Distributed consensus ensures data integrity and consensus on a proposal across nodes in distributed systems. Public and decentralized, blockchain networks are created as distributed systems. Because they are decentralized, distributed nodes need to agree with each other about the validity of transactions.
Distributed consensus is essential for maintaining a network in a decentralized manner. While consensus between parties is easy to achieve, it becomes more difficult as the number of parties grows. For the parties to coordinate on a common goal, all nodes on the network must agree on a "single source of truth" (SSOT). If even one of the other nodes in the network fails, the accuracy of all information must be ensured.
All nodes in the network must have a copy of the ledger. There must also be an agreement that the ledger stored by the nodes is up-to-date and correct. For this, blockchain networks make use of distributed consensus algorithms.
For instance, the Bitcoin blockchain network uses the Proof of Work consensus developed by Satoshi Nakamoto. There are also many other consensus mechanisms, such as Proof of Stake (PoS), Proof of Burn (PoB), and Proof of Authority (PoA).
Distributed consensuses have the same characteristics. Distributed consensus mechanisms (currency, processing power, etc.) are based on a stake. The verification process of transactions involves mining and a reward.
The features of Distributed Consensus can be listed as follows:
- Provides reliability and fault tolerance in distributed structures.
- Ensures that correct transactions are accepted, even if there are wrong people.
How to Achieve Distributed Consensus?
There are some factors that need to be followed to build distributed consensus. These factors are:
- Termination
- Agreement
- Integrity
Termination
Error-free processes need to decide on a value.
Agreement
The validated processes must have a final decision.
Integrity
All error-free processes must start and end with the same value.
What Is Consensus?
Consensus is also known as a consensus algorithm. Consensus is an algorithm that ensures consensus in a system. Some of the most common consensus algorithms in blockchain networks are Proof of Work, Proof of Stake, Proof of Burn, Proof of History, and Proof of Authority.
Consensus mechanisms represent decisions agreed upon by the community to sustain a system or group. Consensus is used to gather the community towards a common goal. At the same time, consensus ensures that all network participants are equal. Consensus mechanisms are known for playing a critical role in blockchain networks. Consensus ensures the security of transactions between parties.
What Are the Types of Consensus?
There are multiple consensus algorithms and each has different features. One of the widest consensus mechanisms is Proof of Work or PoW for short. Pow is also used by well-known networks such as Bitcoin and Litecoin. A node in the network needs to prove itself to add new transactions to the blockchain network. Pow is one of the most secure consensus structures but has high energy consumption and a long processing time.
As an alternative to the PoW mechanism, Proof of Stake was introduced in 2012. Proof of Stake (PoS) is a system that focuses on digital asset ownership rather than computational power. In the PoS mechanism, people who want to verify transactions and gain a stake in them stake their cryptocurrencies. The cryptocurrency held in a digital wallet is locked and the locked amount cannot be exchanged or withdrawn until this process is over. In networks with the PoS mechanism, users share block rewards and transfer fees in proportion to their stake. The first cryptocurrency to use the PoS mechanism was Peercoin. Ethereum (ETH), the largest altcoin, has a Proof of Stake mechanism.
