Blockchain Basics

What is blockchain consensus?

When it comes to blockchain consensus you might have stumbled across “Proof of Work” or “Proof of Stake” but have you ever heard about “Proof of Burn”?

Proof of Work

Bitcoin, the first implementation of blockchain technology, was a paradise for tech-enthusiasts when it first started. The consensus-driven algorithm Proof of Work (POW) made it possible to earn money, only using the CPU of a private computer.

Proof of Stake

While Ethereum used POW at the beginning it later changed to Proof of Stake (POS). The basic idea of this blockchain consensus is that it is not a miner who did the computing that gets the rewards, but a miner who has invested more money. A dictatorship of the rich? Not completely.

Delegated Proof of Stake

Delegated Proof Of Stake (DPOS) is a very fast blockchain consensus-driven mechanism. It is renowned for its implementation in EOS. It is often referred to as digital democracy, thanks to its stake-weighted voting system.

Proof of Elapsed Time

The Proof of Elapsed Time protocol (POET), created by Intel, is part of the open-source project HyperLedger of the Linux foundation. The way it works is comparably easy to understand: In a trusted execution environment a lottery is started in which everyone can participate. The winner is picked based on who first finishes the waiting time. The winner is called ‘Leader’ and will be allowed to create a new block.

Other blockchain consensus models

There are many more blockchain consensus models, too many in fact to explain them all in detail. While the ones mentioned above are the most used models, there are smaller projects and protocols, some of which are not in use at all. Proof of Burn for example. In this system operating miners have to destroy coins by transferring them to a wallet, which can only accept coins. The more coins that are spent, the greater chance of being chosen as the winner.

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