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    Consensus Mechanisms: Different Types of Consensus

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    Varun Khosla
    Consensus mechanisms are rules that a blockchain network uses to agree on the validity of transactions. They ensure all participants process transactions in the same order. The main types are proof of work (PoW), used by Bitcoin, practical Byzantine fault tolerance (PBFT), used by Hyperledger Fabric, and proof of stake (PoS), where consensus depends on participants' stakes in the system. Each type has advantages and disadvantages related to resources, scalability, and resistance to attacks.

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    Consensus Mechanisms: Different Types of Consensus

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    Varun Khosla
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    Consensus mechanisms are rules that a blockchain network uses to agree on the validity of transactions. They ensure all participants process transactions in the same order. The main types are proof of work (PoW), used by Bitcoin, practical Byzantine fault tolerance (PBFT), used by Hyperledger Fabric, and proof of stake (PoS), where consensus depends on participants' stakes in the system. Each type has advantages and disadvantages related to resources, scalability, and resistance to attacks.

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    ConsensusMechanisms_Final_vF

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    Consensus mechanisms are rules that a blockchain network uses to agree on the validity of transactions. They ensure all participants process transactions in the same order. The main types are proof of work (PoW), used by Bitcoin, practical Byzantine fault tolerance (PBFT), used by Hyperledger Fabric, and proof of stake (PoS), where consensus depends on participants' stakes in the system. Each type has advantages and disadvantages related to resources, scalability, and resistance to attacks.

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    © All Rights Reserved
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    41 views1 page

    Consensus Mechanisms: Different Types of Consensus

    Uploaded by

    Varun Khosla
    Consensus mechanisms are rules that a blockchain network uses to agree on the validity of transactions. They ensure all participants process transactions in the same order. The main types are proof of work (PoW), used by Bitcoin, practical Byzantine fault tolerance (PBFT), used by Hyperledger Fabric, and proof of stake (PoS), where consensus depends on participants' stakes in the system. Each type has advantages and disadvantages related to resources, scalability, and resistance to attacks.

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    of 1

    BLOCKCHAIN

    # C O N S E N S U S

    Consensus Mechanisms M E C H AN I S M S

    # P B F T # P O W # P O S

    EXPLAINER

    Consensus Mechanisms are the rules by which a network agrees to the


    validity of transactions. The process ensures participants process the
    same set of transactions in the same order on the blockchain.

    D i f f e r e n t Ty p e s o f C o n s e n s u s
    P r a c t i c a l B y z a n t i n e F a u l t To l e r a n c e ( P B F T )
    • Participants or nodes in a network sign off on a transaction by executing the chaincode correctly
    • Consensus that a transaction is valid is reached once a certain number of identical responses is
    reached
    • Works best for permissioned blockchains
    • Used on Hyperledger Fabric v1
    Pros:
    • Tolerant of a failure by a minority of nodes, which is a strength for permissioned networks
    Cons:
    • Failure of more than 1/3 of nodes can result in a lack of consensus and transactions not being
    executed
    • This method is only viable for permissioned blockchains

    Proof of Work (PoW)


    • In order to change a record on a blockchain, you must redo the proof of work, a complex computational
    task that requires an arbitrary amount of computing power
    • You receive a fee as a reward for exerting this power
    • Used on Bitcoin blockchain, and Ethereum Homestead release (Ethash)
    Pros:
    • Requires a lot of computing power to attack
    Cons:
    • This is an expensive solution resource-wise, in that it requires a lot of computing power
    • This method has a limited scale

    Proof of Stake (PoS)


    • Consensus is determined on valid peers agreeing
    • Agreement is determined by a participants reputation or stake in the system / network
    • Used on PPCoin
    Pros:
    • Participants are accountable for their own actions
    • Participants ability to make future validations or changes requires trustworthy reputation in the
    system, which incentivizes good behavior
    Cons:
    • Difficult to succeed in a public network
    • Trust and reputation of the participants is necessary for validation

    Sources: http://pmg.csail.mit.edu/papers/osdi99.pdf
    http://www.gartner.com/document/3426425?ref=AutoReg
    https://bytecoin.org/blog/proof-of-stake-proof-of-work-comparison
    https://intelledger.github.io/introduction.html

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