Distributed consensus is a mechanism to ensure agreement between systems about the state of the blockchain. It confirms that the public ledger is accurate and maintains a decentralized record of all transactions.
The most common distributed consensus algorithms in blockchain are Proof of Work (PoW) and Proof of Stake (PoS).
Proof of Work (PoW) verifies transactions by pooling computing power to solve complex cryptographic problems called hashes, with those lending power (miners) receiving rewards. Meanwhile, Proof of Stake (PoS) chooses random validator nodes to verify transactions, which are users or computers that stake their own crypto to create new blocks in exchange for a reward.
What’s The Distributed Consensus in Distributed Systems?
Distributed consensus enables a distributed system (blockchain) to operate by ensuring that all systems agree on the records. The systems are the computers and participants in the blockchain that lend their processing power to verify transactions.
In a centralized system, there’s an intermediate authority that verifies transactions and provides consensus. Removing this entity to achieve decentralization required solving the problem of distributed consensus. This problem was first provably solved with the launch of Bitcoin, though research done over a number of years into methods and algorithms made it possible.
Challenges in Distributed Consensus
One challenge in implementing distributed consensus is protecting against specific computers or nodes failing, ensuring the network is still functional and accurate. Efficiency and transaction cost are also issues that consensus algorithms are trying to solve, as not all of them are scalable.
Another challenge is malicious nodes and attacks that intentionally try to harm the network. One potential attack is the 51% attack, which occurs when bad actors take over the majority of the blockchain’s processing power, allowing them to change ledger entries and spend crypto twice (essentially theft).
Different blockchain protocols and consensus algorithms weigh these challenges differently, focusing more on efficiency and speed or more on security and reliability.
What’s The Role of Distributed Consensus in Blockchain?
Is Blockchain a Distributed System?
Yes, the blockchain is a perfect example of a distributed system. It’s a decentralized ledger of transactions with no central authority.
Distributed Consensus Algorithms in Blockchain
“Being a realization of a distributed system, a blockchain system relies on a consensus protocol for ensuring all nodes in the network agree on a single chain of transaction history, given the adverse influence of malfunctioning and malicious nodes.”
(Xiao et al., 2019).
Solving the problem of distributed consensus in a new environment where participating systems do not inherently trust each other was the biggest hurdle in creating the blockchain distributed ledger system.
A mechanism needed to exist to ensure all of these systems agree on the ledger and that the blockchain can continue to operate even if some nodes fail. This would make it possible to have a truly decentralized network, providing transparency and reliability.
This problem was initially solved in practice with Satoshi Nakamoto’s launch of Bitcoin. Bitcoin uses the distributed consensus algorithm Proof of Work (PoW). Ethereum uses another common consensus algorithm, Proof of Stake (PoS).
Conclusion
Distributed consensus is the mechanism that allows the blockchain to maintain a decentralized ledger, ensuring all of the computers that verify transactions agree on the entries. The development of consensus algorithms like Proof of Work (PoW) made it possible for Bitcoin and other blockchains to exist.
Xiao, Y., Zhang, N., Li, J., Lou, W., Hou, Y. (2019). Distributed Consensus Protocols and Algorithms. Washington University, Computer Science.
https://cybersecurity.seas.wustl.edu/ning/paper/consensus19.pdf
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