What consensus algorithms are there in Blockchain?
What consensus algorithms are there in Blockchain?
There are blockchain networks where other type of consensus algorithm are used. Instead of "Proof of Work" (Bitcoin Consensal Algorithm), you have, for example, "Proof of Authority" or "Proof of stake".
"Proof of work"
In the case of Bitcoin, the mechanism or consensus algorithm is: "Proof of Work" , they perform certain algorithms. It all costs computing power, it's a kind of puzzle that they need to solve. If they have the answer to the algorithm then they say yes this is a valid transaction. If enough nodes (computers on the network) say it's true and conclude that it's a valid transaction and only if more than 50% agrees with it, it will be put on the Blockchain. It takes a while before the transaction is processed.
However, this means that a majority of nodes has to agree with each other. Thus, it may be possible to mess with, with possible quantum computers in the future. This is because a quantum computer is stronger and can replicate multiple transactions than the other computers within the network, so if there is more than 50% of the computing power of the network, the rest of the network will take over the transaction.
"Proof of authority"
The "Proof-of-Authority" mechanism / consensus algorithm can be used for private-chain setups. It is not dependent on solving difficult mathematical algorithms by nodes, but instead uses a hard-configured set of "authorities" - nodes that are explicitly allowed to create new blocks and put data into the blockchain. This makes it easier to maintain your own chain and to make responsible those who spend the block.
"Proof of stake"
In most cases you have to pay to use the blockchain network. So in the "Proof of Stake" mechanism or consensus algorithm, they came up something. The "Proof of stake" mechanism or consensusal algorithm can be described as a form of virtual mining. It is based on the money within the blockchain itself instead of miners. So if the money on the network says it's a right transaction , The transaction will be put on the blockchain. So, if someone has 4% of the money on the network, he / she has an impact on 4% of the network. Who has that amount money in the network? Nobody in the world has more than 51% of all the money in the network. If you already have 51% of the money in the network, why would you ever have a hack on the network - it's your own funds that you have Invested within the network.
When you work with blockchain application, they have already chosen a specific consensus algorithm, but it's important to understand what the differences are. If you make your own blockchain application without the use of existing technologies, you can make a choice in consensus algorithm.
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