Proof of X, What?
You and I make a transaction on the blockchain. You and I seem to agree but how can we enforce this agreement beyond any doubts? How can I not go and spend same coins again elsewhere?
Blockchain consensus algorithms work in such a way that each new block of information (transaction confirmations) added to the network is the only version of the truth. Eventually, this has to be agreed by all the nodes in a distributed/decentralized computing network. Making records immutable in the process.
Variety of blockchains exist that achieve consensus by different types of validation processes. Most common ones are listed below. The role of a validator (e.g. Cryptofay) is then to ensure that all the entires making it onto the public ledger are real and final transactions. Avoiding double spendings or other malicious network actions.
Proof of Work
With PoW, miners compete against each other to solve mathematically complex puzzles for a chance to have their new block added to the ledger. Earning a reward if their effort is successful.
Proof of Stake
Proof of Authority
In PoA-based networks, transactions and blocks are validated by approved accounts, known as validators.
Delegated Proof of Service (DPoS) is designed as an implementation of technology-based democracy, using voting and election process to protect blockchain from centralization and malicious usage.
E.g. EOS, Tezos, TRON, ICON, Lisk, etc.
Proof of Elapsed Time
The PoET concept was invented by Intel. It offers a readymade high tech tool to solve the computing problem of "random leader election." A random timer operating independently at every node determines whether or not that node creates the new block of the blockchain and gets the reward.
Proof of Burn
In Proof-of-Burn, rather than spending money on expensive computer equipment, you ‘burn’ coins by sending them to an address where they are unrecoverable.
Proof of Capacity
Here you pay for your hard disk space. The more hard disk space you have, the chances are high that you will mine the next block & earn rewards.
Proof of Activity
PoA was invented as an alternative incentive structure for Bitcoin miners. This combines both PoW & PoS. In PoA, miners start with a PoW approach to solve the puzzle. If the blocks mined don’t contain any transactions, the system switches to PoS. E.g. Decred, Espers
Few other honourable mentions include Byzantine Fault Tolerance (BFT), Practical BFT, Sieve, Proof of Weight or Unique Node Lists (UNL). World of blockchain is a very young and rapidly evolving space. Everyday, thousands of people are working on improving and inventing new ways of securing blockchain networks.
Not Too Cool to ₿e Back to School?
Wish to tip your toes into the water even more so? Below you can find a collection of amazing depositories of information that can help you acquainted with the world of blockchain, cryptocurrencies and everything decentralised. Be mindful, always check your sources. All links are third parties that we don't control or are associated with.
Or you can just forget about the digital revolution and watch the surfers ride Hawaiian waves live below.