Near blockchain Protocol

The NEAR protocol is a very young blockchain and rather still unknown to the general public. The NEAR protocol can handle almost 100,000 transactions per second and supports smart contracts.

What is the NEAR protocol?

NEAR Protocol is a blockchain that can process transactions at lightning speed on which smart contracts and decentralized applications (dApps) run. This means that NEAR Protocol is therefore a competitor to Ethereum (ETH). It has even been called the 'Ethereum killer'.
NEAR's underlying blockchain is as old as Ethereum's. NEAR's mainnet has been around since 2020, though. Since then, the NEAR team has continued to develop the blockchain.

Why did the developers come up with the NEAR blockchain? The reason is that Ethereum blockchain is incredibly inefficient. Developers could build applications on the Ethereum smart contract just fine but it involved a lot of problems and a lot of time before a transaction could be executed. It also took a long time for the network to validate the transaction.

Not only users suffered from this, but also developers. Users want to use a blockchain that costs little, but is also fast. NEAR could process about 100,000 transactions per second, which is different from how much Ethereum or Bitcoin can process per second. NEAR should be faster but also more efficient.

NEAR blockchain

Sharding  Nightshade
The reason NEAR can achieve such a high transaction speed is due to Nightshade. Nightshade is the consensus algorithm of NEAR. With Nightshade, consensus is not reached across the entire network in the traditional way, but only in small groups. These groups are called shards and consist of multiple validators.
In sharding, multiple highways are built so that transactions no longer have to go through one lane. By spreading transactions out, more transactions can be processed at once and transaction costs are reduced.
Click here to read more about sharding.

Having multiple "highways" eliminates the need for the entire network to validate (reach consensus on) a transaction. This allows transactions to be processed much faster. This is because it is inefficient if every transaction has to be validated by all nodes. Each machine works in a different way which means that it can take longer to process a transaction.

Thus, shards process a small portion of the total transactions, so that many more transactions can be performed in a short period of time.

The concept of Nightshade is best illustrated with an example: suppose there are 50 of you and you are all in an escape room. You have one hour to get out of the room. If you have solved all the puzzles within the time, then you have won. This is a team effort and you have to solve this together. Everyone has an idea and everyone wants to do something. An escape room is often the recipe for chaos. Because it is not defined who does what, it will take a long time to solve the puzzles.

The most efficient way is if the group is broken up into smaller groups. Each group is given a task in the escape room. The chance of solving the puzzles within the time limit is much higher than if everyone just does something and starts somewhere without a plan. A smaller group can communicate together more easily than if there were 50 people. That group can then focus on a specific task.

The previous concept of the escape room also applies to Nightshade.

Proof of Authority (PoA) and Proof of Stake (PoS)
The Shards of Nightshade use the proof of authority (PoA) consensus mechanism.
A node within a network has a lot of influence. But for a node to verify a transaction on the blockchain, such a node must have a high reputation. The higher the reputation, the higher the probability that this node is allowed to verify the transaction on the blockchain. These nodes can increase their reputation by being active on the network and doing a good job. This means that the node must be online often, and when it receives transactions to validate, they must verify and validate them quickly. This means more reward for him.

When nodes do a poor job, they receive a poor reputation. As a result, they receive little reward. 

Doomslug
If a transaction has been verified by the miner on the blockchain and the network has validated this transaction, then you can find this transaction on the blockchain. It always takes a while when the transaction is added to the blockchain. This often takes a few minutes.

Doomslug must ensure that the blocks (the transactions) are added to the blockchain right after the transaction is made. As a user, you no longer have to wait before you can see that your transaction has been approved.

With Doomslug, the network can retrieve a block. This is done by "slashing" a node. This means that the node (which validated the transaction) has temporarily lost its spot. This is the case when blocks have been added to the blockchain wrongfully (for example, fraudulently).

Doomslug thus works much faster than the traditional way of getting transactions verified and validated on the blockchain. The transactions no longer need to be verified by the entire network before it gets onto the blockchain.

A major drawback is that in order for the mechanism to work properly, you do need at least half of the validators. If this is not the case, for example because half of them are offline or because half of them have been scrapped, the mechanism would no longer be able to guarantee security as it should.

Rainbow bridge

NEAR is also called the Ethereum killer, but behind the scenes NEAR actually wants to cooperate with Ethereum. To this end, they have designed the Rainbow Bridge. This is a bridge that ensures that the NEAR blockchain and Ethereum blockchain can communicate with each other. Normally, this is not possible because each blockchain is different. So by using a bridge, they can. This makes NEAR interoperable with Ethereum.

For example, it is possible to transfer tokens with an Ethereum protocol, such as ERC20 and ERC721, to NEAR Protocol's blockchain. This means that it is also possible to move non-fungible tokens (NFTs) from Ethereum to NEAR Protocol.

The Rainbow Bridge does not work as a one-way street, but in both directions. This also allows you to move assets from NEAR to Ethereum. As a result, you take advantage of the benefits of both blockchain.

A bridge ensures that you can use both blockchains. This bridge is not only advantageous for users, but also for developers. Developers can use features from both blockchains allowing new applications and innovative products to be built.