Importance of Consensus Mechanism For Blockchain
Key points
- Meaning of Consensus
- Properties
- Governance Model
- Top Blockchain Consensus Algorithm
Meaning of Consensus
It is a process of developing an agreement in a network, among people who have no clue who others are. The blockchain consensus algorithm is vital for verifying the authenticity of distributed blockchain platforms.
For the proper functioning of blockchain, nodes must reach a consensus regarding the state of transactions and blocks. The transactions are mostly accepted, rejected, or are kept pending. Nodes are allowed to agree upon:
- Transaction data: It is information about addresses and amounts.
- Block state: If a block is valid or invalid.
Consensus thus can be defined as a protocol used in the governance of consensus mechanism and ensuring its trustless nature. There are three properties on which the effectiveness and applicability of the consensus protocol can be determined.
Properties
The three properties are:
- Safety: The safety of the consensus protocol is insured, when all the nodes deliver the same output and the output produced adheres to the rules of the protocol. It is also referred to as the consistency of the shared state.
- Liveness: Liveness is guaranteed by a consensus mechanism when all non-faulty nodes participating in the consensus deliver a value.
- Fault Tolerance: Fault tolerance is provided by the consensus mechanism when it could recover from the failure of a participating node in consensus.
Governance Model
There are two types of governance models with which each alternative consensus algorithm is likely to be linked.
- Decentralized governance model: This is the model in which the community participates in the process of decision-making. To accomplish this, communities either commit code to the software so that the consensus mechanism can be improved or by simply transacting in the network. Cryptocurrencies that implement this model are Bitcoin, Dogecoin, and many more.
- Centralized governance model: It is opposite to the decentralized governance model, as the power to control the network, transactions, and overall consensus mechanism is in the hands of a small group. The projects that implement this model are Bitcoin Cash, Ripple, and many more.
Top Blockchain Consensus Algorithm
There are three main consensus algorithms.
- Proof-of-Work (PoW): It is based on cryptographic calculations in which the miners are required to use intensive energy to solve the problem of finding a hash.
- Proof-of-State (PoS): It is based on participant stake; the participants are required to stake their coins to become a validator.
- Delegated Byzantine Fault Tolerant (DBFT): It is based on federated consensus, in which a consensus is reached through an agreement between various central authority nodes.
Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investing.
Photo by – Maiconfz on Pixabay
