What is proof of history and why does Solana use it?

Proof of history is a cryptographic innovation mainly associated with the popular blockchain Solana. While PoH is central to Solana’s function, despite many claims to the contrary, it is not a consensus mechanism. Instead, it is better considered a cryptographic time-keeping mechanism before consensus.

In this article, we will explore the basics of how proof of history works and how it has enabled Solana to become such a fast and affordable blockchain.

So what exactly is proof of history, and why is it needed?

Proof of history is one of Solana's core innovations, created to help increase the throughput of decentralized networks.

According to documentation published by Solana co-founder Anatoly Yakovenko, the vision behind Solana was to create a decentralized network that could “match the performance of a single node.”

Time verification and node communication take up significant computational power on decentralized networks. Yakovenko used the example of Hedera Hashgraph to illustrate this: “Each message that is seen by the network is signed and timestamped by a supermajority of the network. The median timestamp for the message is what Hashgraph calls ‘fair’ ordering. Each message has to travel to the supermajority of the nodes in the system, then after the message collects enough signatures, the entire set needs to be propagated to the entire network. As you can imagine, this is really slow.”

Instead, proof of history’s novel approach to timekeeping allows validators to simply trust encoded timestamps, which significantly optimizes the overall system. Instead of acting as a consensus mechanism, PoH works as a clock that helps order events and transactions. This reduces the overhead and latency of transaction ordering in a distributed network.

How does it work?

Proof of history allows the distributed system to agree on time without requiring communication and consensus beforehand. This is achieved by each validator on the network maintaining its own clock by encoding the passage of time in an SHA-256 sequential-hashing verifiable delay function (VDF).

SHA-256 is a Secura Hashing Algorithm that outputs a hash value of 256 bits, regardless of the input. The hash provided is pre-image resistant, meaning it cannot replicate its corresponding input.

PoH uses this algorithm to create a sequential hashing process where each hash is derived from the previous one. This process takes a certain amount of time to compute, creating a delay that can be measured. The resulting sequence of hashes forms a historical record that nodes can use to verify the sequence and timing of events.

When new transactions are sent, they use the most recent hash, which validators confirm into the sequence. By using the most recent hash, validators can confirm that the transaction occurred at a specific time period.

Since the necessity for consensus on time and sequence is removed, Solana is able to create a lengthy schedule of leaders who constantly take turns validating the network. By providing a verifiable order of events, PoH helps Solana achieve high throughput and low latency.