Proof-of-work is the blockchain protocol used by bitcoin. Proof-of-work began a revolution: it enabled the creation of secure, permissionless, distributed networks. But to achieve consensus for each new block, proof-of-work requires an enormous amount of energy: an amount so large that the supported blockchains struggle to sustain and scale to the performance requirements of global networks.

This enables networks to scale horizontally, increasing performance by incorporating additional nodes, rather than vertically, through the addition of more powerful hardware. The resulting difference in energy use can be analogized to that between a household and a small country. PoS is positioned scale to the mass market; PoW is not.

Ouroboros processes transaction blocks by dividing chains into epochs, which are further divided into time slots. A slot leader is elected for each time slot and is responsible for adding a block to the chain. To protect against adversarial attempts to subvert the protocol, each new slot leader is required to consider the last few blocks of the received chain as transient: only the chain that precedes a prespecified number of transient blocks is considered settled. This is also referred to as the settlement delay, and is the mechanism through which the ledger is securely passed between participants.

Ouroboros is a meld of innovative technology and philosophy. Its research explores how we behave as a society, to discover an ideal balance - defined through game theory - between individual and collective interests. Ouroboros’ incentive mechanism rewards participants for their honest participation, and disincentivizes dishonest actors. It is a stable and sustainable foundation for permission networks that are built to endure: the infrastructure of the future.