Blockchain Consensus Algorithms

Blockchain development has transformed multiple industries and is now unstoppable. The distributed decentralized network of Blockchain provides immutability, privacy, security, and transparency. Also, there is no involvement of a central authority to verify and validate the transaction, which makes every transaction completely secured and verified. It is possible due to the presence of a consensus algorithm protocol that acts as an integral part of any blockchain.

What is Consensus Algorithm?

The Consensus Algorithm is a system used to validate the transaction authenticity and maintain underlying blockchain security. It is for the cryptocurrencies like Bitcoin and Ethereum. Also, the system ensures the recording of all legitimate transactions is on the blockchain. Each copy of the blockchain incorporates all valid transactions.

Why Is the Consensus Algorithm Important?

With the use of a consensus algorithm, every cryptocurrency blockchain operates. Also, to agree on the legitimacy of transactions, then it is a system that blockchain network user follows. The transaction records are on the blockchain, once there is a validation of the transaction.

Pros and Cons of Consensus Algorithm

The enclosing of the consensus algorithm is the next block to be the blockchain. It also secures the blockchain network from wrong rogue nodes interfering, tampering, or hindering. Also, we can say a consensus algorithm is the backbone of blockchain, but everything has its Pros and Cons. Let’s take a look.

Pros

Forms agreement foundational to the crypto-market

Build a secure environment

Anyone can participate

Cons

Maybe energy-intensive

Potential for attacks

Impact of Consensus Algorithm on Throughput

Throughput is the consensus algorithm that determines the security level, transaction speed, and network scalability. Also, permissionless blockchain proof-of-work (PoW), and proof-of-stake (PoS) are the most commonly used consensus algorithms. Also, for the enterprise blockchain, the Crash Fault Tolerant protocol is being used and comes with its own set of challenges.

Crash Fault Tolerant

Byzantine Fault Tolerance

Solution for Throughput

Following considerable examination of existing blockchain solutions, we designed an enterprise blockchain solution to address drawbacks like scalability, throughput, and security. We develop fastBTF to overcome the vulnerabilities and limitations of other blockchains by focusing on three sectors.

Limitation of Consensus algorithms

Proof-of-work (PoW)

Proof-of-stake (PoS)

DPoS

Which one should you choose?

The fact tells that no single consensus protocol that works for all. It depends upon several factors like blockchain type, project scale, performance requirement, token, application type, and more to choose the right algorithm.

Conclusion

The goal of all these consensus algorithms is to become a decentralized network. Although, even after a shared goal, these algorithms are diverse in approach. There is much more to come in consensus algorithm because the ideal consensus doesn’t exist yet.

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