Consensus mechanisms are a crucial aspect of blockchain technology, allowing network to agree on a single version of the blockchain without a solelying solely on the majority vote. There are several consensus mechanisms used in blockchains, their own strengths and weaknesses. (Pow) and proof of participation (POS), two prominent consensus algorithms.
Proof of Work (POW)
Pow is the most used consensus algorithm on Bitcoin and other cryptocurrencies like Ethereum. Here is a simplified overview:
1.
- The solution is verified by the network :
- Miner is rewarded with new cryptocurrency blocks :
Powy Key Characteristics:
- High Energy Consumption: Minors Need Significant Computing Power, which causes High Electricity Costs.
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- Centralize:
Proof of Stake (POS)
The puzzle, also known as “Proof of Work”, is an algorithm of alternative consensus that has gained popularity in recent years. Here’s How It Works:
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Key Characteristics of Puzzle:
- Lower Energy Consumption: Puzzle Requires Much less computing Power than Pow, which makes it more environmentally friendly.
- Decentralized: the network is decentralized and no single entity controls the result.
- Equity:
Comparison Between Pow and Puzzle
|
Function
|
Pow (Bitcoin) |
Puzzle (Ethereum) |
| — | — | — |
| Energy Consumption Top | Stockings
| Environmental Impact | Criticized | Not as significant |
| Centralization | Centralized Mining Pool | Decentralized Network |
| Equity | Random Selection of Minors Random selection, but with more influence for Big Stakers |
Networks, Environmental Impact, Environmental Impact, Centralization and Fairness. P, Balance Security, Decentralization and Environmental Sustainability.