transactions and getting them into blocks.

Why do we need another blockchain?

There are two market failures that affect every non-Saito blockchain: a tragedy of the commons problem that encourages blockchain bloat, and a free-rider problem that pushes up the cost of using the network. These problems get worse and worse as networks scale and costs rise. In order to have a truly-scalable public blockchain we need to fix these problems.

How does Saito solve the 51 percent attack?

Saito ensures that producing blocks is always expensive. Honest nodes pay those costs with the fees they collect from users. Attackers must pay out-of-pocket and are guaranteed to lose a quantifiable amount of money with each block they produce. There is no point at which this cost-of-attack falls below zero.

How does Saito solve the fifty-one percent attack?

Unless attackers match the amount of work done by the overall network, they either cannot produce blocks as quickly as honest nodes or are able to produce blocks but not collect payments. Attackers must either go bankrupt or permit others to add work to their chain.

Surely there is a 51 percent attack in there somewhere?

No. Attackers who have a mere 50 percent of network resources lose about half their money each block. The cost-of-attack scales with the volume of network fees collected by others in the network.

How does transaction rebroadcasting work?

Saito uses a technique called Automatic Transaction rebroadcasting. This forces old transactions to compete with new ones for space on the blockchain. In market equilibrium, the most profitable strategy for block producers is to ensure the same amount of data is deleted from the chain as is added to each block.

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