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7 alternative consensus procedures besides proof of work and proof stake

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Types of Consensus

There are many computers in a network called a “peer-to-peer network” called a “blockchain.” These computers are called nodes. All the nodes in the network must check the data in the blockchain to make sure it is correct. This is how the network becomes secure, immutable, and transparent. If you want to make changes or do anything that reads/writes on the network, all of the nodes in it must agree. This is what makes a blockchain network work. All of the blockchains that are out there now use some kind of consensus mechanism in some way or another.

One of the most popular ways to get people to agree is called proof-of-work (PoW). There are two big cryptocurrencies in the market that use this: bitcoin and ethereum. A type of cryptography called “PoW” makes it hard for nodes to add new blocks to the blockchain and make transactions on the network. Nodes use a lot of energy to solve these puzzles, and the first one who solves the puzzle and adds blocks is paid in bitcoin tokens. In the Bitcoin world, this process is called “mining.” A lot of people aren’t happy about PoW mining because it uses a lot of energy and leaves a lot of carbon behind. There are many reasons why the Ethereum network is going from a proof-of-work system to a proof-of-stake system. This is why (PoS).

The PoS consensus mechanism solves the problem of how much energy PoW uses. To be a “validator,” a node puts crypto tokens in a “mempool,” which is a pool of coins. The nodes then use the coins to verify transactions in the network, which is called PoS. People who stake coins get more money when they have more coins. PoS was built as an alternative to PoS and has become the second most popular way to get people to agree.

But they aren’t the only ones. With the proliferation of blockchain networks, new developments in consensus mechanism technology are occurring. Some new consensus mechanisms build on existing ones, while others are completely new. 7 Consensus Mechanisms:

1. Proof of Burn (PoB):

It also doesn’t need a lot of computer power. Instead, it leverages the notion of burning coins, where members send/burn their money to an unknown address. Nobody can get the secret keys, hence no one can access the address. These are also known as eater addresses.

By burning their currency, they commit to the consensus method. The coin burners are chosen at random to mine the next block. This is a sacrificial mechanism where miners give up short-term benefits for long-term gains. Miner’s burn more coins to increase chances of getting chosen to mine the next block.

Slimcoin, a Peercoin-based cryptocurrency, employs proof of burn for consensus. You can easily buy and exchange these coins at changeangel.io

2. Delegated Proof of Stake (DPoS):

DPoS is a PoS consensus iteration. Validators stake their coins to choose a delegation to validate blocks on behalf of the network. It’s similar to how people in democratic countries elect representatives to represent them.

Assume node X stakes 20 coins for a delegate and node Y stakes 2 coins. X will outweigh Y. The delegate with the most votes from nodes gets to mine the next block. This approach selects 21 to 100 delegates from the network.

DPoS is used by Cardano, EOS, and TRON. You can easily buy and exchange these coins at changeangel.io

3. Proof of Capacity (PoC):

PoC is a refinement of PoW. The answer to PoW’s challenging computational challenge is already stored on a storage device. It employs a method called plotting to determine all potential solutions to the hashing algorithm before mining.

The user who reaches the solution fastest (that is already stored in a storage device), gets the privilege to mint the new block in the chain. This process uses less energy than the PoW model, and a user does not need specialized software to participate.

Signum/ Burstcoin’s blockchain uses a PoC consensus process.

4. Proof of Elapsed Time (PoET):

PoET consensus employs only identifiable and verified nodes for mining. So the time it takes the nodes to mine a block is essential. The process assigns a random wait period, and the node that finishes it can mine additional blocks. Because the wait time is unpredictable, no node has any power over others. PoET uses less energy than PoS.

5. Proof of Authority (PoT):

PoA is a variation of PoS where validators risk their identification rather than their currencies. In PoS, richer players can forego verifying, while in PoA, the participant is betting their reputation. Only nodes that risk their reputation can mine new blocks and verify transactions.

VeChain is a PoA-based smart contract platform. You can easily buy and exchange these coins at changeangel.io

6. Proof of Activity (PoA):

Proof of Activity is a combination of the PoW and PoS consensus procedures where miners utilise their hardware to solve complicated computational problems to introduce new blocks. But the blocks generated are merely reward and header information.

The header information is then used to sign additional blocks. Validators who have staked more coins have a better likelihood of signing the block. Validators sign the block and it joins the network. The reward is split evenly between the miners and validators. The block is rejected if the validator does not sign it.

Decred (DCR) is a popular blockchain project that employs Proof of Activity. You can easily buy and exchange these coins at changeangel.io

7. Proof of Importance (PoI):

Another consensus process based on PoS. In PoI, nodes are evaluated based on their staked coins and how long they have possessed them. Other indicators including a node’s number of network transactions, net transfer, and transaction quantity and size over a defined number of days are also considered.

PoI assesses a node’s weight and presence in the network; the better rated nodes can contribute new blocks first. Other things beyond coin stakes limit the influence of whales who have the most coins.

Proof of Importance was introduced by XEM (New Economy Movement), an NXT fork. You can easily buy and exchange these coins at changeangel.io