Wisdom Oparaocha on Consensus Mechanisms in Avalanche
A consensus mechanism is a fault-tolerant technique used in blockchain systems to obtain the necessary unanimity among distributed processes or multi-agent systems, such as cryptocurrencies, on a single data value or a single network state.
The consensus mechanism is useful for keeping track of transactions, among other things. Consensus mechanism also entails assigning a participant node responsibility for maintaining the public ledger in proportion to the number of virtual currency tokens it holds.
A practical example of the consensus mechanism is that on the Bitcoin blockchain, referred to as the Proof-of-Work (PoW), which demands computer power to solve a challenging but random problem to keep all nodes in the network honest.
Forms of Consensus Mechanisms
There are different forms of consensus mechanism algorithms that run on varying principles. Some of these include:
1. Proof of Work (PoW) which is a widely used consensus mechanism in cryptocurrency networks such as bitcoin and Litecoin.
2. Proof of stake (PoS) is another popular consensus mechanism that originated as a low-cost, low-energy alternative to the proof of work (PoW) process.
3. Proof of Capacity (PoC) allows contributing nodes on the blockchain network to share memory space. The more RAM or hard drive capacity a node possesses, the more rights it has to keep the public ledger up to date.
Avalanche Network and its Consensus Mechanism
Avalanche is a decentralised, scalable, and robust smart contract platform with a fast response time and high throughput for building custom decentralised applications. It saves energy and does not necessitate any specific computer hardware requirements. It works effectively in hostile environments and is resistant to about 51% of its attacks.
With a transaction throughput of 4,500 transactions per second, Avalanche claims to be more scalable than Ethereum. In addition, Avalanche uses Snowball, an Ava Labs-designed Proof-of-Stake (PoS) consensus mechanism that requires users to stake AVAX to become transaction validators. To participate in consensus, validators must stake at least 2,000 AVAX tokens.
In the snowball consensus mechanism, validator nodes in a subnet repeatedly ask each other to evaluate the authenticity of the network’s transactions until they reach a common decision and thereby build network-wide consensus. The higher a node’s stake in AVAX currencies, the more frequently it is queried.
The Primary Network is required for all validator nodes, while involvement in other subnets is optional. Validators are compensated based on uptime and reaction latency, with payouts proportional to their overall investment.
Therefore, validators will earn more if they keep their stake for a longer period. You will also receive a reward if you delegate your AVAX coins to a validator, and that validator obtains a reward.
A major benefit of the snowball mechanism of the Proof of Stake consensus on Avalanche is that no energy-intensive mining is needed. Rather, the Proof of Stake consensus selects a validator at random to validate data blocks where the cost of an intentional malicious error exceeds the block reward.
Forms of Validation in Avalanche Network
To choose who will validate the next block, the Proof of Stake algorithms used in the Avalanche Network employ numerous ways.
- The number of tokens staked: the more tokens staked, the more likely you will be chosen to validate.
- The age of the staked tokens: the older the tokens are, the more likely they are to be chosen to validate (once that stake is used to verify a block, its age is reset to zero)
- Random selection: to validate the next block, the lowest hash value (a string of numbers formed by a hashing technique to represent data) is coupled with the largest stake.
The Proof of Stake consensus mechanism is significant because it does not necessitate the same level of hardware energy consumption as Proof of Work networks. There is substantially less computation required in Proof of Stake networks, such as the snowball mechanism used in Avalanche.
Furthermore, the Proof of Stake mechanism removes the costly computer hardware as a barrier to entry, instead prioritising tokens stored in the network. Also, Proof of Stake lets more people participate in constructing new blocks in theory.
One major critique in Proof of Stake mechanisms for networks such as the Avalanche network is that it benefits the rich, those who own the most tokens. This is so because validators with the most tokens staked are chosen.
By Wisdom Oparaocha
Contents distributed by Learn.Block6.tech
👉 Telegram — Fresh ideas
👉 Twitter — Latest articles
