Decentralized networks give users much more control over the rules and maintenance of that network. Let’s explore how information is confirmed, or mined, and added to the blockchain. But first, we’ll examine the differences between centralized and decentralized networks.
There is only one state of truth in a blockchain. But how can we make sure the state of truth doesn’t get tampered with? Consensus algorithms are protocols that nodes use to agree with each other on the one and only state of truth in the blockchain. In this video, we explain to you the definition of consensus algorithms and how they work. In this video, we answer:
– What is the consensus algorithm?
– What are the benefits and what are the limitations?
– What types of consensus algorithms are available?
– What are the best options?
It also introduces Proof of Participation, vs Proof of Work and Proof of Stake.
This video outlines 5 core elements
How does blockchain consensus help to establish truth and validity? What is a consensus mechanism? What is forking a blockchain? What is the difference between “valid and true”? What are the limits to blockchain as a “truth machine”? What are the trade-offs between truth and the cost of verification? This video explores some of the issues relating to blockchain consensus and validity by using an analogy to a collectively owned message board. It includes discussion of the way that smart contracts might build in financial incentives for validation.
In this brief video, Vitalik Buterin describes the difference between proof of work and proof of stake and why he considers proof of stake to be a more efficient consensus mechanism.
Proof of stake is a type of algorithm by which a blockchain network aims to achieve distributed consensus. In proof of stake, the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e., the stake).
Proof-of-work uses mining; which requires solving computationally intensive puzzles to validate transactions and create new blocks. This uses a tremendous amount of energy.
Proof of stake requires much less energy consumption.
Consensus is fundamental to a blockchain. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.
Consensus algorithms are in continual development to increase performance and efficiency.
Vitalik Buterin is a Russian-Canadian programmer and writer primarily known as a co-founder of Ethereum and as a co-founder of Bitcoin Magazine.