Proof of work is an algorithm whose main goal is deterring cyber-attacks such as a distributed denial-of-service attack (DDoS) which has the purpose of exhausting the resources of a computer system by sending multiple fake requests. It is a requirement to define an expensive computer calculation, also called mining, to verify the legitimacy of a transaction that needs to be performed to create a new group of trustless transactions (called block) on a distributed ledger called blockchain.
Proof-of-Stake algorithms are designed to overcome the disadvantages of PoW algorithms in terms of the high electricity consumption involved in mining operations. PoS completely replaces the mining operation with an alternative approach involving a user’s stake or ownership of virtual currency in the blockchain system.
Another consensus algorithm called Proof of Elapsed Time (PoET) is used by IntelLedger or SawtoothLake. It is intended to run in a Trusted Execution Environment, such as Intel’s Software Guard Extensions (SGX). SawtoothLake is a blockchain platform developed by Intel and subsequently open sourced for use by the community. PoET uses a lottery-based election model based on SGX, where the protocol randomly selects the next leader to finalize the block.
Hyperledger Fabric, which is the most popular permissioned blockchain platform being developed by the Linux Foundation provides a flexible architecture with a pluggable consensus model. Hyperledger currently supports two consensus models – the popular Practical Byzantine Fault Tolerance algorithm (PBFT) and its variation SIEVE that can handle non-deterministic chaincode execution.
A group of generals, each commandeering a part of the Byzantine army has surrounded an enemy city. To attack the city, all generals have to agree on a battle plan. Generals can communicate via messengers only. The messengers might be captured by the enemy and the message might never reach the other general. The difficulty in the agreement is that one or more generals might be traitors and are interested in sabotaging the battle plan. To this end, they might send false messages, distort messages or not send any messages at all. All loyal generals will act according to the plan. A small number of traitors should not cause
While there are several consortia developing industry specific variant of Blockchain implementations. Two of them seem to be emerging as leaders, if the companies joining them is any indication. While IBM took an early lead with Fabric, an implementation of Linux Foundation’s Hyperledger Project, more recently Enterprise Ethereum Alliance backed by likes Microsoft and using JPMorgan Chase’s Quorum seems to be gaining popularity. Launched 12 months ago, The Enterprise Ethereum Alliance, the world’s largest open-source Blockchain initiative, was established to connect Fortune 500 companies, Blockchain startups, academics, and industry experts together with a common goal. EEA is a non-profit industry organization that defines standards, so application built on an Ethereum-derived platform will run on all Ethereum platforms as well as support the development of enterprise tools.