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Understand the Blockchain Consensus Algorithm

Blockchain is a decentralized network that provides high security, transparency, and immutability. Are you also wondering how all these can be achieved? Who is controlling this network? Can every transaction be verified, provided there is no centralized authority? Blockchain is a consensus algorithm and blockchain development is the main part of the world that we will talk about in this blog today. If you want to start bitcoin trading check the story behind a bitcoin transaction .


What is the Blockchain Consensus Algorithm?


A blockchain consensus algorithm is a process in which peers associated with the blockchain network help the distributed ledger reach a consensus or consensus about the timing state. There is some consensus mechanism that helps the blockchain network to build a trust level between different nodes to ensure security in the environment and achieve reliability. This is the reason why DApp projects have become an important part of blockchain app development and distributed ledger environment.


The same algorithms work for many different purposes. In this blog, we have talked about the purpose of the blockchain consensus mechanism below.


           Aligning Economic Incentives


When it comes to building a trustworthy system that controls itself, it is important to align interests with all participants in the network. Blockchain protocol, in which case good behaviour is rewarded and bad actors are punished on the other hand. Along with this certain economic incentives are ensured to be regulated.


           Integrated agreement

The major objective of the consensus mechanism is to achieve a unified agreement. Unlike centralized systems, which require trust in all these authorities, users can start their work without trust with decentralized methods.


Blockchain consensus algorithms as the market become popular


Proof of Work (PoW)


It is used in the blockchain daemon. We all know that it was developed by Satoshi Nakamoto. It is also believed to be one of the oldest consensus mechanisms in proof of work. Also known as mining where the next participating nodes are also called miners. It is a mechanism in which miners use extensive computing power to solve complex mathematical puzzles. It also uses a variety of mining methods, such as CPU mining, GPU mining, FPGA mining, and ASIC mining. Who can solve the problem quickly and is then given a block as a reward. A riddle can be solved only by using an error method and trial. In this, the complexity of the puzzle depends only on its level and speed. Blocks can be mined on it. If you want to deal with the level of difficulty, then you will have to create a new block for this at a certain time limit.


Proof of Capability (POC)


Proof of Capacity is a mechanism in which the solutions of some complex mathematical puzzles are stored on a hard disk i.e. digital storage. The hard disk is used by the user only when blocks are to be created. It is a whole lot better and faster at evaluating solutions, with it providing many better opportunities to build blocks. This process is also called plotting. The first cryptocurrencies are Spacemint and Burstcoin, which rely on the PoC blockchain consensus protocol.


Proof of Activity (PoA)


It is designed with the convergence of PoS and PoW blockchain consensus model ie. In some such cases of PoA systems, electrical energy and some specialized hardware are used, similar to miner PoW. So that it can solve the cryptographic puzzle as soon as possible. However, By Block retains only the identity of the winner of the block and information related to the reward transaction. Here the system is converted into PoS. Testing by the verifier ensures the correctness of the block. In this, the open transaction processes are integrated into block containers found at the end.

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