Proof of Authority (PoA) Summary [Cryptocurrency consensus mechanisms]
Proof of Authority is a consensus mechanism where members of a cryptocurrency network are identified and receive delegated powers to solve blocks. If they defraud the system their identity is at stake and they will either be prosecuted or booted from the network. This is a centralized system where a higher authority delegates mining powers […]
Proof of Burn (PoB) Summary [Cryptocurrency consensus mechanisms]
In the Proof of Burn (PoB) consensus mechanism, miners earn the right to mint the next block by burning some value in the blockchain. All proof systems are based on the principle that minting a block must incurr in some cost, otherwise fraudsters could inject invalid transactions into the blockchain. Bitcoin achieves this by making […]
ELI5 Proof of Stake (PoS) – How does PoS work?
In the cryptocurrency universe, Proof of Stake (PoS) is one of the most popular alternatives to the Proof of Work (PoW) family of consensus mechanisms. While PoW systems invest large amounts of energy to make sure transactions are legit, PoS does not require mining hardware. Proof of Stake “miners” (stakers) must lock a financial stake […]
Proof of Space (PoSpace) Summary [Cryptocurrency consensus mechanisms]
Proof of Space uses hard disk space as the value used to guarantee a participant’s stake in mining. By allocating disk space, the network participant provides value to the network, which uses this space to solve computational problems. Given low network bandwidth for a lot of regions, making it difficult to transfer large amounts of […]
Concepts In This Page
A process or system by which multiple parties are able to reach consensus. In the context of cryptocurrencies, it's the process which allows for everyone to agree on everyone else's money balance. E.g. Bitcoin employs Nakamoto consensus via PoW mining.