Consensus crypto team

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The butler B 1 and B 2 , as the two butlers with the most votes, can achieve two butler numbers, respectively. A butler is required to generate a valid block within the allotted time, which is the packing cycle T b. Figure 5 shows a consensus model of one tenure cycle. A round of consensus means that a butler generates a valid block. Then the butler whose number is equal to R is assigned responsibility for generating a block in the next round of consensus.

If at least one butler works normally, the network will finally reach consensus. Because at most one block can receive majority signatures in one packing cycle T b , each valid block has finality, and the blockchain will not bifurcate. The incumbent butlers and butler candidates run for new butlers of the next tenure in this round of consensus. Each commissioner gives a vote list, and eventually, the top N b candidates will win the election. Election results and related information will be written into this special block.

After this special block generated, the current butlers officially retired, and the new butlers start working in the new tenure. There are three types of blocks in the network, the ordinary block, the special block and the genesis block. Figure 6 shows the generation process of these three blocks. A round of consensus may take M packing cycles T b. S1 The ordinary users create transactions with their signatures attached.

At the same time, they receive transactions, verify their validity, and forward the valid transactions to other commissioners and butlers. S2 The butlers monitor transactions and store valid transactions into their local pool. All butlers and the commissioners in the network periodically synchronize their NTP time. If this is the first block of the tenure, then the previous block is the last valid special block of the previous tenure.

If this consensus is to produce the genesis block the first block of the blockchain , thenR defaults to 0. If the block time is beforeT cut , the duty butler will update its signature in the Pre-Header to prove its work. Jump to S8. S7 If the time has exceededT cut , this block will become an invalid block. Jump to S4. S8 After generating a valid block, butlerB R sends the Final-Header to all commissioners and then releases the block to other nodes. Once more than half of the commissioners confirm receipt of the valid block, the block enters the legal state in the system and has final confirmation.

S9 After receiving the valid block, the butlers and commissioners delete the included transactions from their local pool, obtain the random numberR and begin the next round of consensus. The last block in a tenure cycle aims to complete an election for the butler team in the next tenure.

The process is similar to that of an ordinary block:. P1 The commissioner generates a sequence from the list of the current butlers and butler candidates to form a vote, and sends it to the duty butler. P2 The commissioners and the current butlers receive votes from all commissioners and put them into their local pool. P3 The duty butler judges whether the number of voting transactions collected exceeds half of the number of commissioners. If so, perform P4—P8 to generate a new special block; if not, continue to wait until a timeout and be replaced by another duty butler.

The difference with the ordinary block is that the special block contains voting transactions, but not ordinary data transactions. After counting, the topN b nodes will win the election and become new butlers of the next tenure. P9 After the production of the special block, the butlers of the current tenure are relieved of their office and delete the relevant voting transactions in the local pool.

The genesis block is the most special block in the consortium blockchain, with a height of 0. The process of its generation is as follows:. T1 The primary commissioner nodes of the consortium communicate with each other to confirm online. Each node has an address hash. The member with the smallest hash value as a proxy commissioner is responsible for generating the genesis block. T2 The primary commissioner sends the transaction of updating to the commissioner to the proxy commissioner.

T3 The commissioners who also want to be butler candidates submit identity change transactions. After receiving these transactions, the commissioners put them into their local pool. T4 The commissioner selects at leastK candidate addresses for butlers from their local pool, serializes these addresses into a vote, signs it, and sends to the proxy commissioner. T5 After counting the voting information, the proxy commissioner integrates all the transactions to generate a pre-block and sends it to all commissioners.

When the proxy commissioner receives the signatures of the pre-block from all commissioners this step confirms that all commissioners can communicate with each other, which means the consortium blockchain network has been established , the genesis block can be released. This process is similar to S4—S8 of generating an ordinary block. T6 After all the commissioners receive the genesis block, they delete the unconfirmed transactions in the local pool.

In S4—S8 of ordinary block generation, we use the modified two-phase commit to ensure the unique legality of the block. It is a necessary stage for block generation. Since the system is in time synchronization with NTP, in a certain period, only one duty butler can legally perform block generation and a two-phase commit process.

Therefore, the communication complexity of PoV is O 3 N c , which is only affected by the number of commissioner nodes N c. Each block generates a random number that determines who will be the next duty butler in a random manner. The random number generation algorithm is as follows:. Denote the function of taking the last 32 bits of the string as SubStringEnd 32 string , so R is:. Since the value of each block header is unpredictable, we can obtain a variable R source and a random number R , preventing the possibility that butlers may unite to get more income by making R -values appear in a specific pattern.

The first one is voting for block production, and the second one is voting for the butler team. The commissioners vote by returning their signatures. The butler B i generates a block and sends it to all commissioners. If a commissioner agrees to produce this block, it encrypts the block header and the timestamp and returns the signature and the timestamp to the butler B i.

During the last round of consensus in the tenure, the commissioners send the signed voting transactions to the duty butler B i. After collecting and counting the votes, it generates a special block containing election results and related records. Then the butler B i will send this block to all commissioners for validation. The butler candidates can give up his identity at any time. When it exists, a butler candidate retrieves its deposit. However, a butler cannot regain its deposit if it applies to exit from the network during its tenure.

Specifically, each commissioner maintains a list of butler candidates and evaluates their behaviors. The scoring rules include:. A butler may have different scores recorded by different commissioners. The score represents the degree of trust from a commissioner and also becomes one of the grounds for voting. After a whole tenure ends, butlers and butler candidates will receive rewards from the consortium based on the number of valid blocks they have generated so that they can be motivated to take the job, work honestly, and stay online for a long time.

We propose a complete consensus algorithm in this paper based on a voting mechanism for the consortium blockchain. Most of the current consensus algorithms choose to sacrifice some performance for security. Based on the credible characteristics of the consortium nodes and the appropriate consensus decision, PoV can significantly reduce the delay of blockchain transaction validation while ensuring the correctness of the algorithm, thus improving the performance of the consortium blockchain.

With the assumptions stated in Section 2, PoV meets the following three conditions Pritchett, :. For each operation request of the users, the system can always return a result within a limited time. Theorem 4. Proof: We use reduction to absurdity and assume that illegal blocks can be adequately validated. Therefore, this assumption is failed, and the original proposition is correct. Lemma 4. Proof: We use mathematical induction. The proxy commissioner generates it and ensures that each member node is signed to recognize it so that each commissioner will hold the same genesis block.

Each commissioner in the system has already saved the same genesis block, which means the final consistency of the transactions in Block 0. To get rewards after winning the election, butlers must maintain the maximum online time, work honestly and fulfill the responsibility of producing block within the allotted time. As a result, its probability of getting a vote will be lower in the election. Defeat in the election makes the butler lose the opportunity of producing blocks as well as getting rewards.

Evidence shows that it is difficult for the butler who attempts to create illegal blocks to succeed in the election or gain any profit. Reliable butlers are more likely to win the election, and the system will become more reliable. First of all, we analyze the number of votes K by each commissioner. According to the rules of voting, in each round of the election, N b butlers will be selected from N bc butler candidates by N c commissioners. By establishing a mathematical model, we study the minimum number of votes K , which is the simplest, time-saving, fair and reasonable voting rule.

The voting activity subjects to the binomial distribution principle. The probability that a butler candidate j gets X votes is:. To make the results of the voting more impartial, we hope that the average number of votes that an elected butler can receive exceeds N c 2. So, we can figure out the probability of the above event:. According to Equations 2 and 3 , the minimum K -value satisfying Equation 4 is the optimal number of votes. The abscissa is K , and the ordinate is the probability.

We get optimal K from the curve intersection of P 1 j and P 2 j. In this way, the results can be recognized by the majority of commissioners, so that the results of the vote are more scientific and impartial. Figure 8. A Original map and B magnified map. Introduce a scoring mechanism. We rewrite the Equation 1 as:.

The results are shown in Figure 9. Figure 9. As shown in Figure 9 , when K is a fixed value, the more reliable the butler works, the higher the score the butler can get during the tenure. Therefore, the butler has a higher probability of getting the votes as a candidate and is more likely to win the election. After becoming a butler, the butler has the probability of 1 N b to pack a block at each packing cycle.

We indicate p j as the probability of packing a valid block. Assuming that a reward for a block is B j , we define the average energy cost of a single packing cycle as e j. E jk subjects to an identical independent distribution iid. The total rewards that butler j can receive after n packing cycles are:.

In conclusion, considering the scoring mechanism and voting mechanism, butlers trying to ruin the system will fail to release blocks and thus receive a negative grade. Therefore, the probability that bad butlers or candidates win the election is below the average. If the system has a more substantial number of candidates than the expected number, unreliable candidates will quit the network because their meager rewards are unable to compensate for their energy cost.

Equations 4 and 6 can be criteria for quality and quantity control of candidates. Proof: According to the block generation process, the accountability of the butler who cannot work honestly will be handed over to the next butler. In the case of a network partition, if a partition contains more than half of the online commissioners and at least one honest butler, the bookkeeping rights will eventually be transferred to the honest butler, and half of the commissioners sign the block.

Therefore the partition will continue to operate the consensus process and produce blocks. The number of commissioners in other partitions is less than half, and the consensus process will be continually looping through the process of replacing the butler and failing to generate new blocks. Suppose partition A satisfies these two conditions. In the Partition B , even if the block can be successfully packaged by the butler, it is impossible to obtain enough verification signatures.

Therefore, it is impossible to have a new chain in the Partition B. Thus, PoV allows partitioning without forking. Selfish mining has different forms in different consensus algorithms Sapirshtein et al. In summary, it is a behavior that undermines consensus fairness to gain higher profits without compromising the correctness of the system.

In the process of PoV consensus, there is the possibility of selfish mining attacks due to the incentive mechanism. In this part, we will discuss a possible selfish mining attack in PoV— R -Collision. Although the previous legal block specifies the next duty butler by the R -value, there is a way to increase the possibility that current duty butler will continue to serve as the next duty butler.

At a very low probability, an attacker may occupy the role of a duty butler for a long time. According to the central limit theorem of the binomial distribution — the De Moivre-Laplace theorem, the limit distribution of mutually independent random variables is the standard normal distribution, namely:.

If the probability of completing a selfish mining attack R -collision is less than 0. The following model is established in Matlab:. Figure The probability of R -collision failure. A Three-dimensional map and B contour map. We project the contour map of the 3D chart onto the xoy plane in Figure The probabilities of R -collision fail vary with N b and N c.

The 3D model is shown in Figure Therefore, selfish mining can be a small probability event, by which time the system is safe to some extent. Our experimental environment is based on the simple theoretical model: there are L servers each connected directly to a router in the network. The N commissioner nodes are evenly distributed among the L servers, and each commissioner node can also serve as the butler.

Suppose the server has sufficient memory and CPU resources, and the total transmission bandwidth between the servers is a fixed value band. Since the server has great internal bandwidth and extremely high CPU processing speed, we only consider the process of node communication between different servers. Define the message header size as M , the signature size as S , the pre-block header size of PoV as H , the transaction size as T , and the maximum number of transactions in a block as K.

Generating a PoV block contains three steps of communication. The maximum traffic and time required are:. Then all the commissioners return their signature messages to the duty butler. Finally, the duty butler sends the Final-Header to all the commissioners, which mainly contains the Pre-Header and the received signatures of the commissioners. Each PoV tenure can generate six PoV blocks, including five ordinary blocks and a special block.

Table 2 shows their performance variation in the system with different scales. Table 2. The experimental results show that the actual performance trend of PoV accord with the theoretical values. Since the butler nodes are mainly responsible for the message transmission in the PoV algorithm, in system design, the butler nodes are usually required to have certain bandwidth conditions, combined with some excitation mechanism, so that they have a higher probability of getting block rewards.

The security guarantee of PoW-based consensus algorithms greatly hinders the improvement of performance. Compared with the PoW-based consensus algorithms, PoV only needs one block to confirm the tamper-proof transaction, which ensures that the improvement of its performance is not limited by security. Therefore, the use of PoV consensus in the consortium blockchain can avoid unnecessary energy waste. In addition, PoV consensus supports regular rotation of consensus nodes, which can greatly avoid distributed single point of failure and prevent the system from being controlled by attackers for a long time.

At the same time, PoV is subject to the control of all committee nodes. In the establishment of a real blockchain system, the government and regulatory agencies can participate in the supervision properly by cooperating with the appropriate audit layer.

If there is an illegal transaction that needs to be changed, a special modification transaction can be issued with the consent of more than half of the committee members through government consultation to correct the existing wrong data. Therefore, PoV can not only adapt to the top-down regulation but also adapt to the bottom-up modification of the blockchain system, with flexible supervision.

However, the main limitation of PoV is the need to dynamically change the waiting time of the butlers based on network conditions. If the waiting time is too short, the butlers will not be able to collect enough transactions into the block, resulting in low throughput. On the contrary, if the waiting time is too long, it will lead to the failure to complete the consensus within the specified time, triggering the timeout mechanism, which will lead to the drop in the throughput.

In our implementation, we adjust the waiting time to a suitable size as 5 s for an excellent performance. In summary, this paper proposes a new type of consortium-oriented consensus algorithm—PoV and proves its performance by experimenting in a distributed environment.

We define four roles in the PoV model. The algorithm introduces the butler role and the butler candidate role to achieve the rotation of the consensus nodes and establishes a voting mechanism to ensure that the consensus results need to be verified by the majority of the commissioners. This kind of consensus process separates voting rights and bookkeeping rights, which achieves decentralized management among consortium members. PoV utilizes the trusted environment of the commissioner nodes to ensure its security and guarantees privacy based on the cryptography foundation of the blockchain technology.

It requires only one block to confirm the finality with almost negligible power consumption. Compared with traffic complexity O N 2 of BFT-based algorithms, PoV has just the complexity of O 3 N c and achieves a great improvement when the number of nodes is over Our future work lies in optimizing PoV consensus in subsequent practical system development. In our current design, it is a consensus algorithm of principle and may have problems at the system level, such as modular design and parallel processing.

Our other future work is the balance between privacy protection and regulation in our blockchain system with PoV consensus. We initially plan to combine the GDPR-Blockchain Compliant architecture design of IEEE Lima, to store the sensitive data in the off-chain trusted database, and only the pointer and digest of the data will be stored on the chain.

KL and HL contributed conception and design of the study. HW wrote the first draft of the manuscript and participated in the experiment. All authors contributed to manuscript revision, read and approved the submitted version. The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

This manuscript is further research and expansion on the previous work Li et al. In comparison with the previous work, we remove the signature process of the NTP server in the previous work, which can become a bottleneck of the system. The timestamp of the commissioner is added in the process of its signature, which is equivalent to making the trusted commissioner node concurrently serve as the distributed NTP server.

We also upgrade the random number algorithm in the consensus process and analyze its ability to resist selfish mining attacks. We also add comparative experiments in an actual distributed environment. We thank Jiansen Huang and Yongjie Bai for their significant contributions to experimental testing and analysis.

Abraham, I. Aspnes, J. Leitao, A. Bessani, and P. Al-Bassam, M. Google Scholar. Bentov, I. Snow white: provably secure proofs of stake. IACR Cryptol. Bessani, A. Bhattacharya, R. Buterin, V. On Public and Private Blockchains. Ethereum Blog, Crypto Renaissance Salon. Castro, M. Practical Byzantine fault tolerance.

OSDI 99, — Decker, C. Dinh, T. Untangling blockchain: a data processing view of blockchain systems. IEEE Transact. Data Eng. Sometimes a hard fork is not agreed upon by all participants, which can create concern, debate, and criticism. The Ethereum fork was widely debated by the community as was whether to support Ethereum Classic or Ethereum following the fork.

Critics argued that this was a contravention of the widely-held "Code is Law" principle, in which the governing parameters for software are laid down in the original code. Others have argued that the fork demonstrates that malicious attacks on the system can be dealt with effectively restoring the funds of those involved. In , Bitcoin also went through a hard fork, which resulted in two separate blockchains; the original Bitcoin and Bitcoin Cash.

At the time, the Bitcoin community was trying to determine how to improve the network's scalability or the ability to process more transactions at the same time. As new transactions are added to a network, only so many can be processed simultaneously. For example, Bitcoin could only process one megabyte of transactions at a time, which led to delays in transactions being completed. During the fork, a proposal to increase the average block size in bitcoin's blockchain was rejected by the cryptocurrency's core development team.

They rejected the change, despite the fact that high transaction fees made bitcoin's use as a medium for daily transactions unsustainable. The only constituency that benefited from high transaction fees were miners. In the end, a renegade group of developers and miners moved away to create their own cryptocurrency with variable block sizes.

The hard fork between Bitcoin and Bitcoin cash was done, in part, to increase the processing limit from one to eight megabytes. On-chain governance emerged as an alternative to informal systems of governance. It claims to solve the problems of the centralization of bitcoin by incorporating all nodes within a blockchain network into the decision-making process. Blockchain technology offers an inclusive approach to technology in which all participants can share the benefits.

As the blockchain community and their networks look to improve their scalability allowing them to process more transactions and compete with traditional electronic payment systems, such as Visa, updates to the technology are likely to continue. These changes will continue to be implemented in an effort to improve blockchain technology and the shared benefits of the community.

On-chain governance will likely center around enhancing transparency and trust in the process of a distributed ledger as these changes and improvements are implemented. However, the blockchain community will need to ensure that on-chain governance is not largely controlled by a small group of developers and miners who can Implement changes as they see fit. With developmental changes to the blockchain networks, there is the risk of future disagreements and hard forks, which could divide the blockchain community.

According to its proponents, the advantages of on-chain governance are as follows:. Changes to a blockchain are not routed through a core development community, which evaluates its merits and demerits. Instead, each node is allowed to vote on the proposed change and can read about or discuss its benefits and drawbacks.

It is decentralized because it relies on the community for collective decision-making. Informal governance systems require time and effort between stakeholders in order to achieve consensus. On-chain governance achieves consensus regarding proposed changes in relatively less time among stakeholders. For example, the bitcoin cash fork and Ethereum classic fork took months to build up and implement.

What's more, off-chain maneuvering can result in messy situations where certain nodes can agree to disagree and not run the proposed changes. Algorithmic voting mechanisms are relatively faster because test results for their implementation can be seen via a code update. Running the code change on a test net, as in the case of Tezos, also enables stakeholders to see the effects of that change in practice.

Because each proposed change requires consensus from all nodes, this means that the possibility of a hard fork is reduced significantly. Through the use of rewards, on-chain governance proposes economic incentives for nodes to participate in the voting process. The informal governance process does not provide economic incentives to end-users, who utilize cryptocurrencies for daily transactions or invest in them for long periods.

Instead, economic incentives rest with miners and developers. Once voting is concluded, all node operators are required to follow the decision. Based on initial experiments conducted with on-chain protocols, the disadvantages of this type of governance are as follows:. As with real-world elections, low voter turnout may become a problem for on-chain governance.

The DAO Carbonvote, which at one time had recorded participation rates of 4. Low-voter turnout is also undemocratic because it could result in a single node with significant holdings manipulating the overall future direction of the protocol.

Nodes with more coins get more votes. Again, this means that users with more stakes can take control of the voting process and steer future development in their desired direction. More importantly, it skews the dynamic away from miners and developers towards users and investors, who may be simply interested in maximizing future profits as opposed to developing the protocol towards innovative use cases. The question of blockchain governance is not unique or unprecedented.

Legal philosophy and theory have grappled with this issue for hundreds of years, and the issues there have direct relevance to the question of on-chain versus off-chain governance. Central to the debate between governance that includes human decision making off-chain and rule-based decision making that can be conducted entirely through automated processes on-chain , is the question of "whether existing rules and decision-making processes governing a blockchain-based system should be changed from the inside or the outside by the reference community, and whether the system should provide for a mechanism to change the governance structure itself.

This practical question leads to the more theoretical and normative question of whether an existing set of code-based rules could and should overtake the exercise of human judgment in decision-making, and what are the ethical and political considerations this would entail.

On-chain governance is based on a version of positivist legal order that enables peaceful and legitimate resolutions of disputes in a pluralist society, without recourse to external sources moral or political to justify its legitimacy. In the case of crypto governance, this means the competing interests of stakeholders don't have to come down to an arbitrating authority like "what would Satoshi do?

The critique asks if this is possible, or if, as conservative legal theorist and one-time German Nazi party member Carl Schmidt argued, such positivist orders are vulnerable to capture by private interests. According to Schmitt, positivist regimes break down during situations where exceptions arise outside the norms of governance that are written into the rules — in this case, the code that runs the blockchain.

In such a situation, the rule system itself starts to embody unsustainable contradictions. For example, if one set of users of the blockchain insist that blocks must be modified to increase the liquidity and supply of its tokens, which could produce inflation, and another set insists that the financial pain of less-liquid currency is necessary to defend against the evils of inflation.

In these situations, Schmitt argues one person or one group will step in to make a decision that breaks the unresolvable tie—someone above the rules. This is, of course, anathema to the radically decentralized ethos of blockchain philosophy. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

Vitalik Buterin. Volume 37, Issue 17, Your Money. Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Table of Contents.

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Fpga miner bitcoin	Since the system is in time synchronization with NTP, in a certain period, only one duty butler can legally perform block generation and a two-phase commit process. T4 The commissioner selects at leastK candidate addresses for butlers from their local pool, serializes these addresses crypto team consensus a vote, signs it, and sends to the proxy commissioner. Comparative details are shown in Table consensus crypto team. Therefore, selfish mining can be a small probability event, by which time us coin crypto currency market system is safe to some extent. Intel PoET Intel Corporation, uses the trusted enclave in Intel SGX, where participants request wait times and choose the chip with the shortest wait time as the leader. Single consensus protocols have disadvantages such as low performance, weak consistency, and poor fault tolerance. It enables any mutually agreed parties to generate transactions directly without the involvement of third-party intermediaries.
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Consensus crypto team	Introduction Information on the Internet is transparent and untrustworthy that hackers can tamper with its authenticity. Apologise, crypto sentiment analysis remarkable summary, this paper proposes a new type of consortium-oriented consensus algorithm—PoV and proves its performance by experimenting in a distributed environment. The offers that appear crypto team this table are from partnerships from which Investopedia receives compensation. This assumption is entirely valid for the setting that the core member node can also serve as the bookkeeping node. Team committing the coins to an unreachable address, validators earn a privilege to mine on the system based on a random selection process. For example, if one set of users of the blockchain insist that blocks must be modified to increase the liquidity https://crptocurrencyupdates.com/eecu-crypto-currency/12865-behoudende-abt-crypto-currency.php supply of its tokens, which could produce inflation, and crypto consensus set insists that the financial pain of less-liquid currency is necessary to defend against the evils of inflation. GiaglisUniversity of Nicosia, Cyprus.
Consensus crypto team	Lima, C. Apr 13, at p. Piranha Pass. It enables any mutually agreed parties to generate transactions directly without the involvement of consensus crypto team intermediaries. Smart Contracts Run Solidity smart contracts. Snow white: provably secure proofs of stake. Here process is similar to that of an ordinary block:.
Consensus crypto team	Blockchain technology offers an inclusive approach to technology in which all participants can share the benefits. Once voting is concluded, all node operators are required to follow the decision. Proof of Elapsed Time PoET Proof of elapsed time PoET consensus algorithm follows a true lottery system and allows for more efficient use of consensus crypto team blockchain network's resources. How is the Lisk blockchain governed? For example, the bitcoin cash fork and Ethereum classic fork took months to build up and implement.

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Sign up for Coinbase. Getting Started with Cryptocurrency: How to start Trading for Altcoins This video shows the process of using Binance in a step-by-step fashion. Sign up for Binance. Getting Started with Cryptocurrency: How to Securely Store your coins Compare and find the right wallet that will fit your crypto needs. Buy Ledger Nano S. In such a dynamically changing status of the blockchain, these publicly shared ledgers need an efficient, fair, real-time, functional, reliable, and secure mechanism to ensure that all the transactions occurring on the network are genuine and all participants agree on a consensus on the status of the ledger.

This all-important task is performed by the consensus mechanism, which is a set of rules that decides on the legitimacy of contributions made by the various participants i. There are different kinds of consensus mechanism algorithms, each of which works on different principles. The proof of work PoW is a common consensus algorithm used by the most popular cryptocurrency networks like bitcoin and litecoin.

It requires a participant node to prove that the work done and submitted by them qualifies them to receive the right to add new transactions to the blockchain. However, this whole mining mechanism of bitcoin needs high energy consumption and a longer processing time. The proof of stake PoS is another common consensus algorithm that evolved as a low-cost, low-energy consuming alternative to the PoW algorithm.

It involves the allocation of responsibility in maintaining the public ledger to a participant node in proportion to the number of virtual currency tokens held by it. However, this comes with the drawback that it incentivizes cryptocoin hoarding instead of spending. While PoW and PoS are by far the most prevalent in the blockchain space, there are other consensus algorithms like Proof of Capacity PoC which allow sharing of memory space of the contributing nodes on the blockchain network.

The more memory or hard disk space a node has, the more rights it is granted for maintaining the public ledger. Proof of Burn PoB is another that requires transactors to send small amounts of cryptocurrency to inaccessible wallet addresses, in effect "burning" them out of existence. Another, called Proof of History PoH , developed by the Solana Project and similar to Proof of Elapsed Time PoET , encodes the passage of time itself cryptographically to achieve consensus without expending many resources.

Blockchain Technology. Your Money. Personal Finance. Your Practice. Popular Courses. Cryptocurrency Blockchain. What Is a Consensus Mechanism? Key Takeaways A consensus mechanism refers to any number of methodologies used to achieve agreement, trust, and security across a decentralized computer network. In the context of blockchains and cryptocurrencies, proof-of-work PoW and proof-of-stake PoS are two of the most prevalent consensus mechanisms.