A Quick Comparison between Blockchain Consensus Protocol

Posted By : Satish Joshi | 17-Sep-2018

 

What is Consensus Mechanism?

 

Think of a normal centralized organization where all the decisions are taken by the leader or a board of decision makers. While blockchain has no “leader” to make decisions, they need to come to a consensus using “consensus mechanisms”. The main purpose of blockchain is to avoid the attack from a single source because of a decentralized system with no central authority figure.

In simpler terms consensus is a dynamic way of reaching agreement in a group or a single state of the network among distributed processes or multi-agent systems. The main objective of a consensus mechanism is Collaboration, Participatory, Inclusive, Cooperative, Agreement Seeking and many more and to verify that information being added to the ledger is valid among the decentralized nodes.

 

Popular Consensus Protocols or Models With their comparison :

 

Proof of Work (POW):-

 

  • POW is the first distributed consensus mechanism. 
  • All the systems or computers in the network that are tasked with maintaining the security of the blockchain — known as Miners in bitcoin — work to solve a puzzle consisting of a mathematical function called a hash.
  • It is extremely repetitive, and therefore computationally expensive as the Computers compete to find a hash with specific properties.
  • They are rewarded with a newly-minted bitcoins (currently 12.5 BTC per block), plus all of the small transaction fees users have paid. Miners collectively verify the entire blockchain and the transactions which are added to the block.
  • If any malicious actor tries to spend coins fraudulently those transactions will be ignored by the rest of the network. For making some fraud the miner has to possess a huge amount of computational power, such that they could mine block after block, winning the proof of work competition time after time. This is known as a ‘51% attack’.
  • Thus attempting such a fraud is extremely expensive as it costs as much as the hardware and energy required. Consequently, it is better (i.e. more profitable) for miners to remain honest.
  • Under Proof of Work systems, if a miner invests 10 times more than another, they will actually receive more than 10 times the computational power.

 

Proof of Stake (POS):-

 

  • POS will make the entire mining process virtual and replace miners with validators, however, have the same purpose of validating transactions and achieving consensus, however, the process is quite different than in Proof of Work systems.
  • In this mechanism there is no mathematical puzzle, instead, the creator of a new block is chosen based on their stake. The stake is how many coins/tokens one possesses or we can say an investment.
  • For example, if one person staked 10 coins and another person staked 50 coins, the person staking 50 coins would be 5 times more likely to be chosen as the next block validator.
  • Proof of stake major advantage is cost-effectiveness and do a better job of promoting network health comparing to POW systems.
  • It is to be a much greener option compared to Proof of Work systems.
  • It is much efficient than the POW as it cutting out the energy-intensive mining process thus reduces investment on computational power. Here Reward potential will get more in POS.

 

Delegate Proof of Stake (DPOS):-

 

  • DPoS is the next step in the evolution of consensus mechanisms It is an interesting form of POS. In this system, they have to register themselves as a delegate.
  • Some blockchains such as Lisk, EOS, BitShares, and Ark have adopted this consensus mechanism.
  • It speeds up the transactions and block creation process seeks to reach consensus more efficiently which drastically increases speed and scalability.
  • There is a voting mechanism in which users vote to select delegates and the top tier of the delegate (who have collected the most votes) earn the right to validate transactions.
  • Votes are also weighted according to the size of each voter’s stake. Rather, votes from users with large stakes can result in users with relatively small stakes being elevated to the top tier of delegates list.
  • These delegates are responsible for validating transactions and creating blocks and are in return awarded the associated fees.
  • Voting is a continuous process and each delegate in the top tier is always at risk of being replaced by a user who gets more votes and is therefore considered more trusted.
  • Users can also vote to remove a delegate in the top tier who has lost their trust and they can also vote for a group of ‘delegates’.
  • It is much faster than tradition Proof of Work and Proof of Stake systems and also it is energy efficient.

 

I am happy to receive any feedback may be positive or negative.

THANK YOU!

 

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Satish Joshi

Satish has experience on web development believes in hard work and dedication. He is friendly and an honest person.

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