Blockchain Consensus Protocol

Blockchain Consensus Protocol


Consensus plays an important role when using blockchain. This mechanism ensures guaranteed data integrity in a decentralized network for all participants. This applies to public and private blockchains.

Consensus is the central element of the blockchain, and all modern technologies, such as PoS, PoW and DPoS, have their advantages and disadvantages.

The consensus procedure used plays an important role. Private and public blockchains use consensus to ensure the security and integrity of data on all nodes. It ensures the integrity of the blocks and their uniform synchronization in the network.

The biggest difference between a public and a private blockchain depends on who is allowed to participate in the network, execute the consensus protocol and manage the shared registry. The public blockchain network is completely open. Anyone can join the network and participate in it.

Bitcoin is a vivid example of a public blockchain network. In private blockchain networks, administrators must decide which consensus mechanism to use. On, hundreds of projects that use blockchains with various consensuses are listed.

Consensus mechanisms are an integral part of blockchains when it comes to the stable and secure operation of a decentralized unified database. Since there is no central control, the nodes must ensure that the data in the block chain is verified. The consensus mechanism takes on this task through various nodes, that is, network participants. It ensures that all transactions are valid, and are synchronized on all nodes of the network.

Consensus consists of an algorithm and a protocol. The protocol defines the rules, and the algorithm implements them. Thus, the blockchain creates a reliable system that practically eliminates manipulation, but the question of how decisions should ultimately be made remains open.

Since the consensus mechanism is central to the block chain, all transactions must be constantly verified. Without a working consensus mechanism, the blockchain will be subject to a large number of hacker attacks.

Depending on the applications and the desired results, blockchain networks use different consensus mechanisms. The main types of blockchain consensus mechanism are presented below.

Proof of Work-classic

The most famous algorithm is Proof of Work (PoW), which is used, for example, in the Bitcoin network. Other blockchains, such as Ethereum, also use PoW. This process has been used for many years and has proven to be very reliable. To achieve consensus, PoW uses proofs of the solution of a complex problem.

For example, this is the calculation of a new block in the Bitcoin network. Usually, with such a consensus, the nodes with the highest performance win, because they perform calculations faster than slower nodes. As a result, PoW requires a lot of calculations and energy, but it is reliable.

PoW has also proven its stability with fast-growing blockchains such as Bitcoin. Since this largely depends on the computing power of the nodes, the consumption of resources and energy increases accordingly. For this reason, more and more networks want to rely on more modern systems that are less resource-intensive and energy-intensive.

Proof-of-Stake Consensus

The new Proof-of-Stake consensus procedure is clearly visible on the example of Ethereum 2.0-energy saving. Ethereum changes the consensus procedure in the new version 2.0. Instead of Proof-of-Work (PoW), it will use Proof-of-Stake (PoS).

This consensus procedure is also several years old, and it uses a strategy that is different from the POW of the node used. PoS was designed to replace the energy-intensive PoW.

The hardware requirements and power consumption of PoS are lower than that of PoW. In addition, there is a faster synchronization between the nodes. This is due to different approaches. These are not the fastest nodes that check for new blocks, instead there is a random failure along with node weighting.

In the case of proof of work (PoW), the miner who first completes the calculation of the next block receives a “reward”. So the fastest nodes will be rewarded. The proof of the share works differently in this case. Here, the corresponding miner is randomly selected from the pool of node operators. Node operators must have a specified minimum number of coins / tokens available in the wallet. The share (number) of a node in tokens / coins in the network is crucial.

PoS uses, among other things, weighting based on the duration of participation in the network and the number of tokens / coins of the node, together with a random selection.

PoS does not depend on mining, which is the main element of consensus in PoW, so it requires less hardware resources and, therefore, less energy. It is enough to use mobile applications such as SpaceBot.

Basically, PoS uses random selection, with which nodes are selected to check the next block. The decisive factor here is the user’s bid, that is, the number of tokens.

Simply put, nodes with a large number of tokens / coins have a high chance of being selected by the validator.

Delegated Proof-of-Stake Consensus

In addition to PoW and PoS, Delegated Proof-of-Stake (DPoS) is often used as a consensus. In fact, DPoS acts as a PoS. Thus, the role is played not by computing power, but by coins or tokens to achieve consensus. DPoS does not authorize the nodes with the largest number of coins to confirm the transaction, but the nodes choose a delegate for this.

Thus, it does not determine the number of tokens / coins in the network along with a random selection that checks the blocks, but there is also a selection of different nodes. The system in the blockchain is generally more democratic than PoS, and at the same time more energy-saving than PoW.

An example of this is DEL, the peer-to-peer currency of the DecimalChain blockchain, which is a token constructor.

While with PoS, as a rule, each node has the right to check new blocks, depending on the number of tokens in the wallet, nodes with DPoS receive only one voting right. Several nodes vote for a delegate, who then checks for new blocks.

The Delegated Proof Of Stake protocol is also much more efficient at processing transactions than any of the above protocols. Blockchains using the Delegated Proof Of Stake protocol have no problems with processing all received transactions, regardless of their size.

Thus, the mechanism of delegated confirmation of the share is one of the fastest consensus mechanisms in the block chain. This is due to the fact that it can process a larger number of transactions compared to the proof-of-work mechanism. Due to the rate-weighted voting system, DPOS is often seen as a kind of digital democracy.

Consensus for a Private Blockchain

The open source Hyperledger Iroha platform offers the ability to easily create a distributed registry in the form of an “Authorized Registry”. By all accounts, Hyperledger Iroha relies on yet another consensus (YAC). This is the Delegated Byzantine Fault Tolerance (dBFT) algorithm.

If a large number of nodes fail, one Iroha project can continue working, while other consensus systems will no longer work. Unlike PoW and PoS, Delegated Byzantine Fault Tolerance (dBFT) allows you to quickly identify unreliable and unwanted blockchain participants.

This is important when used in private blockchains, since hacker attacks are more promising here than with large public blockchains. After the final confirmation of the dBFT, the transaction cannot be canceled or rolled back if it is configured accordingly.


Although these different consensus mechanisms have similar goals, they use different approaches to ensure security. In addition, there are other consensus mechanisms, such as confirmation of capabilities, confirmation of identity, confirmation of authority or confirmation of activity.

Currently, there is no single optimal consensus mechanism, but those that have been tried and tested so far will continue to evolve over time to better meet the requirements of blockchain technology.

Since the underlying technology is still relatively young, the forecast of which type of blockchain consensus mechanism will prevail and will be useful in the long term can only be vague. For this reason, decision makers who are considering the possibility of implementing blockchain technology in their organization should be well aware of the various mechanisms of blockchain consensus.