Consensus mechanisms are essential for decentralization in Web3. They provide an automated set of rules that ensure order and stability. The trust that a consensus mechanism creates is why people are willing to invest billions of dollars into cryptocurrencies. Although it’s not necessary to know the technical details of the mechanism, understanding the core principles can be helpful.
There are two established consensus methods: Proof of Work (PoW) and Proof of Stake (PoS). PoW requires nodes to solve complex problems to create new blocks, but it consumes a lot of computing power and has scalability limitations. PoS eliminates the need for mining by staking tokens, but it can be vulnerable to attacks.
Proof of Authority (PoA) is a variation of PoS where validators stake their reputation instead of monetary value. This ensures trustworthy validators, but it sacrifices privacy and decentralization.
Proof of Delivery (PoD) is a unique consensus method developed by the Fleek Network for P2P networks. It uses secret encryption keys and specific information exchange to ensure fair delivery without relying on a trusted third party.
While PoW and PoS are still widely used, new consensus methods are being developed to optimize specific use cases. PoA is suitable for private chains, while PoD is ideal for P2P networks. Web3 will continue to innovate and develop new consensus methods to support its evolving use cases.
Continue reading on Coinpedia.org
By
By
By
By