{"id":5893,"date":"2022-08-08T15:21:35","date_gmt":"2022-08-08T09:51:35","guid":{"rendered":"https:\/\/externlabs.com\/blogs\/?p=5893"},"modified":"2023-04-04T17:47:06","modified_gmt":"2023-04-04T12:17:06","slug":"consensus-algorithm-blockchain","status":"publish","type":"post","link":"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/","title":{"rendered":"The Essence of Blockchain Technology: Consensus Algorithm"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Every day there is something new in blockchain technology that becomes the headline of the tech industry. No matter how hard you try to hold on to the latest technologies, there will always be something new on the table.&nbsp;<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#The_Blockchain_Consensus_Algorithm\" title=\"The Blockchain Consensus Algorithm\">The Blockchain Consensus Algorithm<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#Consensus_Algorithms_and_Decentralized_Finance\" title=\"Consensus Algorithms and Decentralized Finance\">Consensus Algorithms and Decentralized Finance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#Types_of_Blockchain_Consensus\" title=\"Types of Blockchain Consensus\">Types of Blockchain Consensus<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#1_Proof-of-Work_PoW\" title=\"1. Proof-of-Work (PoW)\">1. Proof-of-Work (PoW)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#2_Proof-of-Stake_PoS\" title=\"2. Proof-of-Stake (PoS)\">2. Proof-of-Stake (PoS)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#3_Delegated_Proof_of_Stake_DPoS\" title=\"3. Delegated Proof of Stake (DPoS)\">3. Delegated Proof of Stake (DPoS)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#4_Proof-of-Authority_PoA\" title=\"4. Proof-of-Authority (PoA)\">4. Proof-of-Authority (PoA)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#5_Proof-of-Burn_PoB\" title=\"5. Proof-of-Burn (PoB)\">5. Proof-of-Burn (PoB)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#6_Proof-of-Capacity_Proof-of-Space_PoC\" title=\"6. Proof-of-Capacity\/ Proof-of-Space (PoC)\">6. Proof-of-Capacity\/ Proof-of-Space (PoC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#7_Proof_of_Elapsed_Time_PoET\" title=\"7. Proof of Elapsed Time (PoET)\">7. Proof of Elapsed Time (PoET)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#8_Proof-_of-History_PoH\" title=\"8. Proof- of-History (PoH)\">8. Proof- of-History (PoH)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#9_Proof_of_Importance_PoI\" title=\"9. Proof of Importance (PoI)\">9. Proof of Importance (PoI)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/externlabs.com\/blogs\/consensus-algorithm-blockchain\/#Takeaway\" title=\"Takeaway!\">Takeaway!<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p class=\"wp-block-paragraph\">Ever wonder what the core of blockchain technology is?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is a consensus algorithm.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We can say the consensus algorithm is the essence of revolutionary blockchain technology.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But, what is a consensus algorithm?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In layman&#8217;s terms, a consensus algorithm makes all the blockchain consensus sequences diverse from one another.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I mean, think of this, blockchain networks assist billions of people in the same space, but how come they never interfere with one another, and how do they exist mutually?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The answer to this is the architecture of blockchain technology. Indeed, the blockchain architecture is intelligently designed, and the consensus algorithm for blockchain is at the root of this revolutionary architecture.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, if you really want an in-depth knowledge of consensus sequences, then you have to read the full blog. In today\u2019s blog, we will cover A-Z of the consensus algorithm so let\u2019s dive into this.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Blockchain_Consensus_Algorithm\"><\/span>The Blockchain Consensus Algorithm<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"472\" src=\"https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-1024x472.webp\" alt=\"consensus algorithm \" class=\"wp-image-5894\" srcset=\"https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-1024x472.webp 1024w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-300x138.webp 300w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-768x354.webp 768w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-1536x708.webp 1536w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-380x175.webp 380w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-800x369.webp 800w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-1160x535.webp 1160w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-760x350.webp 760w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-1600x738.webp 1600w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm-600x277.webp 600w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/featured-image_-consensus-algorithm.webp 1700w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Technically, consensus algorithms are supervisory processes where the individuals in a group create and support the decision that works best for all. It\u2019s a resolution where people foster the majority decision, whether they are in favor of it or not.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, it&#8217;s just an anonymous method to make a decision. Not a new thing! I know. But in blockchain, it is important because here it is not about 10-100 people. Here it is about thousands and millions of people. In a consensus algorithm of blockchain, one not only agrees with the majority of votes but also with the decisions that benefit all.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, it&#8217;s a win for all.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The blockchain consensus algorithm is a method to create equality and fairness in the technology world.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At present, there are abundant blockchain consensus algorithms in the crypto ecosystem, and many more are planning to enter the marketplace. This makes all the <a href=\"https:\/\/externlabs.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">blockchain development companies <\/a>eager and authoritative.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Consensus_Algorithms_and_Decentralized_Finance\"><\/span>Consensus Algorithms and Decentralized Finance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In cryptocurrencies, individual assets are recorded in a database, which is labeled as a blockchain. It&#8217;s important that every node maintains an identical copy of the database, or else you will end up with odd pieces of information, sabotaging the entire process of the cryptocurrency network.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is public-key cryptography that makes sure end-users cannot lavish on each other&#8217;s coins. And so there is a single source of truth on which the participants rely or are able to determine whether they have spent their funds or not.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Satoshi Nakamoto introduced a Proof of Work system to pull together participants. We will discuss PoW later. For now, we will discuss some of the common traits of the consensus algorithms that are in existence.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Firstly, the users who want to add blocks (validators) offer a \u201cstake\u201d.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A stake is a value that a validator must provide; it discourages them from acting untruthfully. And if they cheat, they will lose their stake.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even so, why would they bother putting their own resources at risk? Well, because there is also a reward. The reward generally is native crypto made up of fees paid by other end-user, a freshly generated cryptocurrency, or both.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The last thing we will need is transparency. We should be able to detect when someone is eluding us. Ideally, it could be costly for them to produce blocks, but it would be cheap to validate them.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Blockchain_Consensus\"><\/span>Types of Blockchain Consensus<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"918\" src=\"https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-1024x918.jpg\" alt=\"consensus algorithm \" class=\"lazyload_inited wp-image-5896\" srcset=\"https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-1024x918.jpg 1024w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-300x269.jpg 300w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-768x688.jpg 768w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-1536x1377.jpg 1536w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-2048x1836.jpg 2048w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-380x341.jpg 380w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-800x717.jpg 800w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-1160x1040.jpg 1160w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-760x681.jpg 760w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-1600x1434.jpg 1600w, https:\/\/externlabs.com\/blogs\/wp-content\/uploads\/2022\/07\/Group-88-600x538.jpg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Proof-of-Work_PoW\"><\/span>1. Proof-of-Work (PoW)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Proof-of-work was the earliest consensus mechanism created and used by Bitcoin, Ethereum, and other public blockchains. Although concerns over scalability are universal, PoW is considered the most authentic and assured of all consensus mechanisms.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The term \u201cProof-of-work\u201d was coined in the late 1990s and was first applied by Satoshi Nakamoto in the context of digital currencies. In the case of PoW, miners contest against one another to solve complex high computational puzzles. The first one to come up with a 64-digit hash earns the right to create the new block and validate the transactions. The successful miner also gets rewarded with a block reward.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the operating cost for PoW is humongous because of the massive amount of computational resources to generate new blocks. This is one barrier for new miners. Other than the high cost, one more red alert in PoW is the impact of electrical consumption on the environment. This has led to the introduction of proof-of-stake (PoS).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Proof-of-Stake_PoS\"><\/span>2. Proof-of-Stake (PoS)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This popular method concerns staking. In the Proof-of-Stake system, miners have to \u201cpledge\u201d a stake of cryptocurrency for a chance to be chosen as a validator. The process is not exactly like a lottery system.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike PoW, in PoS the miners will simply earn transaction fees. Proof-of-Stake is also considered a more sustainable and environmentally friendly option as compared to PoW. Plus, it is secure against a 51% attack.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some of the eminent PoS platforms are <a href=\"https:\/\/cardano.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Cardano <\/a>(ADA), Solana (SOL), and Tezos (XTC).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Delegated_Proof_of_Stake_DPoS\"><\/span>3. Delegated Proof of Stake (DPoS)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It is a modified consensus mechanism, the Delegated Proof-of-Stake anticipates a reputation-based voting system to get consensus. The users of the network will \u201cvote\u201d to choose \u201cwitnesses\u201d or &#8220;block producers&#8221; to secure the network at their behest.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, only the top-tier witnesses (the ones with the most votes) will earn the right to validate the blockchain transactions. For voting, the users add tokens to the staking pool. Then the votes are weighed on the basis of the size of each voter\u2019s stake- so as our Shark Tank judges say, the more skin in the game, the more voting power.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The block producers in the top tier are always at risk of being replaced by those who are deemed trustworthy and thus achieve more votes. This encourages the witnesses to be honest every time, thus ensuring the integrity of the blockchain network.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DPoS is less prevalent than PoS and is considered more inclusive than others. It is most often used by Lisk (LSK), EOS.IO (EOS), Steem (STEEM), <a href=\"https:\/\/bitshares.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">BitShares<\/a> (BTS), and Ark (ARK).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Proof-of-Authority_PoA\"><\/span>4. Proof-of-Authority (PoA)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Don\u2019t mix Proof-of-Authority with Proof-of-Activity, as Proof-of-Authority works by opting for the validators based on their reputation. It is a more advanced version of PoS and was proposed by Gavin Wood, Ethereum co-founder in the year 2017.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this case, the validators will not wager coins. Instead, they will put their reputations on the line to validate their blocks. This differs from the majority of blockchain protocols, for which you don\u2019t have to reveal your identity.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The good thing is, that this type of consensus protocol requires no computing power, so it is less resource-demanding than its predecessors. It is the less expensive option, making it a favored solution for private networks, such as JP Morgan (JPMCoin). Other PoA-based projects encompass VeChain (VET) and the Ethereum Kovan testnet.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Proof-of-Burn_PoB\"><\/span>5. Proof-of-Burn (PoB)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One sustainable alternative to the PoW algorithm is Proof-of-Burn (PoB). In PoB, miners have the power to mine a block by destroying the predetermined number of tokens by sending them to an eater address so that they can not be recovered or spent again.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, the more coins burned, the greater the chances of being selected randomly. This method demands miners to sacrifice their short-term wealth in order to gain the lifelong privilege of creating new blocks and encourages long-term commitments.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Proof-of-Capacity_Proof-of-Space_PoC\"><\/span>6. Proof-of-Capacity\/ Proof-of-Space (PoC)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As the name implies, PoC is also termed as Proof-of-Space (PoSpace). Its mining algorithm is based on the proportion of space present on a miner\u2019s hard drive.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Proof-of-Capacity, miners have a list of all hashes beforehand, a process called plotting. These plots are stockpiled on a hard drive. This way, the more storage capacity the miner has, the more solutions there will be.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">PoC doesn\u2019t need any expensive equipment; it opens up doors for the average person to participate in the network. This algorithm of blockchain is currently in use by <a href=\"https:\/\/signum.network\/\" target=\"_blank\" rel=\"noreferrer noopener\">Signum <\/a>(SIGNA), Storj (STORJ), and Chia (XCH).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_Proof_of_Elapsed_Time_PoET\"><\/span>7. Proof of Elapsed Time (PoET)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This type of consensus algorithm for blockchain requires verification. The users have to identify themselves. The Proof-of-Elapsed-Time (PoET) utilized trusted computing to impose random waiting times for block construction. It was first developed by Intel in 2016 and was based on Intel Software Guard Extensions (SGX).&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is a time-lottery-based consensus protocol, and it works by assigning distinct wait times to every node in the network. While waiting, these nodes go to \u201csleep\u201d for a specific duration. The first one to wake up is awarded mining rights.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_Proof-_of-History_PoH\"><\/span>8. Proof- of-History (PoH)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Proof-of-history offers proof of historical events. It was developed by Solana and PoH allows \u201ctimestamps\u201d to be developed into the blockchain, by verifying the time between transactions without relying on other nodes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This consensus method is enabled by a sequential hashing- VDF (verifiable delay function).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_Proof_of_Importance_PoI\"><\/span>9. Proof of Importance (PoI)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It was first introduced by XEM. The Proof-of-Importance (PoI) chooses the miners based on a process called \u201charvesting\u201d. It is based on a number of factors, like the size of transactions, the amount of vested currency, and network activity. The higher the score, the more will be the probability of being chosen and getting a transaction fee.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Takeaway\"><\/span>Takeaway!<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is no one perfect approach for verifying the authenticity of the distributed blockchain network. Each consensus algorithm for blockchain has its own assortment of advantages.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, choosing them wisely is more important as per your business network.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The blockchain network can\u2019t function properly without the consensus algorithm to authenticate each and every transaction.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, among all these consensus algorithms of blockchain, the PoW (Proof-of-work) remains dominant.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">All <a href=\"https:\/\/externlabs.com\/mobile-development.php\" target=\"_blank\" rel=\"noreferrer noopener\">mobile app development companies<\/a> that work with blockchain are familiar with these protocols.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For any further doubts, <a href=\"https:\/\/externlabs.com\/contact.php\" target=\"_blank\" rel=\"noreferrer noopener\">contact us<\/a>! Our <a href=\"https:\/\/externlabs.com\/hire-blockchain-developer.php\" target=\"_blank\" rel=\"noreferrer noopener\">blockchain experts<\/a> will be more than happy to resolve your blockchain-related issues.&nbsp;&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every day there is something new in blockchain technology that becomes the headline of the tech industry. No matter how hard you try to hold on to the latest technologies, there will always be something new on the table.&nbsp; Ever wonder what the core of blockchain technology is?&nbsp; It is a consensus algorithm. We can&hellip;<\/p>\n","protected":false},"author":2,"featured_media":5895,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[44,180],"tags":[184,1440,189],"class_list":["post-5893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","category-information-technology","tag-blockchain","tag-consensus-algorithm","tag-mobile-app-development"],"_links":{"self":[{"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/posts\/5893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/comments?post=5893"}],"version-history":[{"count":0,"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/posts\/5893\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/media\/5895"}],"wp:attachment":[{"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/media?parent=5893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/categories?post=5893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/externlabs.com\/blogs\/wp-json\/wp\/v2\/tags?post=5893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}