Blockchain 101...Algorithms behind Blockchain Technology.

2017 was a very wild west year in cryptocurrency world millenials were becoming millionaires and everyone was just crazy about one word "Bitcoin". I heard news that people were giving fraction of bitcoin as gift to young married couples in a hope that they are making their friends a future super rich.. Intention was good so guys have you ever thought how Bitcoin operate and what about other Cryptocurrencies like Ethereum,Ripple,Cardano,EOS and so on work.

So we will try to understand the consensus algorithms.A consensus’ main purpose is to achieve agreement on agreed transactions among a distributed system(on the blockchain).

Before diving into this world one thing to know ‘proofs’ are not mathematically proven, but instead ‘to be proven’…so just keep this in mind.

Our Journey will start with

Proof-of-Work (PoW) - Proof of work describes a system that requires a not-insignificant but feasible amount of effort in order to deter frivolous or malicious uses of computing power, such as sending spam emails or launching denial of service attacks.

In Bitcoin PoW is conducted through miners (the people keeping the blockchain running by providing a huge amount of computing resources) competing to solve a cryptographic problem — also known as a hash puzzle.

The first miner who manages to produce the PoW will be then awarded some Bitcoins. Over time, the amount of Bitcoin awarded decreases over time.

Some famous Cryptocurrencies with PoW -Bitcoin,Peercoin,Litecoin,Monero,Ethereum,Zcash,Dogecoin,Verge,Bytecoin and so on

Proof-of-Stake (PoS)-Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins he or she holds. This means that the more Bitcoin or altcoin owned by a miner, the more mining power he or she has.

The idea of putting coins to be ‘staked’ prevents bad actors from making fraudulent validations — upon false validation of transactions, the amount staked will be forfeited. Hence, this incentivises forgers to validate legitimately.

 PoS systems, instead of receiving a cryptocurrency reward, the miners instead takes the transaction fees as rewards.

Proof-of-Authority (PoA)-Proof of Authority (PoA) is a modified form of Proof of Stake (PoS) where instead of stake with the monetary value, a validator’s identity performs the role of stake.

Pre-selected authorities (called validators) secure the blockchain and are able to produce new blocks. New blocks on the blockchain are created only when a super majority is reached by the validators.

The identities of all validators are public and verifiable by any third party — resulting in the validator’s public identity performing the role of proof of stake. As these validators identity are at stake, the threat of their identity being ruined incentivises them to act in the best interest of the network.

Proof of Importance(PoI)-Proof of Importance is the mechanism that is used to determine which network participants (nodes) are eligible to add a block to the blockchain, called ‘harvesting’. In exchange for harvesting a block, nodes are able to collect the transaction fees within that block.

Unlike existing consensus mechanisms such as PoS, PoI seeks to take into account one’s overall support of the network.

Delegated Proof-of-Stake (DPoS)-Delegated proof of stake uses real-time voting combined with a social system of reputation to achieve consensus. Every token holder can exercise a degree of influence about what happens on the network.

DPoS is a consensus algorithm maintaining irrefutable agreement on the truth across the network, validating transactions and acting as a form of digital democracy.

Proof of Burn (PoB)-Proof of burn is a method for distributed consensus and an alternative to PoW and PoS. It can also be used for bootstrapping one cryptocurrency off of another.The idea is that miners should show proof that they burned some coins - that is, sent them to a verifiably unspendable address. 

This can be viewed in a similar manner to hedging.A parent token that’s burnt is hedged and new tokens are released upon the burnt/hedged tokens to be used for other reasons.

Proof of Identity(PoI)- is a cryptographic evidence (piece of data) which tells that any user knows a private key that compares to an authorized identity and cryptographically attached to a specific transaction. Every individual from some group can create a PoF (only a block of data) and present it to anyone for instance to the processing node.

Proof of Elapsed Time(PoET)- is a blockchain network consensus mechanism algorithm that prevents high resource utilization and high energy consumption, and keeps the process more efficient by following a fair lottery system. Since being resource intensive, it allows a miner’s processor to sleep and switch to other tasks for the specified time thereby increasing its efficiency.

Practical Byzantine fault-tolerant (PBFT) -Every node distributes a public key. Messages getting through the node is designated by the node to confirm its organization. When enough indistinguishable reactions are achieved, at that point a consensus is met that the message is a legitimate transaction.

PBFT is a network formed for the low-latency storage framework. This is pertinent to digital resource-based platforms that don't need a lot of through puts yet ask numerous transactions.

Not at all like PoW and PoS, a PBFT consensus mechanism does not require any hashing energy to approve exchanges in a blockchain, which implies there is no requirement for high energy utilization and the danger of centralization is lower than in both of those blockchain mechanisms.

Proof of Activity(PoA)-Ensure that all the transactions occurring on the blockchain are genuine and all users arrive at a consensus on the precise status of the public ledger. 

Proof of activity (POA), is a hybrid of POW and POS, and attempts to bring the best of both. In POA, the mining process starts as a standard POW process with various miners trying to outpace each other with higher computing power to find a new block. When a new block is found (mined), the system switches to POS, with the newly found block containing only a header and the miner's reward address.

Based on the header details, a new random group of validators from the blockchain network is selected who are required to validate or sign the new block. The more cryptocoins a validator owns, the more chances he or she has for being selected as a signer.Once all validators sign the newly found block, it gains the status of a complete block, gets identified and added to the blockchain network, and transactions start getting recorded on it.

Proof of Capacity(PoC)-allows the mining devices in the network to use their available hard drive space to decide the mining rights, instead of using the mining device’s computing power (as in the proof of work algorithm) or the miner’s stake in the cryptocoins (as in the proof of stake algorithm).

Proof of capacity allows the mining devices (nodes) on the blockchain network the ability to use empty space on their hard drive to mine the available cryptocoins. Instead of repeatedly altering the numbers in the block header and repeated hashing for the solution value, POC works by storing a list of possible solutions on the mining device’s hard drive even before the mining activity commences.The larger the hard drive, the more possible solution values one can store on the hard drive, the more chances a miner has to match the required hash value from his list, resulting in more chances to win the mining reward.

Due to emerging interest in Blockchain technology lot of new innovations are happening that helping to identify new consensus algorithms and list is growing. In my coming articles I will dig deep in each protocol and try to understand the DNA of blockchain so till then stay tune.

Disclaimer : This is just my analysis,finding and understanding so please refer other tools as well to validate it, I have tried giving maximum credit to sources that i know as well utilized creating this article.

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