The Main 4 Consensus Algorithms



For a decentralized distributed network that offers higher transparency, protection and immutability, it's very necessary to maintain all this every time. But have you ever thought about how blockchain can achieve all this?

Governing such a big decentralized network and verifying every transaction while ensuring there is no centralized authority is somehow very practical.

So, the Blockchain consensus algorithm maintains this all.

In this article, we are going to help you to learn all about blockchain consensus algorithms. So, let's start without any delay.

What is a consensus algorithm?

To validate and authenticate every transaction in Blockchain which means for secured and validate transactions only, a consensus protocol is followed.

Well, Blockchain consensus algorithms do this all.

In a very simple way, we can define consensus algorithms as a process in computer science used to gain authorization on a single data value among circulated methods or networks.

By doing so, consensus algorithms attain reliability and build trust among unknown peers of distributed computing networks in Blockchain.

Consensus protocol comprises some conspicuous goals such as co-operation, agreeing, equal rights to every node, collaboration and compulsory engagement of every node in the consensus process.

Therefore, the main goal of a consensus algorithm becomes finding a common agreement

Applications of consensus algorithm

Consensus algorithms are mostly used in decentralized systems and also useful in centralized systems.

There are a vast number of applications of consensus algorithms present.

To get sufficient knowledge of this we made a proper list of applications of consensus algorithms.

  1. Consensus algorithms are used to characterize a node as a leader for any distributed piece of work.
  2. Consensus algorithm helps in concur state machine replicas and to ensure steadiness among them.
  3. It also helps in concluding whether to hand over a distributed transaction to a database.

Types of consensus algorithms

There are approximately 30 consensus algorithms that exist in computer science, and it's difficult to learn all of them.

Here, we are going to describe the top 4 most commonly used consensus algorithms by blockchain projects around the world.

  1. Proof-of-Work
  2. Proof-of-Stake
  3. Delegated Proof of stake
  4. Proof-of-Authority (PoA)

Proof of Work (PoW)

The most popular and original consensus algorithm is proof of work. This is largely used by cryptocurrencies like Bitcoin, Ethereum and Litecoin. PoW was first assembled by Satoshi Nakamoto to be used in his Bitcoin implementation in 2008.

PoW is used to solve complex mathematical puzzles which require a lot of computational power to explain and to easily provide solutions. The nodes who can solve such puzzles are more likely to mine the next block.

Speed proficiency and accurate work of Blockchain systems depend on PoW.

The main advantages of PoW are defence from anti-DoS attacks and low impact of the stack on mining possibilities.

Somehow, its huge expenditure, the uselessness of computations and SI per cent attacks make questions on it.

Proof of Stake (PoS)

The very next consensus algorithm is Proof of stake. It is majorly used by Decreed, Peercoin and shortly by Ethereum also.

Ethereum is shifting itself from PoF to PoS because of its unique revenue-generating capabilities.

It works on the principle of betting coins in a wallet. The "nodes" that have betted their coins will make their point when a consensus is required to be achieved. PoS required very little computational power.

Tokens are spending resources in this case. When a staking node succeeds in voting for the correct transaction, it will receive better chances to bet when the next transaction takes place. If they fail to do so, the nodes also lose their stake.

PoS is ahead of PoF because of its high energy efficiency, lower barriers to entry, greater revenue-generating capabilities and stronger crypto-economics incentives for a broader set of users.

Delegated Proof of Stake (DPoS)

DPoS is not entirely decentralized as it equalizes the negative effects of a centralized system.

Delegated proof of stake is just the advanced version of PoS. It was developed by Daniel Larimer, Steemit and EOS in 2014.

In DPoS, coin holders stake their crypto coins with massive node operators. These operators are also named delegates, block producers or witnesses.

These delegates are used by coin holders to create blocks and implement computing power rather than mining.

DPoS allows countless transactions productivity as compared with other blockchain networks.

Since the process of electing delegates is followed in DPoS, therefore the number of nodes that verifies transactions decreased.

The fortunate thing about DPoS is, it is faster than PoS, less energy-intensive and environmentally friendly.

Proof-of-Authority (PoA)

Last but not least, the ultimate consensus algorithm is proof of authority. It was first proposed by Parity Technologies Gawain Wood and Ethereum co-founder in 2017.

PoA provides high performance, imperfection tolerance and is used for an entirely centralized system.

Proof of authority is permissioned blockchain consensus in which all the blocks are pre-selected.

A node that passed preliminary authentication to gain the right to generate new blocks and authority, which is the required conditions for generating new blocks.

As its nature is completely centralized therefore it is mostly used in private networks only.


In this guide, we have provided you with complete details about the consensus algorithms, their applications and type.

So, now what, if you have any doubt regarding the consensus algorithms, feel free to put them in the comment section.

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