What is Proof of History?
Blockchains are designed to operate without the need of a middleman, with each recorded transaction requiring every node operating on the network to verify and confirm that it’s correct. Understanding who made the transaction is simple – with the use of private keys linking the transaction to one specific address – but figuring out when a transaction took place is much harder.
Taking a picture of yourself holding up the latest front page of a newspaper used to be an accurate way of determining time or timestamping a certain moment. But as there is no centralised clock in a blockchain to refer to and relying on an individual miner to provide an accurate account of the time they mine a particular block may not always produce a result that can be relied on, a group of developers created a method of validating time without relying on an outside, centralised source.
Proposed as part of the unique offering of the blockchain Solana and its native cryptocurrency SOL, the Proof of History model was created to solve this problem by encoding the passing of time into the blockchain ledger and providing a historic record that an event took place at a certain moment in time.
It does this using a process called Verifiable Delay Functions (VDFs). Unlike a proof of work mathematical puzzle that miners must solve that has millions of possible answers with only one solution, a VDF has a specific number of sequential steps to solve. Because a miner’s computing power must be applied in a specific order to solve the problem, it is now possible to figure out exactly how much time was taken to solve the VDF and provide a record of time.
Combined with the proof of stake (PoS) model, the computers on the Solana network continue to handle the validation of transactions that can now be added to the blockchain at a faster rate thanks to the addition of PoH which allows those transactions to be timestamped and verified quickly.
This is because the verification of the VDF is also carried out at the same time as the block is being mined, removing the need for a consensus to be reached by every computer on the network, speeding up the overall transaction time.