Consensus Algorithms in Blockchain - Part 2
Here’s the next selection of consensus algorithms - with a short description, that might be useful in your journey through blockchain. Now we take a dive into the more centralized solutions.
>> Consensus Algorithms in Blockchain - Part 1
Delegated Proof-of-Stake (DPoS)
In the basic Proof-of-Stake, holders are voting for the blocks. In Delegated Proof-of-Stake (used by projects EOS and Steemit), they vote for periodically shuffled delegates that will create and validate them on their behalf.
This approach allows for very fast, cheap transactions. The blockchain is more scalable and energy efficient - but, of course, paying its price in centralisation.
Going even deeper into the centralized solutions: here we have a system, where the transactions are validated by the admins. Consensus based on Proof-of-Authority is a solution optimized for private networks, highly scalable, with excellent throughput.
One might argue, that it rips off one of the biggest benefits of blockchain - but in fact it might be a reasonable solution for some business cases.
Proof-of-Weight attributes your probability of mining a new block to a certain value. It can be any number related with the node, such as the amount of blockchain related data that you store on your drive, or any other customized weight - it is yours to choose.
One of the most known examples is Filecoin. Your “weight” in the blockchain depends on how much IPFS data you store at the given time.
Byzantine Fault Tolerance (BFT)
Byzantine Fault Tolerance is a solution to a classic problem, usually depicted with an example of generals planning an assault on a surrounded city. They have to agree whether to attack or break the siege. The main problem is that some of the generals might be traitors, trying to disrupt the decision process and vote to retreat .
It’s used by Ripple and Hyperledger, being a low cost, scalable solution. But it raises some trust issues, that have to be solved through centralization.
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