CONSENSUS

CONSENSUS
Consensus is a process of achieving agreement between distrusting nodes on the final state of
data. To achieve consensus, different algorithms are used.

It is easy to reach an agreement between two nodes (in client-server systems, for example), but
when multiple nodes are participating in a distributed system and they need to agree on a
single value, it becomes quite a challenge to achieve consensus.

Consensus mechanism
A consensus mechanism is a set of steps that are taken by most or all nodes in a blockchain to
agree on a proposed state or value.

Consensus is the process by which a group of peers – or nodes – on a network determine which
blockchain transactions are valid and which are not. Consensus mechanisms are the methodologies
used to achieve this agreement.
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The following describes these requirements:

• Agreement: All honest nodes decide on the same value.

• Integrity: This is a requirement that no node can make the decision more than once in a single
consensus cycle.

• Validity: The value agreed upon by all honest nodes must be the same as the initial value
proposed by at least one honest node.

• Fault tolerant: The consensus algorithm should be able to run correctly in the presence of faulty
or malicious nodes (Byzantine nodes).

• Termination: All honest nodes terminate the execution of the consensus process and eventually
reach a decision.
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Types of consensus mechanisms

All consensus mechanisms are developed to deal with faults in a distributed system and to allow
distributed systems to reach a final state of agreement.

These common types of consensus mechanisms are as follows:

• Proof-based consensus mechanisms: The algorithm works on the principle of providing

proof of some work and the possession of some authority or tokens to win the right of
proposing the next block.

• Traditional fault tolerance-based: this type of consensus mechanism relies on a simple

scheme of nodes that publish and verify signed messages in a number of phases.
Eventually, when a certain number of messages are received over a period of rounds
(phases), then an agreement is reached.
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In general, there are two types of faults that a node can experience:

• Fail-stop faults

Node Crash

Solution: Paxos or the RAFT protocol

• Byzantine faults:

Malicious behavior of node

Attacks: a software bug, or data corruption

Solution :SMR protocols such as Practical Byzantine Fault Tolerance (PBFT)

CONSENSUS in Blockchain
Following describes the two main categories of consensus mechanisms:

 Proof-based, leader-election lottery-based, or the Nakamoto consensus

• Whereby a leader is elected at random (using an algorithm) and proposes a final value.
• This category is also referred to as the fully decentralized or permissionless type of
consensus mechanism.
• This type is well used in the Bitcoin and Ethereum blockchain in the form of a PoW
mechanism.

 Byzantine fault tolerance (BFT)-based

• More traditional approach based on rounds of votes.

• This class of consensus is also known as the consortium or permissioned type of
consensus mechanism.
CONSENSUS in Blockchain
• Proof of Work (PoW)
• Proof of Stake (PoS)
• Delegated Proof of Stake (DPoS)
• Proof of Elapsed Time (PoET)
• Proof of Deposit (PoD)
• Proof of Importance (PoI)
• Federated consensus or federated Byzantine consensus
• Reputation-based mechanisms
• Practical Byzantine Fault Tolerance (PBFT)
• Proof of Activity (PoA)
• Proof of Capacity (PoC)
• Proof of Storage
• Proof of Authority (PoA)
 Proof of Work (PoW) • relies on proof that adequate computational resources have been
spent before proposing a value for acceptance by the network.
• used in Bitcoin, Litecoin, and other cryptocurrency blockchains
• successful against any collusion attacks on a blockchain network,
such as the Sybil attack.

 Proof of Stake (PoS)

• first introduced by Peercoin, and it is going to be used in the
Ethereum blockchain version called Serenity.
• PoS is based on a selection process that takes into account the validators’
stake.
• The selection process allows the network to choose the node that will
validate the new block by proving its ownership of an amount of coins
using the “coin age” metric.
• which is a criterion derived from the amount of time and number of
coins that have not been spent.
• In this model, the chances of proposing and signing the next
block increase with the coin age.
 Delegated Proof of Stake (DPoS) • Whereby each node that has a stake in the system can
delegate the validation of a transaction to other nodes
by voting.
• It is used in the BitShares blockchain.

 Proof of Elapsed Time (PoET)

• Introduced by Intel in 2016,
• PoET uses a Trusted Execution Environment (TEE) to
provide randomness and safety in the leaderelection
process via a guaranteed wait time.
• PoET follows a lottery system that spreads the chances of
winning equally across network participants, giving every
node the same chance.

 Proof of Deposit (PoD) • nodes that wish to participate in the network have to
make a security deposit before they can mine and
propose blocks.
• used in the Tendermint blockchain.
 Proof of Importance (PoI) • monitors the usage and movement of tokens by the user
in order to establish a level of trust and importance.
• used in the NEM coin blockchain.
 Federated consensus or
federated Byzantine • Nodes in this protocol retain a group of publicly-trusted peers
consensus and propagate only those transactions that have been
validated by the majority of trusted nodes

 Reputation-based mechanisms • As the name suggests, a leader is elected by the reputation it

has built over time on the network.
• It is based on the votes of other members.

 Proof of Activity (PoA) • combination of PoS and PoW,

• PoW is used only in the first stage of the mechanism; after the
first stage, it switches to PoS, which consumes negligible
energy.
  Proof of Capacity • This scheme uses hard disk space as a resource to mine the blocks.
(PoC) This is different from PoW, where CPU resources are used.
• In PoC, hard disk space is utilized for mining and, as such, is also
known as hard drive mining.
• This concept was first introduced in the BurstCoin cryptocurrency.
• During this process, the miner generates plots (files) storing a large
number of hashes that are computed in advance using different nonces.
• These hashes can then be reused in the mining process.

• This scheme utilizes the identity of the participants called

validators as a stake on the network.
 Proof of Authority
• Validators are known and have the authority to propose new
(PoA)
blocks.
• Validators propose the new blocks and validate them as per
blockchain rules.
• PoA is based on identity and reputation as a stake.
• Commonly used PoA algorithms are Clique and Aura.