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What Is Blockchain Consensus

Intro To Blockchain: Consensus Algorithms - Part 1 | Xoken

Intro To Blockchain: Consensus Algorithms - Part 1 | Xoken

This question can be best answered by taking a look at the history of government. A lot of the same principles that apply to democracy, also apply to blockchains. Democracy was founded on the basis that power belongs to the people, and blockchains achieve a similar decentralization. The pillars of democracy that many of us experience every day, has not yet transferred over to technology. DLT stands for Distributed Ledger Technology and is one of the largest technological advancements of our time. A distributed ledger is just a database that is spread over multiple sites. This allows for more consistent uptime and the elimination for a centralized power. A blockchain is a type of distributed ledger. The word blockchain is pretty self-explanatory. In the most literal sense, blocks are added to a chain. The addition of every following block, makes it harder to alter the original block (in order to get back to the original, every block after it would need to be removed). Each block is composed of a group of transactions that is bundled together by a node. The way that the node does this, is by utilizing a consensus algorithm, which will be explained in the next section. After a node solves the block, it is broadcasted on the network to the other nodes. If the other nodes verify that the solution provided is correct, the block is accepted onto the chain. Perhaps the single most defining and important characteristic of a blockchain is the chosen consensus algorithm. This algorithm is what verifies that a block that is to be added to the blockchain is the real version. Without a consensus algorithm, anyone could potentially add information to the blockchain, which would derail the legitimacy of the entire system. There are two main types of consensus algorithms: 1. Proof-of-w Continue reading >>

Blockchain Consensus Algorithms Proof Ofanything?

Blockchain Consensus Algorithms Proof Ofanything?

Blockchain Consensus Algorithms Proof ofAnything? Blockchains have been proven over the last years to be stable distributed ledger technologies. Stable refers to the fact that they can recover from attacks and/or bugs without compromising their assets. They are most commonly known for enabling transaction with virtual cryptocurrencies not issued by a central authority. Popular examples are Bitcoin and Ethereum . However, both have been forked to create also alternative coins (Altcoins) having different features. For instance, Namecoin , the first fork of Bitcoin, is a cryptocurrency providing at the same time distributed domain name and identity without relying on a central authority. Thus, it is more resilient to censorship or potentially not democratically elected central authorities governing it. Of course at the same time this new technology as all new technologies have some risk because they need to be properly understood by their users. Initial Coin Offers (ICO) that fork from popular blockchains (or not even do this) may be part of frauds or scams. Hence, it is important to understand their key mechanisms and this blog post describes one of them: Establishing consensus of transactions happening on a blockchain. Without secure consensus it is possible to steal value (coins) or manipulate entries in the blockchain. The consensus is usually decided by a participant that can provide a proof of something. This something differ in the different consensus mechanisms. One should not confuse blockchain consensus with consensus in distributed systems. Consensus in distributed systems is about agreeing on a certain data value during computation. The idea is to reach a common state among several copies of data despite of failure, network partitioning or even manipulation by Continue reading >>

Proof-of-stake - Wikipedia

Proof-of-stake - Wikipedia

This article may rely excessively on sources too closely associated with the subject, potentially preventing the article from being verifiable and neutral . Please help improve it by replacing them with more appropriate citations to reliable, independent, third-party sources . ( Learn how and when to remove this template message ) Proof-of-stake (PoS) is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus . In PoS-based cryptocurrencies the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e. the stake). In contrast, the algorithm of proof-of-work (PoW) based cryptocurrencies (such as bitcoin ) rewards participants who solve complicated cryptographical puzzles in order to validate transactions and create new blocks (i.e. mining ). Proof-of-stake must have a way of defining the next valid block in any blockchain. Selection by account balance would result in (undesirable) centralization, as the single richest member would have a permanent advantage. Instead, several different methods of selection have been devised. Nxt and BlackCoin use randomization to predict the following generator, by using a formula that looks for the lowest hash value in combination with the size of the stake. [1] [2] [3] Since the stakes are public, each node can predict - with reasonable accuracy - which account will next win the right to forge a block. Peercoin 's proof-of-stake system combines randomization with the concept of "coin age," a number derived from the product of the number of coins times the number of days the coins have been held. Coins that have been unspent for at least 30 days begin competing for the next block. Older and larger sets of coins have a greater probability of sign Continue reading >>

Consensus - Blockchain

Consensus - Blockchain

New transactions are broadcast to all nodes. Each node collects new transactions into a block. Each node works on finding a difficult proof-of-work for its block. When a node finds a proof-of-work, it broadcasts the block to all nodes. Nodes accept the block only if all transactions in it are valid and not already spent. Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash. Nodes always consider the longest chain to be the correct one and will keep working on extending it. Cryptocurrencies such as Bitcoin enable users to submit payment transactions without going through a centralized trusted organization. Bitcoin relies on proof-of-work mining to secure consensus which is problematic because mining requires a massive expenditure of energy, confirmation of transactions is slow, and security is difficult to quantify. There are proposals to develop new consensus algorithms, such as Proof of Stake consensus and Byzantine fault tolerance consensus. Consensus without Mining - Proof of Stake In the Proof of Stake model used by, network security is governed by peers having a stake in the network. The incentives provided by this algorithm do not promote centralization in the same way that Proof of Work algorithms do. The network has will be highly decentralized because a large number of unique accounts are contributing blocks to the network by voting, and block creation reward is shared among the participant in proportion to their stake. In a nothing at stake attack, forgers attempt to build blocks on top of every fork they see because doing so costs them almost nothing, and because ignoring any fork may mean losing out on the block rewards that would be earned if that fork were Continue reading >>

Blockchain Consensus Algorithm: Pow, Pos, And Beyond

Blockchain Consensus Algorithm: Pow, Pos, And Beyond

Blockchain Consensus Algorithm: PoW, PoS, and Beyond One of the most critical aspects to understand blockchain its speed, applications, and potential is consensus algorithms. It determines everything from network security, confirmation speed, to environmental friendliness. As crucial as it is, few comprehend how such a dynamic concept works in practice; and among the most misunderstood aspects include just how new blocks of information are securely added to the ledger, consideringnocentralized authority is engaged to maintain the integrity of the network. As a recap from an earlier post , blockchain provides a way for transactions to be ordered and verified in a distributed ledger and ultimately provides a record of truth over a period of time. Without a central intermediary, the network of participating users that make up this system need to agree on the validity of whats being added to the ledger, using a set ofpre-definedrules. Aconsensusneeds tobe reached for the majority of the nodes in the network. But just how effective it is to implement such a consensus remains a work in progress till this very day. The problem of ensuring reliability in decentralized systems was first formalized in the scholarly paper The Byzantine Generals Problem , published back in 1982. In the illustration created by the authors, a Byzantine army is attacking a city and has it completely encircled. To proceed, the generals who are dispersed around the citys periphery must agree on a battle plan; but while some generals want to attack further, others want to retreat. And to complicate matters, the generals are so far apart from each other that messengers are required to deliver communications between them, while one or more generals may also be a traitor intending to sabotage the situation Continue reading >>

Review Of Blockchain Consensus Mechanisms

Review Of Blockchain Consensus Mechanisms

PR at @Wavesplatform #blockchain #cryptocurrency #fintech $WAVES Review of blockchain consensus mechanisms Cryptocurrencies use distributed ledgers or blockchains to record information primarily about the balance of every address for value transfer platforms (like bitcoin and most cryptocurrencies), though the approach can be extended to any kind of information. Key to the operation of the blockchain is that the network should collectively agree on the contents of the ledger: instead of authority for keeping accounts being centralised in one entity, like a bank, it is shared amongst everyone. This requires that the network maintains consensus around the information recorded on the blockchain. How this consensus is achieved impacts the security and economic parameters of the protocol. Here are five examples of how its done. Proof of work is the first distributed consensus mechanism, pioneered by bitcoins pseudonymous creator, Satoshi Nakamoto. Many cryptocurrencies followed suit, including Ethereum. In PoW, all the computers in the network that are tasked with maintaining the security of the blockchain known as Miners in bitcoin work to solve a puzzle consisting of a mathematical function called a hash. This task is straightforward (for a computer) but extremely repetitive, and therefore computationally expensive. Computers compete to find a hash with specific properties. The computer that finds the answer first the proof that they have done the necessary work is allowed to add a new block of transactions to the blockchain. They are rewarded with a tranche of newly-minted bitcoins (currently 12.5 BTC per block, or roughly every 10 minutes), plus all of the small transaction fees users have paid to send coins. PoW operates on the principle that it is expensive to add a t Continue reading >>

Consensus In Blockchain Systems. Inshort.

Consensus In Blockchain Systems. Inshort.

Scientist and Risk Taker math, informatics and their applications, in particular ML and blockchain aspiring renaissance man and polymath Consensus in Blockchain Systems. InShort. Blockchain technologies top the lists of 2017s hot trends. Many companies already back their products with blockchain technologies. Competitors use different approaches to blockchain technologies, emphasizing different aspects and pitching them as features to their customers. In this post I will provide an overview of the role of one of those particular aspects of blockchain technologies consensus. Blockchains are diverse and can be approached from a variety of perspectives. For the sake of this article, I would like to define a blockchain as a public, decentralized database, that keeps public records in an append-only fashion. Moreover, once added into the database (the blockchain) a record cannot be modified and it is very difficult to falsify entries. This last feature is called persistence. When an entry in the database (the blockchain) needs to be updated, a new record must be appended to the existing information. Finally, each of records can be viewed by any member of the public, allowing for any person to individually verify the authenticity of each transaction recorded for any single entry in the database (the blockchain). This transparency means that blockchains are auditable. CC-BY-3 Theymos from Bitcoin wiki vectorization: The main chain (black) consists of the longest series of blocks from the first (genesis) block (green) to the current block. Orphan blocks (purple) exist outside of the mainchain. But why bother with blockchains over traditional databases anyway? Blockchains become immediately appealing as soon as a database needs to be decentralized. An organization looking to av Continue reading >>

The World Of Blockchain Consensus Protocols

The World Of Blockchain Consensus Protocols

In distributed ledgers, a consensus mechanism is the way in which a majority, (or, in some mechanisms, all) of network members agree on the value of a piece of data or a proposed transaction, which then updates the ledger. In other words, a consensus mechanism is a set of rules and procedures that mains a coherent set of facts among the participating nodes. The consensus mechanism is a vital feature of a blockchain as it ensures that all participants of a distributed ledger are on the same page and enables the network to keep functioning even if some of its members are failing. In this article, we introduce the main consensus mechanisms used by leading digital currencies and tokens. The most commonly used consensus mechanism is the Proof-Of-Work protocol used by the first-ever cryptocurrency, bitcoin . For a blockchain that uses the Proof-Of-Work protocol transactions are confirmed by miners, who are required to make lengthy trial and error computations until a consensus is reached to verify that a transaction a valid. For using their computational power to confirm transactions and to maintain the peer-to-peer network miners are rewarded with new bitcoins. Cryptocurrencies that are using the Proof-Of-Work protocol include bitcoin, litecoin, dogecoin, and namecoin. The Proof-Of-Stake protocol differs from the Proof-Of-Work protocol as it makes mining new blocks easier for those who hold the highest amounts of the cryptocurrency. In other words, the stakeholders in a particular cryptocurrency network who have the greatest incentive to ensure the network runs smoothly will find it easier to do so. This feature of the Proof-of-Stake protocol creates an incentive for miners to consume their mined currency as opposed to converting it into fiat currency immediately upon minin Continue reading >>

Excellent Explainer: How Consensus Algorithms (including Bitcoin/blockchain) Work

Excellent Explainer: How Consensus Algorithms (including Bitcoin/blockchain) Work

Congrats to Tom the Dancing Bug, which has won a Kennedy Journalism Prize! Our own Ruben Bolling, creator of the Tom the Dancing Bug comic, has won a Kennedy Journalism Prize, given for works that "provide insights into the causes, conditions, and remedies of human rights violations and injustice, and critical analyses of relevant policies, programs, individual actions, and private endeavors that foster positive change." Couldn't have happened [] Three artificial pancreases: a special trio of Catalog of Missing Devices entries EFF has just published an update to its Catalog of Missing Devices (a catalog of things that dont exist thanks to the chilling effects of Section 1201 of the DMCA): a trio of ads for future artificial pancreas firmwares that illustrate the way that control over devices can magnify or correct power imbalances. Syllabus for a course on Data Science Ethics The University of Utah's Suresh Venkatasubramanian and Katie Shelef are teaching a course in "Ethics in Data Science" and they've published a comprehensive syllabus for it; it's a fantastic set of readings for anyone interested in understanding and developing ethical frameworks for computer science generally, and data science in particular. Explore today's top machine learning tools in this bundle Machine learning is all around us. From Googles search engines to Teslas self-driving cars, this field powers many of todays AI innovations, and, as more of these products find their way into the mainstream, understanding how they work is going to be a valuable skill. Regardless of your experience level, thePay What You Want: The [] Learn front-end development with JavaScript If you have aspirations of making it as a web developer, youre likely going to need to master JavaScript. Abrowser language that s Continue reading >>

Basic Primer: Blockchain Consensus Protocol

Basic Primer: Blockchain Consensus Protocol

Basic Primer: Blockchain Consensus Protocol Basic Primer: Blockchain Consensus Protocol guide. A blockchain is a decentralized peer-to-peer system with no central authority figure. While this creates a system that is devoid of corruption from a single source, it still creates a major problem. Think of a normal centralized organization. All the decisions are taken by the leader or a board of decision makers. This isnt possible in a blockchain because a blockchain has no leader. For the blockchain to make decisions, they need to come to a consensus using consensus mechanisms. So, how do these consensus mechanisms work and why did we need them? What are some of the consensus mechanisms used in cryptocurrencies? We will answer these questions in this guide.Basic Primer: Blockchain Consensus Protocol This is how Wikipedia defines consensus decision-making: Consensus decision-making is a group decision-making process in which group members develop, and agree to support a decision in the best interest of the whole. Consensus may be defined professionally as an acceptable resolution, one that can be supported, even if not the favourite of each individual. Consensus is defined by Merriam-Webster as, first, general agreement, and second, group solidarity of belief or sentiment. In simpler terms, consensus is a dynamic way of reaching agreement in a group. While voting just settles for a majority rule without any thought for the feelings and well-being of the minority, a consensus on the other hand makes sure that an agreement is reached which could benefit the entire group as a whole. From a more idealistic point-of-view, Consensus can be used by a group of people scattered around the world to create a more equal and fair society. A method by which consensus decision-making is a Continue reading >>

How Do The Various Blockchain Consensus Mechanisms Work, In Plain English?

How Do The Various Blockchain Consensus Mechanisms Work, In Plain English?

Imagine youre in a large room filled with people trying to send each other magical coins. These coins have the property that they can be duplicatedI can send one coin to Alice and send a duplicate coin to Bob. This is called double-spending, and it doesnt make for a very effective form of currency. One way we could prevent double-spending is to have all transactions go through a single person in the center of the room. She keeps a ledger of all transactions that have been made, and so she can detect and prevent double-spending. This is similar to how our current centralized banking system works. Cryptocurrencies, such as Bitcoin, answer the question of: How can we do this in a decentralized manner so that one entity doesnt have all the power? Suppose everyone in this large room keeps their own ledger of transactions, which is called a blockchain. When I send a coin to Alice, I yell out Hey everybody, Ive sent a coin to Alice! Of course, this would be quite clamorous with a large number of people, so not everybody would hear me. Those who do hear me will keep a record my transaction to Alice in their blockchain, and will pass this information along to their neighbors. Sooner or later, most, if not all, of the room will have heard about and recorded my transaction to Alice. Youve probably realized that this system sounds like a complete mess, and youd be right! A person on one side of the room very likely has a different looking blockchain than some other person on the other side of the room, and we havent taken care of the double-spending problem yet. This is where consensus comes in. While all of this maniacal shouting is happening, every person in the room is also individually playing some completely nonsensical game of chance, say, roulette. If I win, Im rewarded han Continue reading >>

Quick Overview Of Consensus Possibilities In A Blockchain

Quick Overview Of Consensus Possibilities In A Blockchain

Quick overview of consensus possibilities in a blockchain A blockchain is a decentralized ledger that runs on a peer to peer network. In the case of a public blockchain like Bitcoin, thousands or perhaps millions of anonymous users participate in this blockchain. How do we achieve trust in such a system, or in a private blockchain? This is where the consensus comes in. The consensus assures that the participants will trust each other and the validity of the next block. A consensus ensures that the network's rules will be followed and that there is only one truth in the blockchain environment. Depending on the type of blockchain you have, you will need a different consensus algorithm to make sure the last block in the blockchain reflect the state of the world at each moment. In this article, we will briefly explore different consensus algorithms. Let's start with the one from the Bitcoin and Ethereum's blockchains. The Proof of Work algorithm requires the miners to solve a complex mathematical problem involving cryptography. It is a lottery where computing powers play a big role. Basically, you take a block's data and encrypt it with a counter until you get a valid hash. Pros: Difficult to find a valid hash, but very easy to control of the hash is valid. It makes it impossible to cheat the system. Scales well with a great number of nodes. Cons: Takes a unbelievable amount of power. Not very environment-friendly. Susceptible to attacks if one party controls 51% of the computing power. Ethereum is moving towards a Proof of Stake consensus. The miner of the next block is chosen based on various combinations of random parameters such as the amount of coin they have, how long has it been since the owner had the coin... There are different instances of this algorithm like Pro Continue reading >>

A (short) Guide To Blockchain Consensus Protocols - Coindesk

A (short) Guide To Blockchain Consensus Protocols - Coindesk

A (Short) Guide to Blockchain Consensus Protocols We hear plenty of talk of how public blockchains are going to change the world, but to function on a global scale, a shared public ledger needs a functional, efficient and secure consensus algorithm. A consensus algorithm, like bitcoin's proof of work (the one we hear about most often), does two things: it ensures that the next block in a blockchain is the one and only version of the truth, and it keeps powerful adversaries from derailing the system and successfully forking the chain. In proof of work, miners compete to add the next block (a set of transactions) in the chain by racing to solve a extremely difficult cryptographic puzzle. The first to solve the puzzle, wins the lottery. As a reward for his or her efforts, the miner receives 12.5 newly minted bitcoins and a small transaction fee. Yet, although a masterpiece in its own right, bitcoin's proof of work isn't quite perfect. Common criticisms include that it requires enormous amounts of computational energy , that it does not scale well (transaction confirmation takes about 10-60 minutes) and that the majority of mining is centralized in areas of the world where electricity is cheap. Bitcoin creator Satoshi Nakamoto woke us up to the potential of the blockchain, but that doesn't mean we can't keep searching for faster, less centralized and more energy-efficient consensus algorithms to carry us into the future. While not a comprehensive list, the following are a few of the alternative approaches being kicked around out there. The most common alternative to proof of work is proof of stake. In this type of consensus algorithm, instead of investing in expensive computer equipment in a race to mine blocks, a 'validator' invests in the coins of the system. Note the te Continue reading >>

Consensus Mechanisms Of The Blockchain Codecentric Ag Blog

Consensus Mechanisms Of The Blockchain Codecentric Ag Blog

Welcome to the first article of the blockcentric column. We created it for blogging about Blockchain and all related topics. It will contain exciting articles about technology, projects, organisation and business concerns. They will contain knowledge and findings from our 20% time work but also news from the area. We are looking forward to your feedback on the column and exciting discussions about your use cases. A blockchain creates trust, traceability, and immutability through a peer-to-peer network. All transactions in the network, such as payments or event tracking in a supply chain, are confirmed by participants in the network. Thus, no central authority alone controls the validity of these events. These acknowledgments given by the participants lead to a consensus in the network, with which the data on the blockchain is continually persisted. So the majority of the participants decide whether a transaction is valid, instead of a single player. To create and implement a consensus, there are several mechanisms that I would like to explain and discuss in the following. Each Blockchain needs to choose one mechanism that handles the agreement of all participants onto a truth about their data. It could be imagined as a consistent way to get all politicians of a parliament to agree on one opinion. As politicians probably need to discuss about this, all participants of a blockchain network do this by communicating with each other over the network. The communication protocols are thereby implemented in the software that is executed on all involved devices. What is communicated here, however, is not a political opinion but the data base of the blockchain, such as the transaction history of a currency like Bitcoin . Currently there are mainly two of those consensus mechanis Continue reading >>

Drops - Blockchain Consensus Protocols In The Wild (keynote Talk)

Drops - Blockchain Consensus Protocols In The Wild (keynote Talk)

Blockchain Consensus Protocols in the Wild (Keynote Talk) A blockchain is a distributed ledger for recording transactions, maintained by many nodes without central authority through a distributed cryptographic protocol. All nodes validate the information to be appended to the blockchain, and a consensus protocol ensures that the nodes agree on a unique order in which entries are appended. Consensus protocols for tolerating Byzantine faults have received renewed attention because they also address blockchain systems. This work discusses the process of assessing and gaining confidence in the resilience of a consensus protocols exposed to faults and adversarial nodes. We advocate to follow the established practice in cryptography and computer security, relying on public reviews, detailed models, and formal proofs; the designers of several practical systems appear to be unaware of this. Moreover, we review the consensus protocols in some prominent permissioned blockchain platforms with respect to their fault models and resilience against attacks. @InProceedings{cachin_et_al:LIPIcs:2017:8016, author = {Christian Cachin and Marko Vukolic}, title = {{Blockchain Consensus Protocols in the Wild (Keynote Talk)}}, booktitle = {31st International Symposium on Distributed Computing (DISC 2017)}, pages = {1:1--1:16}, series = {Leibniz International Proceedings in Informatics (LIPIcs)}, ISBN = {978-3-95977-053-8}, ISSN = {1868-8969}, year = {2017}, volume = {91}, editor = {Andr{\'e}a W. Richa}, publisher = {Schloss Dagstuhl--Leibniz-Zentrum fuer Informatik}, address = {Dagstuhl, Germany}, URL = {URN = {urn:nbn:de:0030-drops-80160}, doi = {10.4230/LIPIcs.DISC.2017.1}, annote = {Keywords: Permissioned blockchains, consensus, Byzantine fault-tolerance, snake oil, protocol analysis}} Continue reading >>

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