PoS Vs, PoW & 5 futuristic blockchain protocols

Published 28 Jun 2021 by Abhishek Bourai

Table of Content

  1. Proof of Work (POW)
  2. Proof of Stake (POS)
  3. Proof of Brain (POB)
  4. Proof of Burn (PoB)
  5. Proof of Authority (PoA)
  6. Difference Between the Consensus Mechanisms we discussed.

Blockchains operate as decentralized, automated systems that work without any governance from a single entity. As a result, millions of people participate in the verification and authentication of transactions happening on them worldwide. A consensus algorithm is an agreed upon procedure for all participants in the blockchain network to reach agreement about what’s currently going on with their shared ledger.

This task is performed by the consensus mechanism, a set of rules that decides on the contributions of the various participants of the blockchain. Many consensuses work on different principles, such as Proof of Work, Proof of Stake, Proof of Capacity, Proof of Identity, Proof of Authority, Proof of Brain, Proof of Burn, Proof of Elapsed Time, Proof of Activity, etc. In this article, we will discuss the most known and famous consensus mechanisms.

mechanisms

Proof of Work (POW)

In 1993, Proof of Work was introduced before blockchains became famous and were not even used in a blockchain at first. Dwork and Naor proposed Proof of Work to combat junk mail, and Adam Back further developed this idea in the Hashcash algorithm.

In 2009, Satoshi Nakamoto, the creator of Bitcoin, published a white paper combining POW with an economic incentives mechanism to build a means of ensuring the Bitcoin blockchain’s integrity and preserving order in the production of new blocks. This was the beginning of the biggest cryptocurrency, Bitcoin. Bitcoin uses a Hashcash proof of work system.

The goal of the miners is to create a hash matching Bitcoin’s current “target.” They must create a hash with enough zeroes in front. The probability of getting several zeros in a row is very low. But miners worldwide are making trillions of calculations in a second, so it takes them about 10 minutes on average to hit this target. Proof of Work consumes a lot of electricity and computer power.

Proof of Stake (POS)

The concept of Proof of Stake (PoS) states that a person can mine or validate block transactions according to how many coins they hold. This means that the more coins owned by a miner, the more mining power they have.

Ethereum 2.0 will overtake the existing Ethereum 1.0 blockchain by improving scalability and accessibility. The core of the Ethereum 2.0 architecture is the Proof of Stake (PoS) consensus mechanism, which will replace the existing Proof of Work (PoW) consensus mechanism. DASH is a popular cryptocurrency known as digital cash. It is one of the pioneer cryptos to implement a proof of stake consensus mechanism.

Proof of Brain (POB)

Proof of Brain is used by Steem and is described in the blue paper(https://steem.com/steem-bluepaper.pdf) that contains the properties. Proof of Brain has two properties that allow the Steem blockchain to distribute a large portion of the block rewards using human participation as the mining mechanism rather than using electricity and finding hashes that traditional proof-of-work blockchains utilize. A proof of brain mechanism rewards users as they contribute to a token-based community system that requires mechanisms for establishing and evaluating content’s social value. Using proof of brain i envision a beefed up version of reddit on blockchain! The steemit blue paper mentions rewards for content creators this is pretty much happening with steemit already. We will have to see how this Consensus mechanism turns out to be in use and outperform traditional centralised platforms like reddit.

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Proof of Burn (PoB)

Proof of Burn is a Proof of Work system without energy wastege. It works on the principle of allowing miners to burn cryptocurrencies. They are then permitted the right to write blocks in proportion to the coins burnt.

Miners may burn the native currency of the Blockchain application or the currency of an alternative chain, such as bitcoin. The more coins they burn, the better are their chances of being selected to mine the next block.

Slimcoin, a virtual currency network that uses Proof of Burn, Slimcoin’s PoB implementation combines three algorithms: PoW, PoS, and PoB concept. The process of burning coins uses Proof of Work; the more coins one burns, the more chances one has to mine using Proof of Stake, and the whole ecosystem follows the Proof of Burn concept.

I feel POB is a very underrated blockchain protocol. We have POW & POS blockchains dominating the market, but there can be numerous use cases where we will not need to store the blockchain data permanently. My favourite hypothetical use-case of Proof of Burn is where we can use POB in the future in an open source distributed network of electric vehicle charging stations run on a blockchain. We have projects like power ledger working on smart grids and optimizing energy trading, gifting energy between rich neighborhoods, etc! If power ledger is the apple of POB blockchain, I want to see something like an android, an open source version of an energy sharing solution which any electric vehicle, solar rooftop owners etc can use and anyone can connect for free. For this fantasy to be real a lot of infrastructure is needed which will have to be utilised by the opensource solution. So there is a very long road ahead.

Proof of Authority (PoA)

It is a reputation-based consensus algorithm that introduces a practical and efficient solution for blockchain networks; it was proposed in 2017 by Ethereum co-founder and former CTO Gavin Wood. Proof of Authority algorithm leverages the value of identities, which means that miners are not staking coins but their reputation instead. So, PoA blockchains are secured by the validating nodes that are selected as trustworthy entities. Thus, proof of Authority allows companies, organizations, or sometime in the future counties as well to maintain their privacy while availing benefits of blockchain technology. Microsoft Azure is an example of PoA being implemented; the Azure platform provides solutions for private networks, with a system that does not require native currency like ether’ gas’ on Ethereum since there is no need for mining. Azure nodes are pre-selected.

Difference Between the Consensus Mechanisms we discussed.

Consensus Mechanisms

Blockchain is a relatively new technology, and as such there are many different consensus algorithms to learn about. These consensuses work on different principles, so it’s important for you to know which one your blockchain uses in order to understand how the system functions and what type of mining or staking is required. The best way to do this is by subscribing to cxihub’s newsletter - we send out weekly news updates that will keep you up-to-date with everything going on in the crypto industry!

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