Consensus is an every-stage-use word in the blockchain since almost all activities on it are supposed to revolve around this circuit. But how is this consensus formed in any network? Indeed, every network and even every platform – depending on its application – uses a unique method.
So, you don’t need to worry about complex definitions. Here, we are just going to explain as simply as possible what this consensus is and what methods are used to achieve it in the blockchain.
What is Consensus?
As it is said, Blockchain networks use a consensus mechanism among the various existing blockchains, based on the required resources and desired outcome.
Blockchain consensus mechanisms help guarantee that all nodes on a network are synchronized and their transactions are legitimate. Such consensus mechanisms are necessary for blockchain networks to ensure that every node is connected to the same network and all transactions are regularly verified.
Types of Consensuses
There are several consensus protocols, some more and some less known; Some are expensive, and some are fast. With whatever features they have, each of these consensus mechanisms should be used according to the function and purpose of a network. And since blockchain and creativity have no limits, it is not at all strange that a few more names are added to this list from time to time.
Proof of Work
PoW is both the most known and expensive method among all consensuses. Miners solve complicated puzzles to achieve blocks as rewards. Solving these complex mathematical puzzles needs massive computational power. Since the puzzle-solving process happens through trial and error, inexhaustible power is required to obtain blocks.
The level of difficulty for the puzzles changes according to the speed at which the blocks are being mined. In case the blocks are created quickly, then the puzzles would get more difficult and vice versa. Therefore, new blocks must be created within a particular time frame to carefully adjust the difficulty level of puzzles.
The popular Bitcoin utilizes PoW and its current estimated annual power consumption is 51.13 TWh.
Learn more about Proof of work
Proof of Stake
PoS find the next block producer through a randomized process. Blockchain users can lock up their tokens for a certain time for becoming a validator. By becoming a validator, users can be able to produce blocks. Validators can also be selected based on the design of the blockchain. Generally, the user who owns the biggest stake or owns coins for the longest period has better odds of creating a new block.
The more energy-sufficient method offers all or part of transaction fees to the validators.
Learn more about Proof of stake
Delegated Proof of Stake
In DPoS, users may stake their coins to vote for particular delegates while the weight of a vote depends on the user’s stake. For instance, if a user ‘X’ stakes 20 coins for a delegate and another user ‘Y’ stakes 2, then X’s vote will have more weight compared to that of Y. The delegate that receives the highest number of votes gets a chance to produce new blocks.
The fastest consensus mechanism which is considered a digital democracy rewards delegates with transaction fees or a specific number of coins.
Learn more about Delegated proof of stake
Proof of Identity
PoI is a piece of cryptographic evidence for a user’s private key that is cryptographically attached to a specific transaction. Any identified user from a blockchain network can create a block of data that can be presented to anyone in the network.
In the consensus mechanism, the integrity and authenticity of created data are guaranteed. In some digital innovations like smart cities, PoI can be used to verify the identity of citizens.
Proof of Elapsed Time
The consensus mechanism chooses the new block producer randomly and fairly while they are waiting. To achieve this, the mechanism proffers a random wait time for each user and the user whose wait time finishes the earliest will produce a new block.
This consensus mechanism only works if the system can verify that no users can run multiple nodes and the wait time is truly random.
Proof of Capacity/Space
The mechanism finds the lucky one through a process called plotting. During plotting, solutions to complex mathematical puzzles are stored in digital storage. When a storage device is filled with solutions, users can utilize it for producing blocks.
Users who are fastest in finding the solutions get a chance to create a new block. Thus, users with the highest storage capacity will have higher chances of producing a new block.
Proof of Activity
A combination of Proof of Work and Proof of Stake leads to Proof of Activity, which in miners try to find the solution to a puzzle and claim their reward.
However, the blocks created in the Proof of Activity mechanism are simple templates with mining reward addresses and header information. The header information is then used to choose a random group of validators for signing a block. The validators with larger stakes will have greater odds of being selected to sign a new block. Once the selected validators sign a new block, it becomes a part of the network. In case the block stays unsigned by some validators, it gets discarded, and a new block is utilized. The network fees generated in the process are distributed between the winning miner and the validators.
Proof of Authority
The modified version of the Proof of Stake mechanism puts the identities of validators at stake.
In this case, identity is the correspondence between validators’ identification and their official documentation to help verify their identity. These validators stake their reputation on the network. In Proof of Authority, the nodes that become validators are the only ones allowed to produce new blocks. Validators whose identity is at stake are incentivized to secure and preserve the blockchain network.
Consensus protocols, like every other aspect of blockchain, have been developed to maximize compatibility with this decentralized network. They may not be perfect, but each has outstanding features that can be used to provide a unique and more efficient protocol.