As you all know, Blockchain is a highly developed core technology, plus it is also the foundation for many other cryptocurrencies. One of the factors that helped develop this technology are consensus algorithms. It is like a weapon to help the Blockchain network avoid errors and support security. Like this Consent What is Blockchain? What are the characteristics of the Blockchain Consensus Algorithm? Let’s go to the following article to find out more.
Consent What is Blockchain?
With the traditional structure, it is thanks to central authorities that consent is not a problem to be solved often. But for blockchain which is a distributed system it is the other way around. Each intersection acts as both a server and a place to store data. Therefore, this intersection must exchange data with other intersections to create consensus. This has led to the emergence of blockchain consensus algorithms.
Consensus Blockchain is intended as a mechanism for distributed nodes, all of which reach consensus in the system.
How does the consensus algorithm work?
In a centralized market, all matters are managed and information is centralized by a central authority or authority. But for Blockchain it is a decentralized system, spread all over the world. Blockchain gathers many participants from all over the world and above all there is no central authority management.
And alternatively, there is Blockchain that verifies transactions and miners create new blocks on the network. Let things happen transparently, accurately, and convincingly. The consensus algorithm is born. Helps operations run more safely and accurately.
Distinguish between consensus algorithm (Consensus) and protocol (Protocol)
Usually, the two terms consensus algorithm (Consensus) and protocol (Protocol) are still used to complement each other in practice. However, their meanings are not exactly the same. In essence, the protocol can be understood as the basic rules of the Blockchain network. The consensus algorithm is defined as the mechanism by which the rules of the protocol must be followed.
So far Blockchain has been applied to many different fields, or systems like finance, banking, etc. And even though Blockchain can be applied to any field, it will also be built on a protocol. The system will have a way of working based on the built protocol. In short, this is why the other parts of the system or those who participate in it are obliged to follow the rules of the protocol.
Furthermore, it must rely on the presence of a consensus algorithm to help the system follow the steps to ensure compliance with the rules. From there you will get the results that the creators have come to expect.
A simple easily understandable example like Bitcoin, Ethereum will be the protocol and the consensus algorithm will be PoW and PoS, when the Blockchain is validating the transaction with the block.
Types of Consensus Algorithms Blockchain
Proof of Work and Proof of Stake PoS are considered to be two important and popular consensus algorithms. And here I will give you information on these two types of algorithms.
PoW proof of work
Proof of Work or Proof of Work (PoW) is considered to be the first consensus created among consensus algorithms. It plays a vital role in helping the miners extract tokens. Proof of work is applied to many different currencies, including Bitcoin.
Only one new block is generated for each round of consent. By solving difficult algorithms, the intersection trying to hash first and resolve successfully generates a new block. And PoW will help to choose this valid intersection. Solving the algorithms is extremely difficult and requires the hash to be knowledgeable and technically qualified to satisfy it in order to be able to create a successful block.
When consent is received from the distributed nodes, new transaction blocks are accepted to be added to the Blockchain network. Proof of work here means that the hash provided by the miners is valid and serves as valid proof of obtaining consent from the distributed nodes.
Additionally, PoW helps the Blockchain network resist major attacks, typically a 51% attack. In addition to the contribution of decentralization, PoW plays an important role in helping secure Blockchain.
Proof of Stake PoS
Following the work test, in the following years in particular the Proof of Stake or Proof of Stake (PoS) was born. PoS is considered a perfect replacement for PoW, when it has outstanding new advantages and overcomes the previous disadvantages of PoW.
Instead of PoW, miners are rewarded based on their ability or ability to solve algorithms. So for PoS, it will be replaced by the participation relationship. That is, for PoS participants they can choose the crossing and this depends on their stake ratio. And these intersections have the added benefit that you don’t need to adjust the nonce as many times as PoW. The answer to the solution depends on the percentage of bets placed by the participants.
The miner selected must meet many criteria, but in general the biggest criterion is the value this miner brings to the entire Blockchain network. Specifically, miners have to bet their coins on transactions. And that’s exactly what your cryptocurrencies are and then you lock them up. Subsequently, based on the criteria PoS will choose the most suitable miner. The criteria here can be how much you bet in proportion to the whole net amount, or how long your block time is, etc.
But in general, most of you will become the right miner that PoS chooses or not depends a lot on the number of odds you bet against the entire network.
Answer to the question: why is the consensus algorithm so important
The consensus algorithm is not only meant for the Blockchain network, it also involves the creation of value for the cryptocurrencies in the network.
As a digital-based economic system, Blockchain requires a consensus algorithm to achieve consensus among distributed nodes. Furthermore, as mentioned, the consensus algorithm also helps the Blockchain network to resist errors such as the Byzantine ones and to ensure its security.
Consensus Blockchain plays an important and decisive role in Blockchain technology. Create solid value and ensure network security. Through this article, you must have had an overview of the Blockchain Consensus Algorithm, as well as answered the questions asked at the beginning of the article. I hope this article is really useful to you. Good luck to you and see you in the next post.