What Are Blockchain Consensus Algorithms?

What Are Blockchain Consensus Algorithms?

 Consensus Defined

The consensus is said to be a fault-tolerant mechanism that’s utilized in computer and blockchain systems to realize the required agreement on one data value or one state of the network among distributed processes or multi-agent systems.


First, we must acknowledge that the blockchain consensus mechanism is vastly different than a central computing system consensus mechanism. The latter features a limited number of users that are liable for administrating tasks, like adding or deleting records. The individuals that generated the central system allocate administrative responsibilities to others as they see fit. In blockchain, there’s also a creator of the system, however, the creator doesn’t allocate administrative responsibility. These responsibilities are left to independent individuals (or nodes) who have the computing power necessary to validate, monitor, and store records of the whole system (hence the decentralized aspect of blockchain). Since the records contained in blockchain contains validated currency transactions between wallets, nodes are directly liable for verifying and storing all transactions. you’ll be wondering why anyone would chose to possess the burden of administrative duties. There are incentives to make a node, holding records, and verifying transactions during a blockchain system. The incentives are embedded within the two consensus mechanisms discussed below.

 The Proof of Work Consensus (PoW)

The PoW consensus mechanism is used currently by both Ethereum and Bitcoin. PoW gives individuals with native tokens (Ether or Bitcoin) for mining activities. Mining is that the practice of solving block equations to verify various transactions. the method involves an immense amount of computing power. Individuals who participate in mining activities are rewarded with cryptocurrency on each occasion that they verify a replacement block. The quickest individual to unravel each block (most likely the one with the very best level of computing power) is granted the reward. To verify a replacement block, each node within the network most store all previous blocks within the chain. The PoW mechanism is much inefficient and time consuming. Currently, the Ethereum blockchain processes about 15–30 transactions per second. This keeps several issues to decentralized applications, like Bethereum, that believe transaction speed for platform efficiency. The PoW mechanism also presents a scaling dilemma. Since each node must store the whole blockchain to verify transactions, there’ll be some extent in time when the chain becomes overlarge for smaller nodes to store all blocks, thus the system risks becoming controlled by a couple of large nodes. The Ethereum team is trying to solve these challenges through a change in consensus mechanisms and an implementation of a scalability protocol.

The Proof of Stake Consensus (PoS)

The Ethereum team is in search of  a switch from PoW to PoS. The PoS mechanism is analogous to PoW therein both methods provide similar cryptocurrency incentives to nodes that verify and store transactions, but there are still vast differences. While PoW depends on computing power to mine blocks, PoS depends on a node’s stake (typically the quantity of currency a user holds) within the system. The more stake a user controls, the more authority they need over validation. for instance , within the Ethereum update, a group of validators alternate proposing and voting on subsequent block. the load of every validator’s vote depends on the dimensions of their stake (the amount of Ether held). Typically during a PoS protocol, nodes are awarded tokens either on the quantity of stake held (in dividend format) and/or by validating transactions. The PoS system is far safer and energy efficient than PoW. Since each node is allocated voting weight before block validation occurs, there’s not an abundance of nodes competing to unravel one block. Additionally, PoS encourages trustworthy actions, as all nodes contain a stake (currency) within the blockchain. A nodal assualt on the chain will only cause financial harm (decrease in currency price) to the users operating the nodes.

Practical Byzantine Fault Tolerance(pBFT)

Practical Byzantine Fault Tolerance may be a consensus algorithm introduced within the late 90s by Barbara Liskov and Miguel Castro. This was designed to figure efficiently in asynchronous(no boundary on when the response to the request are going to be received) systems. it’s optimized for low overhead time. Its goal was to unravel many problems related to already available Byzantine Fault Tolerance solutions. Application areas include distributed computing and blockchain.

What is Byzantine Fault Tolerance?

Byzantine Fault Tolerance(BFT) is that the feature of a distributed network to succeed in consensus(agreement on an equivalent value) even when a number of the nodes within the network fail to reply or respond with misinformation .The main goal of a BFT mechanism is to safeguard against the system failures by employing collective decision making(both – correct and faulty nodes) which aims to scale back to influence of the faulty nodes. BFT springs from Byzantine Generals’ Problem.

Delegated Proof of Stake

Delegated Proof of Stake (DPoS) consensus algorithm is developed by different as a more useful and democratic version of the preceding PoS mechanism.

The both PoS and DPoS are used as an alternate to the Proof of labor consensus algorithm, since a PoW system requires, by design, many external resources. The Proof of labor algorithm makes use of an outsized amount of computational add order to secure an immutable, decentralized and transparent distributed ledger. The PoS and DPoS require fewer resources and are, by design, more sustainable and eco-friendly contrarily. to know how Delegated Proof of Stake works, one must first grasp the fundamentals of the Proof of labor and Proof of Stake algorithms that preceded it.


The Ripple is consensus algorithm. It utilizes collectively trusted sub networks within the larger net work. Nodes are divided into two types in the net work.

  1. Server for participating consensus process and
  2. Client for only transferring funds

Each server has an unique node list (UNL).The server would query the nodes in UNL and if the received agreements have reached 80% the transaction would be packed into the ledger to put a transaction into the ledger.  The ledger will remain correct as long as the percentage of faulty nodes in UNL is < 20%.


This is a software for securely and consistently replicating an application on many machines. We mean that Tendermint does work albeit up to 1/3 of machines fail in arbitrary ways. By consistently, we mean that each non-faulty machine sees an equivalent transaction log and computes an equivalent state. The secure and consistent replication can be a basic problem in distributed systems; it plays a critical role within the fault tolerance of a broad range of applications, from currencies, to elections, to infrastructure orchestration, and beyond.

The ability to tolerate machines failing in arbitrary ways, including becoming malicious, is understood as Byzantine fault tolerance (BFT). The Blockchain technology is a re-formalization of BFT in a more modern era, with focus on peer-to-peer networking and cryptographic authentication. The name derives from the way transactions are batched in blocks, where each block contains a cryptographic hash of the previous one, forming a sequence . In practice, the blockchain arrangement actually optimizes BFT design.

Mansoor Ahmed is Chemical Engineer, web developer, a writer currently living in Pakistan. My interests range from technology to web development. I am also interested in programming, writing, and reading.
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