Algorithms for reaching consensus

Algorithms for reaching consensus

The blockchain, as you know, is a distributed system with thousands of participants. As the system has no Central administrator, then the structure of the blockchain is decentralized. Therefore there is a need for a distributed consensus.


Most cryptocurrencies are recorded in the blockchain in two ways. Recorded transactions and records of the generated blocks. They arise in different ways, at the same time stored in a decentralized database.

Having the right key, you can create a record. Enter data of the new generated block is more difficult. Here should be complied with one condition: the agreement of the members, or the consensus to prevent intentional attacks on the network.

For example, a cryptographic instant messenger out bitmessage.

Proof-of-Work (PoW)

From English. – "proof of work". To perform an action, you need to do some work. This principle was laid down in a basis of work of the messenger out bitmessage.Bitmessage

The increase in processing power of the equipment allows to obtain more coins. If you start mining bitcoin , it was possible to use a conventional processor, now there is a Union in the Pula or the construction of a huge mining farms. Hence, a significant disadvantage of POW. What is it? The need to continually increase computing power of the miners worldwide. Despite the fact that the equipment, like any technology quickly becomes obsolete, energy consumption is growing in the world. And the results are used only within the blockchain.

Proof-of-Stake (PoS)

This is the next popular algorithm for achieving consensus. The first implementation – coin PeerCoin was conducted in 2012. Here the generation of a new block is executed by the network node, i.e. Noda, who has coins in his purse. The increase in the number of coins increases the probability of generating a new block.

There may be a variety of modifications of this algorithm. For example:

  • Leased Proof of Stake (LPoS)in something similar to the pool parties with a small number of coins can lease them large. As a bonus – a share of the reward, which is different to would be impossible.
  • Delegated Proof of Stake (DPoS)– this algorithm is more complex. Here, the generation of new units happening to those nodes that have elected all members of the network. The decision to change the architecture of cryptocurrencies take the same node.

The PoS algorithm, unlike POW, has virtually no drawbacks. In this case, calculations are not required, and accordingly, energy costs are minimized and there is no race of computing power. Attack 51% is also the maximum damage will cause to the attacker. Because after buying large amounts of cryptocurrency, there will be increasing its value. In the end, it will require large financial costs, she herself will turn against the attacker.

Forging mining cryptocurrency with an algorithm of consensus PoS. The bottom line is that you need to create a node, that is, a separate computer connected to the Internet. It must be a purse with a base amount of coins.

To start node DASH, you need 1000 coins. At the current rate it is more than 1 million US dollars. Not such a win-win situation for Monaco or Ark. However, to create masternode with the aim of obtaining huge profits can be important in case Your aim is to focus on is not too popular elements, the cost of which is very low. Growth will help to ensure that You are on masternode will be oblthe main addelem. You will be paid regular payments.PoS

POS also has disadvantages. Not least because the bulk of the coins for purchases not used. If You spend one coin DASH of thousands, of masternode will cease to be profitable.

However, POW and POS the list of algorithms consensus ends. Further the development has gone in directions:

  • various combinations of the two algorithms,
  • the complication of PoS with the objective of eliminating its defects.

Now let's talk about a few such algorithms.

Proof-of-Importance (PoI)

Similar in many respects to PoS. But there are some distinguishing criteria (the number of coins in the account masternode; masternode number of committed transaction; the time masternode in the network).

Effect of number of transactions and time spent masternode online is inversely proportional to the number of coins in the account. This can be seen in the NEM.

Proof-of-Authority (PoA)

The node will generate a block only in the case of special powers. The algorithm is suitable mainly for corporate and regulated coins. The developer controls the blocks, although of decentralization in this case we cannot speak.

Proof-of-Capacity (PoC)

Miners must allocate space on your hard disk in order to generate new and block and get the reward. "Computing power" is determined by the available space.



The most common consensus algorithm is PoW. It is used as in Bitcoin and most cryptocurrencies Top 10 by market capitalization. PoS it gradually enters the market. And it is projected that Ethereum go to the PoS algorithm.

Currently, the most advantageous to look mixed algorithms in which there are PoS and PoW or serve the development and the specific revision of one of them.

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