Fault-tolerant Agreement Algorithms Preserving Blockchain Projects

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  • March 26, 2021
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The unprecedented, decentralized operation of public blockchain systems in the digital space depends much on the participation of thousands upon thousands of anonymous nodes or computers around the world. In the name of order in verifying and authenticating countless transactions between parties, a specific consensus mechanism is employed to guarantee that all participating nodes are at a level of agreement to keep the distributed ledger economically operative, protected, indelible, transparent, and fair.

Consensus mechanisms are varied in the sense that blockchain projects work on different principles. Therefore, a specific consensus mechanism must be carefully examined and integrated to ensure optimal function to maximize the blockchain project’s efficiency according to its reasons of existence.

Satoshi Nakamoto saw it perfect for Bitcoin to adopt Proof-of-Work (PoW) as a consensus algorithm. Vitalik Buterin chose Proof-of-Stake (PoS) in the deployment of Ethereum projects. Dan Larimar for his Bitshares and EOS applied his own Delegated Proof-of-Work (DPoS) algorithm design. Other lesser-known consensus mechanisms were created to which a closer look is deserved.

Proof of Elapsed Time (PoET)

This consensus mechanism empowers permissioned blockchain networks to grant mining rights to block winners. A lottery system is employed to give every node a chance to win. A random wait time is generated by the PoET mechanism where all nodes go to sleep within the given duration. The first node to wake up gets to mine a new block to the blockchain. PoET operates similarly to PoW only that it consumes a lot less electricity and increases efficiency because the miner’s processor can sleep and do other tasks during the waiting time.

Proof of Authority (PoA)

This type of consensus algorithm authorizes a small number of network participants in validating and authenticating transactions together with updating the distributed ledger. A chosen configuration is applied on the blockchain so that a number of validating machines generate blocks of transactions. Via a unanimous or majority vote by block generators, a new block is accepted. It can be also that a block can be automatically accepted even without verification, depending on the chosen scheme. In a PoA, validators need not compete among them as there is no competition to speak of. There is no computing power to require a lot of electrical energy in operating the project. The limited number of validators affords the network a more frequent validation of blocks, a higher rate of transactions, and an almost zero expense in fees and charges. The only downside to this particular algorithm is its centralized character due to a small number of validators.

Proof-of-Capacity (PoC)

 Miners allotting storage space percentage for a specific goal is the guarantee of this consensus mechanism. Processing transactions for verification and validation to generate blocks, miners must commit their disk space for plotting files. Plotting more disk space means that there is a higher chance the miner will win the right to generate a block. Plotting is the determination of all possible solutions to the hashing before mining starts. PoC stands in contrast with PoW and PoS as block creators must prove their performance in solving difficult computations, or the ownership of a certain amount of money. PoC is often called the green algorithm as it is eco-friendly in the sense that users can use their own existing hardware instead of expensive ASICS used in Bitcoin mining. The coins are generated for a longer period and will be distributed among active miners. PoC is efficient in that it uses less energy than BTC transactions, special mining software is not needed, and excess storage space is more accessible.

Proof-of-Activity (PoAc)

When PoW demands that miners worked to solve a mathematical puzzle, and PoS asks for the amount of staked capital, Proof of Activity requires being involved in the mining process and signing the next block.

Proof-of-Burn (PoB)

This consensus mechanism requires the miner to “burn” coins by depositing them to an address where they are verified to be irretrievable. Once a miner gives up a portion of his wealth to prove they follow the protocol, he earns a lifetime of right to mine on the network according to a random selection process, thereby preserving the network in favor of larger gains.


Different strokes for different folks. Various projects on the blockchain have different ways of making their own community agree on consensus to preserve, nurture, and flourish the project. Different though in approaches and focus, the goal is the same, to be united as one mechanism working in a decentralized ecosystem. Consensus mechanisms vary according to needs and demands. More designs are expected to emerge and we will try to tackle each in the next articles to come.

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