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Blockchain Consensus Mechanisms Compared


Rob Behnke

October 20th, 2022

For P2P networks without a central or overarching authority, reaching a consensus on the network state presents particular difficulties. Three fundamental issues are at the core of this problem: trust, fault tolerance, and cohesion. A blockchain consensus mechanism is a way for a network of computers to agree on the state of the blockchain. It is the process of verifying and adding transactions to the blockchain, thus overcoming the aforementioned problems. There are numerous consensus mechanisms, each with its own merits and drawbacks. 

We have previously discussed specific mechanisms; in this post, we will provide a broader overview and compare some of the most prominent consensus mechanisms currently employed by blockchain protocols.

Proof of Work (PoW)

Proof of Work is the most well-known consensus mechanism. Bitcoin was the first cryptocurrency to employ PoW, and many other cryptocurrencies still use it today. In a Proof-of-Work system, miners invest compute resources to guess potential nonce values. The miner that creates the block version contained in the version of the chain that is eventually accepted earns a reward. 

PoW is a highly effective consensus process because of its high level of security, but it also has several disadvantages. First, a PoW network requires a substantial amount of energy to operate. This is because miners must utilize sophisticated computers that consume significant electricity making many wrong guesses before finding the right nonce. Moreover, PoW is susceptible to 51% attacks because if a single individual or group controls a majority of the network’s computing power, it can potentially double-spend coins, block new transactions from being confirmed, and even undo previously confirmed transactions. This is because in PoW transaction finality is probabilistic, not guaranteed.

Proof of Stake (PoS)

Introduced by Sunny King and Scott Nadal in 2012, Proof of Stake (PoS) was presented as an alternative to Proof of Work (PoW). To add blocks to the blockchain in a PoS system, miners (known here as validators) are not required to expend energy guessing nonces. They instead stake their coins (i.e., use them as collateral) to acquire the right to add blocks and collect rewards. This approach uses far less energy than PoW because validators do not need to operate powerful computers. 

However, PoS does have some disadvantages. Firstly, it can be difficult for new users to become validators in a PoS network because they must stake a substantial amount of coins. Moreover, just as 51 percent of miners can threaten a PoW network, a super-majority of validators can pose a security risk to PoS systems.

Delegated Proof of Stake (DPoS)

Delegated Proof of Stake (DPoS) is an iteration of the classic Proof of Stake (PoS) mechanism. In a DPoS system, stakers often delegate stakes to validators who validate blocks on their behalf. Since just a limited number of validators are responsible for validating blocks, the primary benefit of this system is that it allows for a more inclusive and democratic process. 

DPoS systems are typically more decentralized than regular PoS systems because anybody can become a delegator if they contribute to existing validator pools. Nonetheless, DPoS systems have some disadvantages. First, they are susceptible to delegator collusion, as delegators may collude to seize control of the network. In addition, DPoS systems may suffer from poor voter turnout. PoW miners and PoS validators invest significant compute resources and funds; as such, they have an incentive to be highly available. In contrast, DPoS delegators commit significantly fewer resources and may not bother to vote on governance proposals if they do not feel strongly incentivized to participate.

Proof of History (PoH)

Proof-of-history (PoH) consensus mechanisms verify the chronological order of events. The Solana Foundation first proposed the PoH consensus mechanism in 2017. In a PoH-based system, each node maintains a record of all events that have occurred up to that point. To add a new event to the chain, a node must first provide proof that it knows the history hash. Other nodes in the network can verify this proof, and if it is valid, the new event is added to the chain. 

PoH consensus mechanisms are ideally suited for high-throughput dApps, such as payment and trading platforms. However, like other systems discussed, this mechanism also has significant drawbacks. To validate transactions in a PoH system, validator hardware must meet stringent requirements, which limits the overall accessibility of validation. Additionally, the exceptionally high throughput enabled by this method potentially creates data storage issues due to the high amount of data churned out by the network.

Blockchain Consensus Mechanisms and Security

While each variant for achieving consensus in blockchains has its benefits and drawbacks, a high level of security is a core issue that various mechanisms strive to achieve. Proof of Work (PoW) systems are often considered relatively secure but are energy-guzzling. PoS and DPoS systems are less energy-intensive but have their unique vulnerabilities. 

The surest way to access blockchain security is via regular security auditing and white hat pen testing. If you are interested in enhancing your network security, contact our Web3 security experts at