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## INTRODUCTION
A lot of people are wondering why Blockchain has progressed so much in popularity in current years. However, there are top Blockchain features that make it popular such as decentralisation, distributed ledger, consensus algorithm and so on. Though my focus is on the consensus algorithm of a blockchain. So let's check it out in this guide to answer these questions.
## Discuss your favourite concept or term related to Blockchain
### THE CONSENSUS ALGORITHM OF A BLOCKCHAIN
In a nutshell, Blockchain technology has existed around for quite some period now, still vigorously being on the scene. Although there are some different impressions toward blockchain, yet nobody can entirely underrate its function in the global financial landscape. It first came into the scene through a popular cryptocurrency known as Bitcoin and is currently applied in different sectors.
Well, let’s dive a little deeper into the consensus algorithm of a blockchain.
We see something modern in blockchain technology emerging in the midst. Although no matter how much we try to comprehend the latest technology, they constantly have something different to give. So, have you ever wondered what the base of all these blockchain technologies is? Well, it is the consensus algorithms that serve as the primary origin of this revolutionary technology.
Consensus algorithms in blockchain are said to be what makes all the blockchain consensus sequences unique and special from one another. This means it is a fault-tolerant mechanism that is employed in the blockchain network to achieve necessary agreement, reliance, and security on available data. Also, It is helpful in record-keeping in a blockchain.
Nevertheless, we all know that the blockchain network enables millions and millions of people in the same domain. But have we ever asked how come they never infringe on one another or exist mutually?
Well, it all lies in the architecture of the
blockchain system. However, the architecture is cleverly built, and the consensus algorithms or mechanisms are at the heart of this architecture.
In simple terms, we can say Consensus algorithms are a decision-making technique within an organisation.
For instance, Imagine a group of 20 individuals that want to make a decision or conclude about an operation that benefits them all. In this process, every one of them can recommend an idea, but the majority carries the vote or will be in acceptance of the one that helps them the great while other members have to deal with this decision whether they liked it or not.
Now, let us imagine the same scenario with thousands of people. Believe me, it will drastically make it way harder.
All I want you to understand is that the concept of consensus algorithms does not just agree with the majority votes, instead, it also agrees with one that helps all of them. So, it’s always a win for the network. As such we can say the blockchain consensus categories are techniques to establish equality and fairness in the blockchain world.
The blockchain consensus protocol comprises certain goals such as ***coming to an agreement***, ***collaboration***, ***cooperation***, ***equal rights to every node***, and ***mandatory participation of each node*** in the consensus process to be set during the establishment of a blockchain as such, it provides privacy, security, and transparency.
Thus, a consensus algorithm aims at revealing a common agreement that is a success for the entire network. Moreover, there are different types of Consensus Algorithms which are as follows;
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[Source](https://www.pinterest.com/pin/672866000561520291/)
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√ Proof of Work
√ Proof of Stake
√ Proof of Capacity
√ Proof of Brain
√ Proof of Activity
√ Proof of Importance
√ Leased Proof Of Stake
√ Delegated Proof of Stake
√ Proof of Burn
√ Proof of Elapsed Time
√ Proof of Weight
√ Practical Byzantine Fault Tolerance
√ Simplified Byzantine Fault Tolerance
√ Delegated Byzantine Fault Tolerance
√ Directed Acyclic Graphs
Perhaps in the domain of blockchains and cryptocurrencies, proof-of-work (PoW) and proof-of-stake (PoS) are two of the most prevalent consensus mechanisms.
Let's check out Proof of work and proof of Stake.
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[POW & POS](https://www.reddit.com/r/ethtrader/comments/ogv6hb/a_concise_way_of_explaining_pos_vs_pow_for_all/)
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### Proof of Work
In the domain of blockchain system
Proof of work is the first Blockchain algorithm introduced and it was in Bitcoin. And, nowadays, there are a lot of blockchain technologies making use of this Blockchain consensus category to validate all of their transactions and generate suitable blocks for the network chain.
However, the responsibility jumps upon all miners and they partake in the process known as mining which is used to maintain it. The fundamental principle behind proof of work is to solve complicated mathematical difficulties and to provide solutions.
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[Source](https://www.bitpanda.com/academy/en/lessons/consensus-algorithms-proof-of-work/)
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This technology takes about 10 minutes to build a new block. And examples of cryptocurrencies that make use of this consensus are Bitcoin, Litecoin, etc, which also give the same system.
Nevertheless, the main benefits are that it has Less opportunity for 51% attack and better Security. Also, this technology bid a modest deal of difficulty for the hackers as the network employs a lot of computational power and effort.
Also, no individual nodes called miners can decide on the overall system because decision making is not determined based on the amount of money but is based on how much computational power the mine has to establish new blocks.
On the other hand, All the Consensus algorithms are not excellent; so this blockchain network isn’t that different either. It comes with a lot of flaws and its main issue with the Proof of work consensus algorithm is greater energy (power) consumption and centralization of Miners.
### PROOF OF STAKE
Proof of stake is another consensus algorithm blockchain that deals with the main shortcomings of the proof of work mechanism. Here, every block receives a confirmation before the blockchain network adds another block to the blockchain ledger. So, miners don't put much effort but they join the mining process using their coins to stake.
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[Source](https://www.bitpanda.com/academy/en/lessons/consensus-algorithms-proof-of-stake/)
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The proof of stake is a new kind of concept and does follow the principles of POW. In the PoS, instead of a user spending $1000 or more to purchase mining equipment like supercomputers as in the PoW protocol, here a miner would use up the $1000 to purchase crypto coins. The miner then makes use of these coins as a stake to purchase proportionate block creation opportunities, thereby fitting a validator of the network.
Here, every person can mine or even validate new blocks only depending on the amount of coin they have or possess. This means the more coins you possess, the better your opportunities are to claim more rewards.
##### How does it work
Here, the process is random and all the miners of this technology are randomly selected as well. So, if a user has a certain amount of coins packed previously in your wallet, then you will be allowed to be a node on this network.
Moreover, after being a node, to qualify for being a miner requires you to deposit a specific amount of coin, after that there will be a voting system where validators of the blockchain are selected.
When all these processes are all done, the miners will stake the minimum proportion of the coin required for the special wallet staking.
The process of POS is very simple. Here, new blocks will get built proportionally to the number of coins based on the wallet. For better clarification, if you own 30% of all the coins in the network, then you get to mine 30% of new blocks.
Currently, there are various types of blockchain networks that use a variety of proof of stake consensus algorithms. Well, in the mining process, all of the mechanisms work the same. That's every miner will earn a block reward and will earn a percentage of the transaction fees as well during the mining of a new block.
Remember, this is not the only way, there are other strategies to partake in the staking system. So, if the amount of coin you staked is much, you can join a pool and earn profits. However, you can achieve it either by loaning your coin to another reliable user who will join the pool and then share the income with you or by joining the pool yourself.
Also, Everyone partaking in that particular pool will halve the profit based on the amount of coin staked in the pool. This means Individuals with the highest coins will eventually influence most of the network.
Let's check out the merit and demerit of POS
Remember, this type of consensus model doesn’t need any amount of heavy hardware backup or greater energy (power) consumption. That's this consensus algorithm blockchain is much more power-efficient than POW. Here, you only require a usable computer system and a reliable internet connection.
Another benefit is that any individual who has sufficient coins on the system can also validate transactions. Also, if a user invests in the system, it won’t downgrade over time like other investments do, as such, the only element that will affect the profit is the price fluctuations.
## Why do you think it is important in the blockchain?
The consensus algorithm is a very important concept in blockchain and serves as the primary root of this revolutionary technology and is what makes blockchain consensus sequences different from one another.
In the blockchain environment, the central problem with Byzantine is to attain an agreement. So, if even a single mistake occurs, nodes can’t reach an agreement. On the other hand, Consensus algorithms don’t certainly face this kind of problem. This is to say that the consensus algorithm provides a better standard or roadmap for the blockchain.
> Byzantine Fault Tolerance is a computer system's ability to continue operating even if some of its nodes fail or act maliciously[source](https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/byzantine-fault-tolerance/)
The primary target of the consensus model is to reach a particular motive by any means. The Blockchain consensus algorithm is much more reliable and fault-tolerant than Byzantine.
Another reason why the consensus algorithm is very important in the blockchain is that we won’t see any form of decentralization in the blockchain itself. Well, this is because blockchain doesn’t give a decentralizing environment without consensus algorithms. The consensus model makes sure the blockchain network is fully decentralized. The decentralisation is effective and efficient only when there is a unified agreement in the blockchain.
Honestly, it won’t even matter whether the nodes trust each other or not, they will have to go by distinct principles or laws as well as reach a unified agreement to make the blockchain work effective and efficient.
For better clarification, you can check out all the different Consensus algorithms to get a better view of the whole picture. However, let's check out Proof of Stake.
Proof-of-stake is very important in the blockchain as it enables the blockchain to maintain its integrity. This means without the Proof-of-stake, we can experience a lot of manipulations in the aspect of validating transactions.
However, with the consensus model of POS, the transaction will be validated and verified before it can be added to the block of the list of transactions. The verification is been carried out by the validator. The validator is chosen based on the consensus model of the network, as such, consensus (that's the amount of coin stake) makes the system transparent, reliable and secured.
The consensus model of blockchain helps to protect the integrity, transparency and scalability of transactions as well as create a good room for decentralisation.
## Do you think that the existence of the blockchain would be possible without this concept?
In my viewpoint, I think the Blockchain wouldn't exist without the concept of a consensus algorithm because it is the core part or the root of any Blockchain network.
Generally, we know that blockchain is a distributed decentralized network that delivers the followings immutability, privacy, security, and transparency. But there is no present of central authority to confirm and ascertain the transactions of a blockchain. So, guess what do you think provides the solution to this problem?🤔. Well, it is the consensus algorithm or model that provides it.
This means in the presence of no central authority to validate and verify the transactions in a blockchain, yet every transaction in the blockchain is deemed to be fully secured and validated only because of the existence of the consensus model.
All the peers or nodes of the Blockchain network reach a mutual consensus about the existing government of the distributed ledger to maintain the integrity of the blockchain. In this way, we can say consensus models achieve reliability in the Blockchain system and solidify trust between unknown nodes or peers in a distributed computing domain.
Nevertheless, the consensus model of a blockchain makes sure that every new block that is put into the network is the only version of the validity that is agreed upon by all the peers in the Blockchain. Thus, the purpose of
a consensus algorithm in a blockchain is to find a mutual consensus that is a win for the entire system. So, the consensus is the root or core of a blockchain as such no blockchain can exist without a consensus protocol.
### Is There An Alternative Or Similar Term?
There are several consensus algorithms developed which are used in the blockchain world today and they can serve as an alternative to each other. However, we haven’t found any particular Blockchain algorithms that work for every blockchain technology. So, I think there is a possible alternative approach or scenario to the established consensus algorithm used in the Blockchain network.
Some consensus algorithm has a system that's entirely robust and adds a different structure of flexibility to the whole equation in a blockchain while others are not. So, an alternative is needed in this system.
For example, the alternative or similar term that is related to the proof of Stake (POS) consensus algorithm is proof of work (POW), Proof of Activity ( POA), Proof of Importance (POI), Proof of Capacity (POC)
Proof of Burn (POB), Proof of Weight etc.
Each of them has its Pros and Cons and they have various ways of functioning. For better understanding let's check out the illustration using POW and POS.
In the POW, the amount of work carried out by a specific miner defines their possibility of mining a single block as well as their reward. On the other hand, in the POS, the mining capacity of a particular miner is defined based on how many assets or coins they possessed.
So, we can say in this illustration that the alternative or similar term that is related to the proof of Work (POW) consensus algorithm is proof of Stake (POS). This means in the absence of the proof of Work the Proof of Stake or any of the above-listed consensus algorithms can serve as an alternative.
## Do you think it is possible to improve this term in some way? Explain to us how
The concept of a consensus algorithm in a blockchain has several great types and associates that best suit the regulations of a blockchain. Different blockchain verges to use unique consensus models because of unusual setbacks. Also, not all the consensus algorithms are excellent, though it has a lot of perks, it also accomplishes with a lot of flaws.
So, in my opinion, I would like possible improvement in this area of consensus algorithm [Proof of Stake (POS)] in a blockchain.
In the POS, the miners don't depend on their supercomputers to earn rewards, unlike POW. But, it has a person called a validator who invests their assets.
However, there should be implemented to improve the vulnerability. We can see that a person with sufficient cash to invest can buy an insane amount of tokens thereby lessening the decentralization of the network.
This means there is a rich get richer syndrome that's only the wealthiest users can have control of the consensus and not favourable for lower stakes.
Well, in an attempt to figure out this problem, I think the best approach is to use the strategy of the Delegated Proof of Stake (DPoS). The DPoS is another consensus algorithm that is detected to be an improvement of the proof of Stake (POS).
In the DPoS, the coin holders can use their token and shares it to elect delegates of the system, known as the witnesses. So, the elected witness possesses the chance to stake blocks and adds them to the system. As such, there is better distribution of rewards since individuals only elect delegates who offer them the most rewards.
Also, we can say that power is not bestowed in the hands-on the richest in the blockchain. This means every individual earns and not just the wealthy ones and there is a form of a system of democracy where everyone has something to speak. Thereby, we can say the DPoS is more decentralized than the PoS as well as the PoW.
## CONCLUSION
The consensus algorithm is a crucial ingredient in all blockchains as it enables the blockchain to validate and verify transactions and operations, without the need for a central authority or third party. Also, it is the consensus algorithm that makes the nature aspect of the blockchain systems so versatile and universal.
Of course, there is no single consensus algorithm blockchain that can affirm to be excellent. Well, that is the beauty of the technology as we wait for better consensus algorithms that will be perfect.
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