Consensus in NKN is driven by Proof of Relay (PoR), a useful Proof of Work (PoW) where the expected rewards a node gets depend on its network connectivity and data transmission power. Node proves its relay workload by adding digital signature when forwarding data, which is then accepted by the system through consensus algorithm.
PoR is not a waste of resources since the work performed in PoR benefits the whole network by providing more transmission power. The “mining” is redefined as contributing to the data transmission layer, and the only way to get more rewards is providing more transmission power. The competition between nodes in the network will eventually drive the system towards the direction of low latency, high bandwidth data transmission network.
PoR is used for both token mining and transaction verification. On the one hand, token will be rewarded to nodes for data transmission; on the other hand, the expected reward for transaction verification may also depend on PoR, either through election or difficulty adjustment.