Proof of Work | Proof of Stake | Effective Proof of Stake | Other Proofs

Proof of Work (POW)

The most well known and original cryptocurrency in the world is Bitcoin. Bitcoin cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto.

Proof of Stake (POS)

The main technical mechanism that powers staking is something called Proof of Stake (PoS). This is an evolution of Proof of Work (PoW), a key component that allows blockchains to function as they do. PoS was introduced as a solution for reducing the computational power required to validate blocks. while maintaining the core value of cryptocurrency — decentralisation.

Effective Proof of Stake (ePOS)

To address the challenges of POS / POW, there is a modular version of PoS-based blockchain systems called ePOS that resists the centralisation of network resources by extending mining opportunities to a wider set of stakeholders.

Whats Else?

I have touched upon the 3 most popular Proofs currently available but there are other consensuses out there. I will summarise some of these below and I am sure new ones and combinations will emerge before this article is published!

Proof of Capacity

In Proof of Capacity method, solutions to complex mathematical puzzles are stored in digital storages such as hard disks. This entire process is called plotting. After a storage device is filled with solutions for mathematical puzzles, users can utilize it for producing blocks. Users who are fastest in finding the solutions get a chance to create a new block. Hence, users with the highest storage capacity will have to higher chances of producing a new block.

Proof of Elapsed Time

Proof of Elapsed Time process randomly and fairly decides the producer of a new block based on the time they have spent waiting. For this purpose, the mechanism provides a random wait time for each user and the user whose wait time finishes the earliest will produce a new block. This consensus mechanism only works if the system can verify that no users can run multiple nodes and the wait time is truly random.

Proof of Identity

Proof of Identity compares the private key of a user with an authorized identity. Basically, Proof of Identity is a piece of cryptographic evidence for a user’s private key that is cryptographically attached to a specific transaction. Any identified user from a blockchain network can create a block of data that can be presented to anyone in the network. Proof of Identity ensures integrity and authenticity of created data. Additionally, smart cities can use blockchain consensus mechanisms like Proof of Identity to verify the identity of their citizens.

Proof of Authority

Proof of Authority mechanism is a modified version of Proof of Stake where the identities of validators in the network are at stake. In this scenario, the identity is the correspondence between validators’ personal identification and their official documentation to help verify their identity. These validators stake their reputation on the network. In Proof of Authority, the nodes that become validators are the only ones allowed to produce new blocks. Validators whose identity is at stake are incentivized to secure and preserve the blockchain network. Also, the number of validators is fairly small (i.e. 25 or less).

Proof of Activity

Proof of Activity mechanism is the combination of Proof of Work and Proof of Stake. In Proof of Activity, miners try to find the solution to a puzzle and claim their reward. However, the blocks created in Proof of Activity mechanism are simple templates with mining reward address and header information. The header information is then used to choose a random group of validators for signing a block. The validators with larger stakes will have greater odds of being selected to sign a new block. Once the selected validators sign a new block, it becomes a part of the network. In case the block stays unsigned by some validators, it gets discarded and a new block is utilized. The network fees generated in the process are distributed between the winning miner and the validators.

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Maffaz.ONE | Validator

Maffaz.ONE | Validator

IT Professional :: Decentralised eEnthusiast :: Harmony ONE :: https://maffaz.one