Blockchain technology has recently emerged in a big way and has shown tremendous potential to change the world as we know it.
These are protocol rules, consensus, ledger, and cryptography. One of the most worked upon pillar has been consensus, where we see many options including Proof of Work, Proof of Stake and others. Consensus is an area which technology enthusiasts continue to try perfecting.
The consensus pillar forms a very important consideration for blockchain because of the following reasons:
- Blockchain offers the capability to run a transaction in a trustless environment, and involve as many players (e.g. nodes) in the process as possible. There needs to be an agreement i.e., the consensus among all the players to conclude and process any transaction. In the absence of this, transactions get stalled;
- Consensus models define the security of the blockchain by maintaining consistency across the shared state of the blockchain;
- The blockchain is built around the principle of fault tolerance. Consensus models offer fault tolerance capability to the network, and this capability can differ based on the type of consensus model being used;
- Consensus models also ensure the liveliness of the network by making certain that all the correct nodes are participating to eventually produce a value.
In a nutshell, blockchain without consensus models cannot serve the purpose it has been designed for, as the core of trust protocol on the network is driven through consensus models. Implementations can be different with varying consensus models over private or public networks, however, the presence of a consensus model remains essential to the blockchain.
While blockchain’s reliance on a consensus model is high, it’s not necessarily the same case or the other way round. Consensus algorithms like Proof-of-Work (PoW), Directed Acyclic Graph (DAG), etc. have existed for a very long time, and have survived the pre-blockchain era. Many of these algorithms, when designed initially were not created taking blockchain into consideration. These were created for different purposes including, military and medical. However, the applicability of these algorithms into blockchain has been very meaningful, and thus, consensus models have grown in popularity throughout the last few years.
Along with this dependency, blockchain also realizes the risk of dealing with changes in consensus models across integrated, interoperable networks. There are many challenges that networks may face with changes in consensus models:
- Forking: Changes in consensus models can cause forking of the blockchain network; splitting it into multiple parallel networks and thus, diminishing the total value. Forking would also result in splitting the user community that forms the basis of the network’s success.
- Performance: Based on the design of the consensus algorithm or on the changes being done, it may require more time under certain conditions for consensus to converge. These conditions could be dynamic where other nodes have turned malicious or a network partition has delayed messages that were exchanged between nodes. This could manifest as inconsistently high latencies in applications.
- Security: Considering the interoperability among the networks, security issues of one network can easily be slid into another network with smart contract integrations or calls. This may undermine the security of the complete network.
- Cost of participation: Some of the consensus models have the cost of participation that can be in the form of infrastructure, computing power, etc. Changes in the consensus model can change the participation cost, which can have a significant impact on the base network, as well as, networks interoperating with the base network.
- Scalability: Consensus models can have a high impact on the scalability of the network based on how easy or difficult the scalability is to achieve. This issue can easily spill over the integrated networks and can have replicating effects across the complete network.
Change in consensus models for the blockchain networks which are already on (live blockchain networks), can be an extremely challenging situation considering the security, performance and functional challenges that come along with it. Thus, selecting the right consensus model considering aspects such as public vs private network, real-world use, players (trustful vs untrusted), etc. is critical.
In summary, consensus models form the core of the blockchain networks, which can have a strong influence on the design and overall capability of the blockchain, even defining the success or the failure of the blockchain network. It is also a widely invested field with many frequent advances. There is surely a place for better consensus models in this technology, and we can expect to continue seeing new capabilities shaping up in the near future enabling use cases that look difficult today.
To learn more about blockchain, feel free to connect with me on social media.