Consensus algorithms
Consensus
Consensus is a mechanism to ensure that parties agree that a certain state of the system is correct, which is the truth.
PoW - Proof-of-Work: origins
Concepted by Cynthia Dwork and Moni Naor in 1992 in the paper "Pricing via Processing, Or, Combatting Junk Mail, Advances in Cryptology"; named by Markus Jakobsson and Ari Juels in 1999 in the paper: "Proofs of Work and Bread Pudding Protocols";
Asymmetry:
- Very difficult (but possible) to calculate;
- Easy to check;
Hashcash
Proposed in 1997 by Adam Back, uses the initial concept of PoW to decrease spam in emails through SHA-1 hash calculations
Example:
X-Hashcash: 1:20:1303030600:adam@cypherspace.org::McMybZIhxKXu57jd:ckviSHA-1 = 00000b7c65ac70650eb8d4f034e86d7d5cd1852f
PoW - Proof-of-Work
When we talk about Blockchain, PoW is a test of computational work, with expenditure of processing and energy. It aims to ensure the decentralization and security of distributed transactions.
These are mathematical calculations that miners do on their computers to verify that the transactions are valid.
Mining comes from the "discovery" of nonce, which is the process of trial and error to find the number that satisfies the degree of difficulty of the network.
The timestamp is used in PoW mining to adjust the difficulty level of the network, keeping the block mining at the average defined in the whitepaper of a Blockchain. For example, for Bitcoin this average is 10 minutes, while for Ethereum it is 15 seconds.
PoS - Proof-of-Stake
Known as proof of participation.
To participate in the validation, the amount of coins that the miner has is used, instead of the computational power.
The validator must place his deposited coins in a kind of safe to "prove" his participation, without moving the coins.
The more coins you have, the greater the chance of validating transactions and earning from them.
In terms of energy, it is more economical than PoW.
It should bring more security and decentralization, but it makes larger coin holders more likely to get more coins.
PoA - Proof-of-Authority
It is the proof of authority used in permissioned Blockchains.
It is a group of authorities, nodes defined and authorized to create new blocks in a chain.
It needs approval from most of the nodes for the block to be created.
Conclusion
In this lesson you learned about the most used consensus algorithms.
In the next lesson you will understand Bitcoin, the first Blockchain network capable of transferring values electronically.