Consensus in the network refers to the process of achieving agreement among the network participants as to the correct state of data on the system. Consensus leads to all nodes sharing the exact same data.
A consensus algorithm, hence, does two things: it ensures that the data on the ledger is the same for all the nodes in the network, and, in turn, prevents malicious actors from manipulating the data.
The consensus algorithm varies with different blockchain implementations.
Blockchain consensus mechanisms can be divided into 10 types:
Prof of work
Prof of Work mechanism involves miners who solve complicated mathematical puzzles to produce a new block.
Proof of Stake
Proof of Stake uses a randomized process to figure out who gets a chance to produce the next block.
Delegated Proof of stake
In Delegated Proof of stake process, users can stake their coins and vote for a particular number of delegates to create a new block.
Proof of Capacity
Proof of Capacity method stores solution of complex mathematical puzzles in digital storages, such as hard disks that are used to create a new block.
Proof of Elapsed Time
Proof of Elapsed Time process randomly and fairly decides the producer of a new block based on their waiting time.
Proof of Identity
Proof of Identity is a cryptographic evidence for a user’s private key that is cryptographically attached to a specific transaction.
Proof of Authority
In Proof of Authority mechanism, the identities of validators in the network are at stake.
Proof of Activity
Proof of Activity mechanism is a hybrid of Proof of Work and Proof of Stake.
Proof of Burn
Proof of burn is an alternative consensus algorithm that tries to address the high energy consumption issue of a POW system.
Byzantine Fault Tolerance
Byzantine Fault Tolerant consensus algorithm implements an adopted version of the Practical Byzantine Fault Tolerant algorithm, and seeks to provide significant improvements over Bitcoin’s Proof of Work consensus protocol.
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