Architecture

This document describes the technical architecture of the TALER blockchain, covering consensus mechanics, economic model, network protocol, and storage internals. All details are derived from the Taler source code.

Overview

TALER is a Bitcoin Core-based blockchain that implements a hybrid Proof-of-Work / Proof-of-Stake consensus model. Both PoW and PoS blocks coexist on the same chain, each governed by independent difficulty targets and block spacing rules.

• Genesis date: September 13, 2017
• Codebase lineage: Bitcoin Core (UTXO model, script system, peer protocol)
• Block types: PoW blocks and PoS blocks interleaved on one chain

Consensus Mechanism

The chain accepts both PoW-mined and PoS-minted blocks. Each block type has its own difficulty track, spacing target, and reward schedule. A block is valid if it satisfies either the PoW or PoS validation rules — the chain does not require alternation or any fixed ratio between the two types.

The chain tracks two height counters:

• nHeight — total block count (PoW + PoS)
• nPowHeight — PoW blocks only (used for subsidy halvings and PoW difficulty)

Proof-of-Work

Mining Algorithm

• Blocks 0–9,999: Scrypt (original launch algorithm)
• Blocks 10,000+: Lyra2Z — a memory-hard, ASIC-resistant hashing algorithm

Difficulty Adjustment: Dark Gravity Wave

PoW difficulty is adjusted using the Dark Gravity Wave (DGW) algorithm, which recalculates difficulty based on a rolling window of recent PoW blocks:

Key properties:

• Adjustment is clamped to 3x bounds — difficulty cannot more than triple or drop below one-third per recalculation
• Post-TLRHeight (block 130,000), PoW difficulty retargets every 10 PoW blocks
• Only PoW blocks are considered in the DGW calculation (PoS blocks are excluded)

Proof-of-Stake

PoS was activated at block 130,000 (the TLRHeight fork). Staking allows coin holders to mint new blocks without mining hardware.

Staking Weight

The probability of minting a PoS block is proportional to a coin’s staking weight:

weight = min(age_in_days, 99) × min(value_in_TLR, 9999)

• Minimum stake age: 2 days (coins must be unspent for at least 2 days)
• Maximum weight age: 90 days (age contribution caps at 90 days, with a hard cap at 99 days in the formula)
• Maximum value contribution: 9,999 TLR per UTXO

Stake Modifier

The stake modifier provides randomness to PoS block selection, preventing predictable staking:

• Computed from a 64-block pseudo-random selection of prior block hashes
• Recalculated every 6 hours (modifier interval)
• Mixes entropy from both PoW and PoS blocks

PoS Kernel Validation

A PoS block is valid when the kernel hash (derived from the stake modifier, coin properties, and timestamp) falls below the PoS difficulty target — conceptually similar to PoW mining, but computed from coin ownership rather than computational work.

PoS Block Requirements

A valid PoS block must contain:

1. A coinstake transaction at transaction index 1 (index 0 is always an empty coinbase)
2. A block signature authenticating the block producer’s ownership of the staked coins

Block Structure

Header Format

Every block uses a standard 84-byte header:

PoS Block Flags

PoS blocks carry additional metadata flags:

• BLOCK_PROOF_OF_STAKE — identifies the block as PoS
• BLOCK_STAKE_ENTROPY — indicates entropy contribution to stake modifier
• BLOCK_STAKE_MODIFIER — indicates a new stake modifier was generated

Block Signature

PoS blocks include a cryptographic signature appended after the transaction data, proving that the block producer controls the private key of the staked coins. A new format flag is used for post-fork serialization to distinguish the extended block format.

Economic Model

Supply Parameters

Block Rewards

The PoS subsidy is always calculated as: PoS_reward = PoW_reward × 30 / 70

Current State (March 2026)

• Halvings completed: 4
• Current PoW subsidy: 0.4375 TLR
• Current PoS subsidy: 0.1875 TLR
• Circulating supply: ~19,491,107 TLR

Transaction Model

TALER uses the UTXO (Unspent Transaction Output) model inherited from Bitcoin:

• SegWit support: Activated at height 32,256 (BIP141/143/144)
• Max block weight: 4,000,000 weight units
• Coinbase maturity: 20 blocks (newly mined coins cannot be spent for 20 blocks)
• Transaction format: Standard Bitcoin transaction structure with witness data

Address Types

Network Protocol

Service Flags

Nodes advertise capabilities via service flags:

• NODE_NETWORK — full block history available
• NODE_WITNESS — SegWit support
• NODE_BLOOM — bloom filter support (BIP37)

Compact Block Relay

TALER supports BIP152 compact block relay for efficient block propagation, reducing bandwidth by transmitting short transaction IDs instead of full transaction data.

Fork History

Storage Layer

TALER uses LevelDB for persistent storage:

Block Data Files

• blk?????.dat — raw block data, up to 128 MB per file
• rev?????.dat — undo/revert data for block disconnection during reorgs

BIP Support

TALER implements the following Bitcoin Improvement Proposals:

Coin Specifications Quick Reference