Blockchain Consensus Algorithms & Mechanisms

Blockchain Consensus Algorithms & Mechanisms www.developcoins.com

Blockchain Consensus Algorithms & Mechanisms : Startup Guide For Beginners In the world of blockchain consensus algorithms, everyone well-known about the importance of blockchain as well as consensus mechanism because consensus is the heart of the blockchain network and its main purpose is to achieve agreement on agreed transactions among a distributed system (on the blockchain).

This article will explore what is blockchain consensus algorithms? & Why it is so necessary? And What is the types of consensus algorithms are role play in blockchain network?

What is Consensus Algorithms?

A decentralized network like a blockchain needs rules and processes so that multiple nodes can reach an agreement on the true state of the network. These sets of rules and processes are called consensus algorithms.

Even though many different consensus algorithms have been discovering for various blockchain networks, proof-of-work and proof-of-stake variations remain the most widely used mechanisms for reaching consensus.

Why is a consensus mechanism necessary?

To understand different types of consensus algorithms, we must first understand why cryptocurrencies use a consensus mechanism. Since there is no central entity in the blockchain network that verifies transactions, this work must be done comparatively by the nodes.

The blockchain rules out some nodes from creating money from nothing, but there may be misleading nodes trying to spend a currency twice, the so-called double spending.

Different Type of Blockchain Consensus Algorithms & Mechanisms : ● ● ● ● ● ● ● ●

Proof-of-Work Proof-of-Stake Delegated Proof-of-Stake Leased Proof-Of-Stake Proof of Elapsed Time Practical Byzantine Fault Tolerance Simplified Byzantine Fault Tolerance Delegated Byzantine Fault Tolerance

● ● ● ● ● ●

Directed Acyclic Graphs Proof-of-Activity Proof-of-Importance Proof-of-Capacity Proof-of-Burn Proof-of-Weight

Proof of Work (PoW) In cryptocurrency, proof-of-work (abbreviated to PoW) is a system that uses hard-tocalculate but easy-to-verify functions to limit taking advantages of cryptocurrency mining.

Initially dated back to 1993, the Proof-of-Work concept was developed to prevent cyber attacks, like DDoS (Distributed Denial of Service). A DDoS attack is a situation where a device like a computer gets breached and becomes filled with traffic, making your system overwhelmed and thus becomes exhausted and disabled.

Proof of Stake (PoS) Proof of Stake (PoS) is a type of consensus mechanism in which users of a blockchainbased network have to stake some part of their coins or tokens, in order to have a chance at verifying transactions in a block.

Once a user is chosen to validate a block, and is capable to verify all transactions in that block, then they are rewarded a certain amount of cryptocurrency for their work.

PoS is comparable to the proof-of-work (PoW) algorithm in that they both need their network participants (or validating nodes) to reach a distributed consensus.

Also, one of the main objectives of consensus algorithms like PoS is to secure a blockchain network. In PoW, a user who verifies transactions is called a miner, but as specified, in PoS they’re referred to as a forger.

Delegated Proof-of-Stake (DPoS) The Delegated Proof of Stake (DPoS) consensus algorithm was created by Daniel Larimer, in 2014. Bitshares, Steem, Ark, and Lisk are some of the cryptocurrency projects that make use of DPoS consensus algorithm�

A DPoS-based blockchain counts with a voting system where stakeholders expand their work to a third-party. In simple words, they are capable to vote for a few delegates that will secure the network on their behalf. The delegates may also be assign to as witnesses and they are responsible for attaining consensus during the generation and validation of new blocks. The voting power is equal to the number of coins each user holds. The voting system differs from project to project, but in general, each delegate presents an individual proposal when asking for votes.

Frequently, the rewards collected by the delegates are proportionally shared with their respective voters.

Leased Proof of Stake (LPoS) Leased Proof of Stake is an advanced version of the Proof of Stake (PoS) algorithm.

Generally, in the Proof of Stake algorithm, every node holds a certain amount of cryptocurrency and is suitable to add the next block into the blockchain. However, with Leased Proof of Stake, users are able to lease their balance to full nodes. The higher the amount that is leased, the better the chances are that the full node will be selected to produce the next block. If the node is selected, the user will receive some part of transaction fees that are collected by the node.

Waves network works on a leased proof-of-stake (LPoS) consensus algorithm combined with the Waves-NG protocol, allowing for a high degree of scalability and transaction throughput.

Proof of Elapsed Time (PoET) PoET is a consensus mechanism algorithm that is often used on the permissioned blockchain networks to determine the mining rights or the block winners on the network. Permissioned blockchain networks are those which need any prospective user to identify themselves before they are allowed to join. Based on the basis of a fair lottery system where every single node is equally likely to be a winner, the PoET mechanism is based on spreading the chances of winning fairly across the largest possible number of network users.

Practical Byzantine Fault Tolerance (PBFT) Practical Byzantine Fault Tolerance (pBFT) is an algorithm that optimizes aspects of Byzantine Fault Tolerance (in other words, protection against Byzantine faults) and has been executed in several modern distributed computer systems, including some blockchain platforms. These blockchains typically use a combination of pBFT and other consensus mechanisms.

Simplified Byzantine Fault Tolerance Simplified Byzantine Fault Tolerance (SBFT), a block generator will collect all the transaction at a time and confirm them after batching them together in a new type of block.

SBFT implements a new Byzantine fault-tolerant algorithm that addresses the challenges of scalability and decentralization. Unlike many previous BFT systems that worked well only when centralized around less than 20 replicas, SBFT is optimized for decentralization and can easily manage more than 100 active replicas. SBFT provides a smart contract execution environment based on Ethereum's EVM byte-code.

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Blockchain Consensus A lgorithms

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