The task of consensus is to help the nodes of a peer-to-peer network come to a consensus about what its new state should be - that is, to choose the next block in the blockchain chain. Algorithm of interaction of distributed ledger nodes for making decisions on changing and synchronizing information.
For Cellframe we designed modified Proof of Stake consensus called ESBOCS
Types of consensus
Proof of Work (PoW)
Is a consensus algorithm in which the probability of obtaining the right to validate a block depends on the share of the network’s computing performance owned by the node. The algorithm is one of the earliest and most widespread, it underlies the Bitcoin network. Nodes are not required to provide opinions before a consensus is reached. Instead, the nodes use the hash function on the block repeatedly, changing one of its elements (NonCE field) in order to fulfill a certain condition, for example, so that the hash sum of the block begins with a certain number of zeros. The algorithm by which the Bitcoin mining network comes to a consensus, determining which of the mining nodes will write the formed block to the blockchain. PoW boils down to two main points:
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- The need to perform a certain rather complex and time-consuming computational task
- Possibilities to quickly and easily check the result
Proof of Authority (PoA)
Is a consensus with a limited set of keys whose signatures are considered valid. Consensus procedure is based on the differentiation of user rights.
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Proof of Stake (PoS)
Is a consensus where validation occurs through signing blocks with a wallet (or delegated key of the wallet) on which a definite sum of tokens is blocked.
Unlike Proof of Work (PoW), PoS doesn’t depend on hash algorithms. To confirm ownership of funds (coins or tokens) digital signature is used. Every participant has a chance to be randomly chosen as new Block creator (validator) and this chance can be increased proportionally by increasing the “weight” of the node (it’s shared in the total pool of locked m-tokens). In this case consensus is something like lottery. Reward is calculated in coins.
Proof of Service is a part of node verification based on Proof of Stake (PoS) before engaging in the network. It is an additional condition to PoS, which shows that node provides some service.
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