Blockchain Consensus Mechanisms You Should Be Aware Of

date_range June 21, 2022
person Magic Square

Blockchain networks are notable for their use of existing blockchain consensus mechanisms. However, different outcomes are desired for different applications, and blockchain networks do not always use the same consensus mechanism.

When blockchain developer organizations select a consensus mechanism, they make well-informed decisions. Let’s look into eight types. Here are the first four.

Proof of Work, Stake, Capacity, and Delegated Proof of Stake

The Proof of Work” process is also known as mining, and the miners are called nodes. Miners can solve complex mathematical puzzles that require a significant amount of computational power. For this purpose, miners use mining methods such as GPU, CPU, FPGA mining pools, and many others. Miners receive a block as a gift for solving heavy mathematical puzzles if they are the first people to find answers, and this is their actual proof of work.

On the other hand, “Proof of Stake employs a randomized process to determine who is most eligible to produce the next block in the chain. Users will be able to generate blocks once they have become validators. And in most cases, validators receive a portion or all of the transaction fees. The Proof of Stake method incentivizes validators to maintain the blockchain network smoothly.

When we talk about the “Delegated Proof of Stake” process, we’re talking about users staking coins and voting for a specific amount of delegates. The delegate who receives the most votes will be able to create new blocks. However, like other blockchain consensus mechanisms such as Proof of Stake, all representatives are rewarded with a specific amount of coins or transaction fees. DPOS is widely regarded as the fastest blockchain consensus mechanism, and it is referred to as digital democracy.

In the “Proof of Capacity” method, solutions to complex mathematical puzzles are kept in digital storage such as large hard disks. This entire process is known as plotting, and it occurs after a storage device is filled with mathematical puzzle solutions, and users can use it to generate blocks. Users who solve the problems the quickest will be allowed to create new blocks, and the ones who have the most storage capacity, on the other hand, will have a significantly greater chance of making new ones.

Proof of Elapsed Time, Identity, Authority, and Activity

The “Proof of Elapsed Time” consensus mechanism determines the developer of a new block fairly and randomly based on their waiting time. For this reason, the mechanism assigns each user a random wait time. The user whose waiting time expired – first produces a new block. The above consensus mechanism will work only if the system can verify that there are no users running network nodes and that the waiting period is random.

Proof of Identity” compares a user’s private key to an authorized identity. It is essentially a piece of cryptographic proof for a user’s private key that is cryptographically associated with a specific payment. Some of those identified users in a blockchain network can generate a data block to display to anyone else in the network. Proof of Identity ensures the data’s integrity and authenticity. 

The Proof of Authority” mechanism is a refined version of Proof of Stake where validators’ identities in the network are staked. Therefore, in a scenario, the correspondence between the validators’ identification and their documents is essential—this aids in verifying their own identity. The network’s reputation for these validators is on the line. Validators with staked identities are incentivized to shield and secure the blockchain network. Here, the number of validators is relatively small.

Proof of Activity” is a hybrid of the Proof of Work and Proof of Stake mechanisms. It is a competition in which miners compete to solve a puzzle and claim their reward. The Proof of Activity blocks, on the other hand, are simple templates containing the mining reward address and header information. The header data is then used to choose a group of validators to sign a block randomly. Here, validators with higher stakes are more likely to be selected to sign a new block. A new block is added to the network when the chosen validators sign it. If some validators determine that the block is unsigned, this is discarded, and a new block has been used.


Business leaders who want to implement blockchain technology in their company must be well-versed in the various blockchain consensus mechanisms. Despite having similar goals, different blockchain consensus mechanisms achieve consensus differently.

There is no single consensus mechanism to rule them all so-to-speak, but existing ones have evolved to meet various needs of the blockchain community.

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