In simple words, consensus algorithms are a decision-making method for a group, where individuals of the group build and agree on the decision that works best for the rest of them.
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In the past article, we took a glance at some popular types of consensus algorithms. Well, there are a few more types of consensus algorithms than what we saw. These are Proof of Burn(PoB), Proof-of-Activity (PoA), Proof of Capacity, and proof-of-Weight (PoW). So let’s crush the topic.
In Proof-of-Burn, you need to ‘burn’ coins by forwarding them to an address where they are unrecoverable. Based on an arbitary selection process, you can earn a lifetime privilege to mine on a system. Miners need to burn the native currency or any currency of an alternative chain. The possibility of getting selected to mine the next block gets higher as more coins burn.
Slimcoin is the only coin that implements Proof-of-Burn. Slimcoin uses a mixture of PoW, PoS, and PoB. In spite of wasting resources, PoB can be considered a good substitute for PoW.
the motivation behind the creation of PoA was nothing but to find a replacement impulse structure for Bitcoin miners. Decred is the example coin using Proof-of-Activity for validation. Just like PoW, PoS, PoA needs an excessive amount of energy.
PoA includes both combinations of PoW & PoS. In PoA, to solve the puzzle, miners need to begin with a PoW approach. The system can switch to PoS, if the blocks mined don’t include any transactions.
A group of validators is allocated to sign the new block, based on the header data. So, a validator has the highest possibility to be chosen if he possesses more coins. To become a block, all the selected validators need to sign the template.
A new group of validators is being chosen, if the validators failed to complete the block. This process continues until a block receives the required amount of signatures. Awards are been distributed between the miner and the validators.
Proof of Capacity
This consensus algorithm mechanism is different from others. Here you pay for your hard disk space. In the Proof of Capacity consensus, rather than investing in expensive hardware or burning coins, validators are interested to invest their hard drive space. The more hard drive space validators own, the greater are their possibilities of getting selected to mine the next block as well as to earn rewards.
Let’s talk about the process now. So, in a PoC, before mining, the algorithm generates ‘plots’ which is a large number of data sets. You need to store these plots on your hard drive. And of course, the greater number of plots you have, get better your chances of finding the next block. However, in this mechanism, you have to lavish a lot on hard drive space. Burstcoin is solely cryptocurrency to use a variety of proof of capability.
PoW is a wide classification of consensus algorithms based on the Algorand consensus model. In PoS, the probability of “locating” the next block, depends on the percentage of tokens possessed in the network. Filecoin’s Proof-of-Spacetime is weighted on what quantity IPFS information is being kept.