Web3 Glossary- X factor of web3?
Xcuse me? Here for some web3 gyaan? Delve in to explore how blockchain networks reach an agreement and enable this decentralised web that we all are fascinated about
Gm Gm folks!
How’s the Josh? Did you say high ser ALREADY?
Well, in today’s edition of web3glossary we dont have any terms with X so it’s time to learn some web3 concepts.
What do you think about this?👇👇
If you’ve read the daily digest of web3 bits n bytes, I am sure you know consensus mechanisms are the real deal for the blockchain systems.
Blockchain actually does wht it stands for! Time to bust the myths around this. 👇
Consensus mechanisms ensure that all the transactions on the network are genuine & all participants agree on a consensus on the status of the ledger. Cause after all it’s a decentralized network, not owned by any single authority.
PoS and PoW are the most commonly known.
Today we look at couple of their frens: PoA, PoB, PoC and PoH 💯💯
Sounds like some chemical formulas? Wait ‘til you read further👾👾
If ya’ll need some background on consensus algos, check out this letter post on PoS vs PoW
We’ve already got PoS & PoW, Why do we need more algos?
Both PoS and PoW have their fair share of pros and cons, let's look at how other cosensus algos differ and fill those gaps 👇👇
PoA: Proof of Activity (not authority)
To verify participant’s blocks, it combines its tokens to allow both mining and staking. The blocks themselves do not contain any transactions
They’re just empty templates embedded with transaction title & block reward address
The information in the txn header is used to randomly select a validator node to sign the block & confirm it to the blockchain ledger, and only token holders are eligible to be validators
Then, the network security fee is split between the miners & validators involved in processing & signing the block.
📌Pros
Helps reduce the probability of a 51% attack as its structure makes it practically impossible to predict which validators will sign a block at each future iteration.
📌Cons
Significant energy is still required to mine blocks during the PoW phase of this algo, & large token holders still have a disproportionately high signing chance.
👉Used by Decred Project & Espers Coin
If you said yes, you’re correct! We have PoB 👇
PoB: Proof of Burn
In this consesus algo, miners intentionally and permanently destroy tokens in order to obtain a proportional right to mine new blocks and verify transactions that it does.
The more tokens a miner burns, the higher the chance that the miner will be selected as the next block validator👀
An easy to understand infographic by CoinTelegraph
📌Pros
👉Less power and energy consumption
👉Motivates miners to make regular transactions using cryptocurrency
👉More sustainable & doesn’t need hardware for heavy computation
📌Cons
Not an initial consensus algorithm
Requires a number of wealthy participants to burn their coins in the network
👉Used by slmcoin & factom
PoC: Proof of Contribution
It recognizes the contributions of all active nodes within a network during each consensus round and relies on proprietary algorithms to track it.
It then grants the nodes with the highest contribution value, the right to create the next block
Within a PoC consensus mechanism, users wishing to perform an on-chain calculation must give a security deposit before doing so😮💨
Each user’s contribution level is a function of that user’s track record & stake as well as the accuracy of the calculated result for any given action! Isn’t that a great idea?
📌Pro
👉Provides an energy-efficient cryptocurrency method
👉Minimizes mining energy usage by rewarding the complexity of solving a cryptographic challenge
Buzz show Network uses PoC to reward its users for every action on the platform from watching, sharing to uploading videos
PoH: Proof of History
This mechanism creates historical records that prove a transaction occurred at a specific moment
It’s a network-wide, permissionless source of time that operates before consensus👇👇
PoH is not a consensus mechanism but a cryptographical solution to track time by creating timestamps in a blockchain network
📌Pros
👉Near-zero fees and speedy transactions: Lower prices and faster transactions make the blockchain favorable for large transactions
👉Ensures efficient delivery and reassembly of all relevant transaction data without the need to wait for sequential block confirmations across the entire network
This one is used by Solana which is able to achieve extremely fast confirmation times without sacrificing security and still maintaining a relative degree of decentralization. Solana, actually uses both PoS and PoH, PoS lets participants stake their coins, while PoH ensures leaders of slots confirm transactions following the correct order.
Looks like we got another one on the list😜
The best one yet? 🤣🤣
Well, that’s a wrap for today! Do we all have a consensus on that :p
Stay tuned for more on the new vocabulary of the web.💯
It’s a free crash course on the jargons and terminologies in Web3 direct to your email🤩🤩
As ever, thank you for subscribing and reading. It matters. It’s a big deal to me.
And, remember, half-true compliments and feedbacks are always welcome at:
laisha.wadh [at] gmail [dot] com
WAGMI 🚀🚀