Crypto Wombat
5 min readNov 25, 2021

Saito’s blockchain architecture and consensus mechanism — a cryptosphere game changer!

Things change rapidly in the world of blockchain technology. To stay ahead of the game it’s best to try and be an early adopter when new innovations come along.

That’s why I’m writing about Saito’s new blockchain architecture and consensus mechanism, as I believe it’s going to revolutionize the way blockchain transactions are carried out.

Let’s start with a quick look at how blockchain tech has developed over the past decade or so.

*** Brief History of Blockchain ***

It all started back in 2008 when Satoshi Nakamoto built the first functioning blockchain which became the basis for the bitcoin ledger. It was built with timestamped blocks and used a consensus mechanism known as Proof of Work (PoW).

The PoW algorithm is set up to only allow a new block to be added to the chain every 10 minutes. To achieve this, it uses a difficulty parameter that slows down the rate at which blocks can be created and added to the chain. In other words, if bitcoin mining is happening too fast, the computations are made more difficult to slow things down. If the mining is too slow, the computations are made easier to speed things up.

In 2014, the Ethereum blockchain was launched which allowed code to be embedded in the blocks, opening the door to smart contracts. Ethereum also uses the PoW consensus mechanism, but intends to move to a Proof of Stake (PoS) consensus mechanism with the launch of Ethereum 2.0 sometime in 2022 (hopefully). Other new blockchain platforms are moving away from PoW too.

The reason for this is that PoW has been shown to be highly energy intensive, costly, and resource hungry.

*** 3 Most Common Alternative Consensuses ***

— -Proof of Stake (PoS) — -

PoS is the most common of all the alternative consensus mechanisms and is planned for use in Ethereum, the second largest blockchain platform after bitcoin. PoS doesn’t reward miners for creating blocks, but rather distributes transaction fees to stakers — coin holders how are willing to lock up their tokens as a deposit against cheating. This makes PoS more energy efficient, quicker, and less costly than PoW. The main problem is that it hasn’t been proven to be as secure as PoW.

— — Delegated Proof of Stake (DPoS) — -

DPoS is similar to PoS, but coin holders are allowed to use coins to buy nodes that may be used to add blocks. Coin owners can also vote to change network parameters. This gives coin holders more influence on the platform and cryptocurrency. The problem with this is that validators who own a high number of coins can exert more influence on transaction verifications, leaving it open to corruption.

— -Practical Byzantine Fault Tolerance (PBFT) — -

PBFT involves sending out transaction details to all nodes within a network. If the majority approve the transaction, then it is validated and confirmed. Therefore, a high number of nodes is needed in order for the transaction to be trusted, otherwise malicious nodes may try to overwhelm the network. The PBFT algorithm is used by Ripple, Hyperledger, and Stellar.

*** Saito Consensus ***

Saito is a new blockchain platform that uses an improved architecture and consensus mechanism. The Saito protocol is similar to bitcoin in many respects. Saito rewards are made up from user fees and are awarded to the nodes that make up the peer to peer network. But the consensus mechanism is where it differs considerably from the bitcoin platform.

Saito eschews the “Proof of” convention for it’s consensus mechanism. It can be described as a Proof of Routing Work algorithm. In Saito consensus it is not computational work or staked tokens that are rewarded, but rather the work of moving users transactions around the network The Saito blockchain also relies on charging a rental fee for transactions to remain on the blockchain. This helps to rid the network of old blocks, keeping just the header-hash to prove the integrity of the chain.

Once the number of blocks exceeds a certain Rebroadcast limit, old blocks or unspent transactions outputs (UTXOs) get pruned from the chain. But the consensus mechanism requires UTXOs with sufficient value to cover the rental fee (rebroadcast fee) to be rebroadcasted, i.e. they will be present in the new block.

As well as the rebroadcast fee, Saito runs two algorithms, one to define who can produce blocks and the other to set the reward amount for creating a block. In this way the Saito consensus can control both the difficulty of the work and the payout amount, thus regulating the blockchain efficiently. This method ensures that the block production cost remains higher than the reward from the network.

The difficulty is altered by insisting that nodes do a set amount of ‘Routing Work’. Rewards are given in the form of “golden tickets” which involve solving a hashing puzzle that cannot be solved in advance. This means there is a cost to releasing the reward, which means that attackers cannot launch circular attacks — collecting their fee then automatically creating more routing work. If a puzzle is not solved the reward is burned, with all burned fees eventually being cycled back into the network when the containing blocks are removed from the chain.

Due to its unique design, the Saito consensus mechanism is smarter in the way it rewards network participants. By paying the network for bandwidth the network is incentivised to scale, and compete to provide useful services to users. It is also less prone to attack, less energy intensive, and less costly than the PoW consensus.

*** Benefits of Saito ***

Saito is beneficial for all participants. Here’s how:

- Powerful Blockchain Architecture — Saito is ideal for high data usage apps like social media and games.

- Web 3.0 friendly

- Easy to get started — Saito uses DApp which is a favorite with developers due to its simplicity.

- Democratic — Anyone can start up a node and start making money on the decentralized and open-source stack.

** TLDR ***

Saito uses a new consensus mechanism that overcomes the problems inherent in the PoW consensus, which is used by bitcoin.

All participants have an equal opportunity to be rewarded in the Saito blockchain and it is more resilient and secure against attacks.

*Disclaimer — I’m an early investor and believer in Saito.