Blockchain 101: Consensus Mechanism
Consensus mechanisms are protocols that make sure all nodes (device on the blockchain that maintains the blockchain and (sometimes) processes transactions) are synchronised with each other and agree on which transactions are legitimate and are added to the blockchain.
In simple terms, it’s just a method to decide within a group.
Imagine a group of ten people that want to make a decision about a project that benefits them all. Every one of them can suggest an idea, but the majority will be in favor of the one that helps them the most. Others have to deal with this decision whether they liked it or not.
Now imagine the same thing with thousands of people. That will drastically make it way more difficult.
Consensus algorithms do not merely agree with the majority votes, but it also agrees to one that benefits all of them. Therefore, it’s always a win for the network.
Blockchain consensus models are methods to create equality and fairness on the internet. The consensus systems used for this agreement is called a consensus mechanism.
Types of Consensus Mechanism:
Proof Of Work
One of the most popular consensus mechanisms in the industry. The Proof Of Work process is known as mining and the nodes are known as miners. Miners solve complex mathematical puzzles which require a lot of computational power.
Eg: Bitcoin, Litecoin, Dash
Proof of Stake
Proof Of Stake (POS) is the more environmentally friendly brother of the Proof Of Work protocol. In a system that uses Proof Of Stake, a randomized process is used to determine who gets to produce the next block.
Eg: Peercoin, NXT, Blackcoin
Delegated Proof of Stake
In a Delegated Proof Of Stake system users can stake their coins to vote for a certain amount of delegates.
A delegate is a person or organisation that wants to produce blocks on the network.
The weight of their vote depends on their stake.
Eg: EOS, Tron, ONT
Proof of Capacity
Proof Of Capacity is a consensus mechanism that uses a process called plotting, where solutions are pre-stored in digital storage (like hard disks). After a storage has been plotted it can take part in the block creation process.
Eg: BurstCoin, SpaceMint
Proof of Elapsed Time
Proof Of Elapsed Time is a consensus mechanism that aims to randomly and fairly decide who gets to produce a block based on the time that they have waited. To decide who gets to produce a block, the process assigns a random wait time to each node. The node whose wait time finishes first gets to produce the next block.
Eg: Developed by Intel and used by HyperLedger
Delegated Byzantine Fault Tolerance
The system is comprised of nodes, delegates (who can approve the blocks), and a speaker (who proposes the next block). dBFT protocol is robust enough to protect against malicious actors within the network.
Eg: NEO
There are so many more consensus mechanism out there but there’s yet to be a perfect system without cons.
Do catch Block Live Asia’s video on The Great Consensus Debate to learn more!
https://www.youtube.com/watch?v=4CvrenIbZv4
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