All About Synthchains

Introducing Proof-of-Value Synthetic Protocol

Masternodes are a type of software that enables digital coins to be “staked” in a wallet address run on a server in order to generate more coins. The process, called proof-of-stake (PoS), was developed by Sunny King in 2012 with the launch of Peercoin, a Bitcoin derivative. PoS Blockchains are widely thought to have specific advantages over the traditional hardware mining Proof-of-work (PoW) Blockchains that will make PoS the enduring dominant protocol. These advantages are principally the PoS protocol’s ease-of-use and environmentally-efficient value production methodology compared to the more technically complex and physically-overwhelming installation and running of costly, energy-intensive mining hardware such as that that is practiced in South China server farms today.

The problem with PoS Blockchains however is that they more often tend to produce too much supply too soon, limiting their appeal as currencies due to the relatively high inflation incurred in this disruptive value production paradigm. We have identified a middle way solution between PoW and PoS called Proof-of-Value (PoV). In PoV protocol mining, the mining of new coins never takes place, but rather, the protocol utilises smart contracts to replicate the effects of PoS value production on an economic scale that is more in line with PoW mining.

Due to the synthetic nature of the mining process in PoV smart contract mining, we call the protocol a Synthchain. Synthchains revolve around the application of a Synthchain Master Node, which is a smart contract with dual functions: the first function is that the smart contract can mine some of the contents of its wallet address via enabling a call tokens function in its contract code, and the second is that the tokens produced by the smart contract can at any point in time be sent back to the smart contract to reclaim a proportionate share to their share of total tokens in supply to that of the underlying value in the smart contract address.

By implementing algorithms for pricing that are specific to each coin’s specific Blockchain, Synthchains are as a result both environmentally clean and economically efficient. The synthetic mining process that we configure in our PoV smart contracts is also volume-weighted, biasing…

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