Blockchain: Consensus Mechanisms
The dictionary meaning of Consensus is to "Come to general agreement" . Agreement of truth , that what we concluded is the Truth for each one of us .
In case of humans we do that by arguing , discussing and sometimes breaking nose or tooth .
However,Machines on the other hands can neither argue nor break each others Mouse or Keyboards so they have to use an electronic consensus mechanism to agree to one truth of the system .
There a many consensus mechanism:
Proof of Work: BTC,ETH
Proof of Stake: DASH,CARDANO
Delegated Proof of Stake: BitShares
Proof of Burn: XRP
Proof of Elapsed Time:POET
Practical Byzantine fault:?? Help to identify Tolerant Mechanism: ?? Help to identify
Proof of Importance:?? Help to identify
Proof of Identity:?? Help to identify
However most important up to now are POW and POS.
POW (Proof of Work)
POW is the first and most well-known consensus mechanism and invented by Bitcoin’s founder, Satoshi Nakamoto. In POW, a miner who finds the hash first will be allowed to add a new block of the transaction to the blockchain. The process of mining is extremely computation-intensive, so having a high hashrate is the key for miners to calculate the hash, thus getting the rewards. Besides Bitcoin, Ethereum is also using POW as a part their algorithm. However, what makes Ethereum different is their proof of stake (POS)-based finality system capable of overlaying an existing POW blockchain, resulting in a hybrid POW/POS system called Casper Friendly Finality Gadget (FFG).
POS (Proof of Stake)
POW requires extensive energy consumption. Over the past a few years, the rising value of bitcoin boosted the demand for GPU. Some chip companies create custom chips solely for mining. Unlike POW, POS is based on the participants’ coin stake. The more coins the staker has, the more likely the staker will add a new block of the transaction to the blockchain. There’s no block reward in POS. The staker’s rewards are only the transaction fee. Because of lower energy-intensive compared to POW, POS system is suited for platforms with static coin supply. Most crowdsale-funded platforms leverage this approach to distributing tokens based on investment.
Delegated Proof of Stake (DPOS) is one of the the fastest, efficient, decentralized, and flexible consensus model available. DPOS leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way. All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates. Deterministic selection of block producers allows transactions to be confirmed in an average of just 1 second. Perhaps most importantly, the consensus protocol is designed to protect all participants against unwanted regulatory interference.
Proof of Stake: DASH,CARDANO
Delegated Proof of Stake: BitShares
Proof of Burn: XRP
Proof of Elapsed Time:POET
Practical Byzantine fault:?? Help to identify Tolerant Mechanism: ?? Help to identify
Proof of Importance:?? Help to identify
Proof of Identity:?? Help to identify
However most important up to now are POW and POS.
POW (Proof of Work)
POW is the first and most well-known consensus mechanism and invented by Bitcoin’s founder, Satoshi Nakamoto. In POW, a miner who finds the hash first will be allowed to add a new block of the transaction to the blockchain. The process of mining is extremely computation-intensive, so having a high hashrate is the key for miners to calculate the hash, thus getting the rewards. Besides Bitcoin, Ethereum is also using POW as a part their algorithm. However, what makes Ethereum different is their proof of stake (POS)-based finality system capable of overlaying an existing POW blockchain, resulting in a hybrid POW/POS system called Casper Friendly Finality Gadget (FFG).
POS (Proof of Stake)
POW requires extensive energy consumption. Over the past a few years, the rising value of bitcoin boosted the demand for GPU. Some chip companies create custom chips solely for mining. Unlike POW, POS is based on the participants’ coin stake. The more coins the staker has, the more likely the staker will add a new block of the transaction to the blockchain. There’s no block reward in POS. The staker’s rewards are only the transaction fee. Because of lower energy-intensive compared to POW, POS system is suited for platforms with static coin supply. Most crowdsale-funded platforms leverage this approach to distributing tokens based on investment.
Delegated Proof of Stake (DPOS) is one of the the fastest, efficient, decentralized, and flexible consensus model available. DPOS leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way. All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates. Deterministic selection of block producers allows transactions to be confirmed in an average of just 1 second. Perhaps most importantly, the consensus protocol is designed to protect all participants against unwanted regulatory interference.
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