Consensus Algorithms — ECOChain
What are Consensus Algorithms?
Consensus algorithms are the central foundation of public blockchains, part of the process for ensuring blockchains remain a transparent and reliable ledger. It establishes trust between unknown peers in a distributed computing environment.
There are various types of consensus algorithms, but in this article, we will focus on one of the major consensus algorithms for public blockchains which is Proof-of-Stake (PoS).
What is Proof of Stake?
Proof of Stake (PoS) is a consensus algorithm based not on physical mining, but rather by selecting block according to how large of stake validators hold. PoS provides individual ‘stakeholders’ with a digital signature which verifies their ownership of a stake in the protocol. As well as, the validators can bet on the blocks and the network will be randomly select an individual node to validate the information. When the block is selected, the validators will get rewards in proportion to their stake.
This ensures that it is worthwhile for individuals to participate in the network and stake their coins in order to increase chance to be selected to validate a block, it can be referred to as ‘minting’ rather than ‘mining’ in PoW consensus.
Here are some of PoW’s limitations:
· Wasted a lot of resources which is harmful for the environment
· Require sophisticated equipment to become a miner
· Formation of mining cartels thereby making the whole process more centralized
Thanks to a PoS consensus, validators don’t have to waste their computing power, which is harmful for the environment, since the only factor influencing their chance is the total number of their own coins and the current complexity of the network.
For ECOChain, we are a decentralized public blockchain which use PoS consensus to run the system in order to reduce cost and wasteful use of resources. Due to the fact that we don’t have to use powerful computers, which consume lots of money and energy, to become mining like PoW. Apart from that, PoS encourages more nodes to take part in the consensus algorithm and makes blockchain more decentralized as it has no mining cartels.
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