Blockchains are decentralised, distributed, and public digital registers used to record transactions on many computers so that records cannot be changed or altered by subsequent blocks without collusion within the network. Each block that the blockchain stakeholders see creates a distributed register, a formal record of transactions that ensures that the data is visible and unchanged since it was created.
The status of the ledger does not change, and since the public blockchain operates as a decentralised, automated system, there must be an efficient, fair, real-time, functioning, reliable and secure mechanism. Ensuring that every transaction on the blockchain is genuine and that all participants agree on the consensus status of the ledger.
Like a box of chocolates, consensus mechanisms in various forms do not produce the same result for the palate as a blockchain network but can be shared. A blockchain consensus mechanism is a protocol that ensures that all nodes or devices on the blockchain maintain the blockchain, process transactions, synchronize, and agree that the transactions are legitimate and added to the register. In blockchains, a consensus is achieved through the use of various blockchain consensus mechanisms. But what are the top blockchain consensus mechanisms that one should know about?
Top Blockchain Consensus Mechanisms
Proof of Work (PoW)
Proof of Work (PoW) is the first blockchain consensus mechanism used by Bitcoin. The requirements for proof of work are defined by the expensive computer calculations that must be made to create a new group of trustless transactions in the blockchain. In Proof Of Work, the idea is that miners in a network must prove that they have made a certain effort. This is where high computing power is required.
Proof of Stake Mechanism (PoS)
The Proof of Stake Mechanism (PoS) is a protocol-class consensus for blockchains that select validators related to their share of the cryptocurrency. PoS is a consensus between nodes where the stake is the monetary asset and authority where consensus stake is the actual identity of the node present in the system.
Proof of Burn Mechanism (PoB)
Proof of Burn Mechanism (PoB) is a consensus in blockchain networks that ensures all participating nodes agree on the true and valid state of the network, thus avoiding the possibility of duplication in crypto. The helium blockchain uses coverage detection to create a physical wireless network based on the amount of reliable coverage it provides for users using connected devices in the network.
The PoB mechanism implies that nodes participate in a lottery selected for blockchain status by burning the value they hold in cryptographic money, such as bitcoin or ether.
Proof of Capacity Mechanism (PoC)
Proof of Capacity Mechanism, a consensus in the blockchain, stores solutions to complex mathematical puzzles in the digital spaces. For instance, once a solution is generated it can be used to create a new data block. The mechanism then assigns the mining rights to the devices to use the available space to decide mining rights and validate the transactions.
The upside to using Proof of Capacity is its efficiency as pitted against Proof of Work and Proof of Stake. The blockchain uses the mining device’s hard drive as a space to store a list of possible solutions even before the mining starts.
Proof of Elapsed Time (PoET)
Denoted as PoET, Proof of Elapsed Time is yet another blockchain consensus mechanism used in permitted blockchains. Each node in the system must be identified and accepted by the network. It works on a randomized selection that determines which node gets the new block—widely used as a resource to construct smart contracts and distributed ledgers. PoET algorithm is used in Hyperledger Sawtooth, and the blockchain picks miners at random where the nodes ensure a waiting period before mining a new block.
Proof of Authority (PoA)
Proof of Authority is a blockchain consensus mechanism that provides high performance with fault tolerance or can be termed as an optimized version of Proof of Stake. In PoA the new nodes are assigned new blocks only if they have credible authority. These specific nodes are termed ‘Validators’ responsible for running software that grants access to locate transactions in blocks.
PoA operates based on the value of identities, where block validators are responsible for putting in their reputation to replace coins. This process is completely automated, thus eliminating the constant need for monitoring.
Consensus mechanisms are quite essential for the functionality and maintaining the security of the distributed computer systems. Each of them has a specific application that caters to different business requirements. Blockchain networks rely entirely on such algorithms to validate and verify every transaction made on the platform. Users who maintain the consensus mechanism are rewarded with lifelong privileges to dismantle the next block in the blockchain.
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