Understanding Delegated Consensus (DLT/Blockchain)
In blockchain systems, achieving agreement (or consensus) on transactions is a critical part of ensuring security and trust. In a previous discussion, we explored peer-to-peer (P2P) consensus, where participants directly agree on the validity of transactions. However, P2P consensus has limitations that make it impractical in some scenarios. This is where delegated consensus comes into play, offering an alternative approach.
What Is Peer-to-Peer Consensus?
Before diving into delegated consensus, let’s briefly recap P2P consensus. In this method:
- Known participants: All participants must be identified before the process begins. Adding or removing participants later is challenging.
- Unanimous agreement: Every participant has the power to veto a transaction if they disagree with its validity.
While these conditions ensure strong security and trust, they can be restrictive and impractical in systems with many users or dynamic participation.
What Is Delegated Consensus?
Delegated consensus simplifies the process by assigning the responsibility of reaching agreement to a smaller, trusted group of third parties—known as validators. Instead of every participant directly validating transactions, they rely on these validators to do the work on their behalf.
This approach is widely used in many blockchain and distributed ledger technology (DLT) systems, including popular platforms like Hedera Hashgraph, Ethereum, and Avalanche.
Benefits of Delegated Consensus
Delegated consensus addresses some key challenges of P2P consensus:
Drawbacks of Delegated Consensus
While delegated consensus offers scalability and flexibility, it comes with trade-offs that blockchain users should understand:
1. Transparency to Validators: For validators to perform their role, transaction details and the current state of the system must be visible to them. This means participants sacrifice some privacy.
2. Trust in Validators: The system depends on validators acting honestly. Participants must trust that validators have stronger incentives to behave ethically than to act maliciously. If validators collude or are compromised, the integrity of the system could be at risk.
Real-World Applications
Delegated consensus is particularly well-suited for public blockchain networks and has a wide range of use cases:
- Decentralized Finance (DeFi): DeFi platforms rely heavily on delegated consensus to process transactions quickly and securely across a large user base.
- Identity Management: Blockchain-based identity systems use delegated consensus to verify identities while maintaining scalability. These systems can also serve as a foundation for more secure P2P interactions in other applications.
- Governance: Delegated consensus is often used in decentralized governance models, where decisions about protocol changes or community funds are made by trusted representatives rather than all participants.
Conclusion
Delegated consensus is a practical solution for overcoming the limitations of P2P consensus in blockchain systems. By relying on validators to reach agreement, it enables scalability and dynamic participation while supporting complex use cases like DeFi, identity management, and governance. However, users must understand its trade-offs—particularly the need for transparency and trust in validators—to make informed decisions about when and how to use this approach.
Combining P2P and delegate consensus
Peer-to-peer (P2P) consensus and delegated consensus work together in the operations of an AppNet, a distributed network built on Hedera's Distributed Ledger Technology (DLT). AppNets combine the privacy and efficiency of private networks with the trust and security of Hedera's public ledger, leveraging both consensus mechanisms to achieve scalability, security, and flexibility.
How P2P Consensus Works in AppNets
Within an AppNet, P2P consensus operates at the application level among its participants. Here's how it functions:
1. Private Network Operations: The AppNet consists of a set of computers or nodes that form a private network. These nodes interact directly with each other to execute transactions, store state, and maintain control over their data.
2. Lightweight Trust Model: For P2P consensus in an AppNet, only one honest participant is required to ensure the integrity of the network. This lightweight trust model allows smaller networks to operate efficiently without requiring the extensive resources needed for global public consensus.
3. Customizable Rules: Each AppNet can define its own rules for transaction validation and state management, tailoring its operations to specific application requirements.
This localized P2P consensus ensures that AppNets remain fast, efficient, and private while handling their internal operations.
How Delegated Consensus Complements P2P in AppNets
While P2P consensus governs internal operations, delegated consensus comes into play when AppNets interact with the Hedera public ledger. This is achieved through the Hedera Consensus Service (HCS):
1. Delegation to Hedera Validators: Instead of reaching global consensus internally, AppNets delegate this responsibility to Hedera's public network. Transactions are sent to Hedera for ordering and timestamping by its validators.
2. Public Trust and Security: The Hedera mainnet ensures decentralized trust by requiring 2/3 of its nodes to be honest. This guarantees that transactions processed by Hedera are secure and tamper-proof.
3. Consensus Ordering: The Hedera network provides a globally agreed-upon order for transactions submitted by the AppNet. This ensures consistency across all nodes in the AppNet without requiring them to perform resource-intensive global validation themselves.
4. Mirror Nodes for Validation: Each node in an AppNet runs a Hedera mirror node, which receives transaction data from the mainnet. These mirror nodes allow the AppNet to verify consensus order locally without writing to or slowing down the mainnet.
How They Work Together
The combination of P2P and delegated consensus allows AppNets to balance efficiency, privacy, and security:
- Internal Operations (P2P Consensus): The AppNet handles execution, state storage, and private data internally using P2P consensus among its nodes. This ensures high throughput and low latency for application-specific tasks.
- Global Trust (Delegated Consensus): When transactions need to be ordered or verified globally, the AppNet relies on Hedera's delegated consensus via HCS. This adds a layer of public trust without exposing sensitive data or overburdening the mainnet.
For example, an identity management system built as an AppNet might use P2P consensus for internal identity verification processes while delegating timestamping or credential issuance events to Hedera's public ledger for global trust.
Benefits of Combining Both Consensus Mechanisms
By integrating both P2P and delegated consensus, AppNets achieve several advantages:
1. Scalability: Offloading global consensus tasks to Hedera allows AppNets to focus on efficient internal operations without compromising security.
2. Privacy: Sensitive application data remains within the private AppNet while only essential transaction metadata is shared with the public ledger.
3. Security: The Hedera mainnet provides a robust layer of decentralized trust that complements the lightweight trust model of P2P consensus within the AppNet.
4. Flexibility: Developers can customize their AppNet’s internal operations while still benefiting from Hedera’s trusted infrastructure for global coordination.
In summary, P2P consensus ensures efficient and private internal operations within an AppNet, while delegated consensus via Hedera provides global trust and security when needed. Together, these mechanisms enable developers to build scalable, secure, and flexible distributed applications that leverage both private control and public trust effectively.