Consensus Algorithm

Consensus Algorithm Type

Consensus algorithms are algorithms for participants to make unified decisions through decision-making. In the blockchain, consensus algorithms are also called consensus models, consensus methods, consensus mechanisms, and consensus protocols, and there is no central agency to mediate decision-making. This stems from the conviction that blockchain data will not be forged or altered because all participants have the same data at the same time. If someone else malicious attempts to falsify the data, you have to change the information about the previous block at a huge price. Consensus algorithms provide algorithms that allow multiple nodes to mutually validate data and generate correct blocks based on consensus.

PoW (Proof of Work)

PoW (Proof of Work) is a representative consensus algorithm used in Bitcoin as a proof of work method. In order for the miner to be rewarded, the block must be created through mining. Block generation is judged based on hash power, and hash power is a criterion for determining how much computing power can solve problems in a short time. Block creation obtains permission to create blocks by nodes that provide the highest hash power.

PoS (Proof of Stake)

PoS (Proof of Stake) is a proof-of-equity approach that allows nodes with large stakes to create blocks. Authorization to create blocks in proportion to equity, not PoW's work. In the case of PoW, compensation is paid at the time the block is created, while PoS is compensated with interest on the equity. The proof-of-equity scheme also penalizes the creation of incorrect blocks to prevent malicious intentional block generation. Anyone can participate in the blockchain network, as long as they have a coin equivalent to their stake, so that more nodes can participate in the consensus process in a decentralized environment.

DPoS (Delegated Proof of Stake)

DPoS (Delegated Proof of Stake) is a delegated equity demonstration method in which nodes with stakes determine the block creator through voting. In other words, all nodes do not have block creation rights, but they elect a parent node through a vote to delegate authority. It has fast performance and scalability because a small number of agreed parent nodes create blocks.