The types of consensus algorithms:
- Proof of Work (PoW) gained popularity as the Bitcoin consensus mechanism. It allows you to choose a miner (that must also be a node). Miners compete against one another to solve difficult mathematical problems. The miner who completes this puzzle first will be eligible to mine the chain's next block.
- To select who will validate the new block, Proof of Stake (PoS) uses the number of tokens owned by nodes rather than processing power. Similar to a bank deposit, nodes must stake a particular number of tokens.
- Delegated Proof of Stake (DPoS) is a long-term, scalable, and energy-efficient cryptocurrency. As a result, token owners no longer need processing power. The voting method ensures a certain level of security among peers. It has a higher degree of centralization than PoS.
- Proof of Burn (PoB) is another energy-saving alternative to Proof of Work (PoW). Users can burn tokens and produce new blocks proportionally to the amount of tokens burned, according to the protocol regulations. Physical resources are not wasted by miners.
- In comparison to other consensus procedures, this technique has a high degree of centralization. Proof of Authority (PoA) is suited for governmental or private institutions and entities where nodes are assigned the task of creating new blocks by a centralised entity.
- Proof of Elapsed Time (PoET) uses a lottery approach to choose block winners in order to ensure fairness among players. The lottery method is transparent, resulting in a transparent environment.
Read More: What is Consensus algorithm?
