Blockchain: consensus protocols

This post is the third post in a series dedicated to demystifying blockchains. The second post described the difference between permissionless and permissioned blockchains. It also introduced the concept of validator. This post will present the notion of consensus.

A consensus mechanism or protocol ensures that all nodes of the system agree to a shared, approved state. In the framework of a distributed ledger or blockchain, a consensus mechanism enforces that all participants use the same state or version of the ledger. In other words, it is the mechanism that ensures that every entity agreed on the same transactions and that all copies of the ledger are identical. Consensus protocols are not new. They at the core of many distributed systems and mirroring systems. Nevertheless, permissionless blockchains introduced a new challenge. Not all participants to a permissionless blockchain may be behaving properly.

Two kinds of consensus

There are mainly two categories of consensus mechanism:

  • Lottery-based
  • Byzantine Fault agreement-based

The first category is sometimes called the Nakamoto-consensus in honor of the pseudonym of Bitcoin’s founder Nakamoto. The consensus mechanism elects the validator, i.e., the node that decides which is the next block to be appended to the ledger. The election is a lottery draw. The winner is the validator. Each new block requires a new draw. The selection through a lottery reduces the likelihood of an ill-behaving node to validate a forged block. The lottery does not necessarily follow an equiprobable distribution. Each mechanism has its own probability distribution favoring one given characteristics of the winner. Thus, each lottery-consensus has a different trust model. The Proof of Work (PoW), used by Bitcoin, is the most well-known mechanism. There are many other types such as Proof of Stake (PoS), Proof of Space, or Proof of Elapsed Time (PoET). Future posts will explore in details PoW and PoS.

The second category is based on Byzantine Fault Tolerant (BFT) system. BFT systems are designed to operate even if some participants in the protocol are failing. Failure may be involuntary (for instance, a participating node is out of order) or voluntary (for instance, an attacker controls the failing node). BFT employs voting mechanisms to decide the consensus. The used mechanism defines the trust model. It is usually well defined. The Practical Byzantine Fault Tolerant (PBFT) mechanism is the most well-known mechanism. A future post will explore PBFT.

Hybrid consensus mechanisms seem to appear mixing lottery with a pinch of BFT. Casper, the next consensus mechanism of Ethereum is a PoS with some BFT in it.

Lottery or Byzantine Fault Tolerant?

Lottery-based mechanisms are more complex and slower than BFT-mechanisms. Lottery-based consensuses are well fitted for permissionless blockchains. There is no control on the validators. Anybody may participate in the validation. Therefore, the lottery reduces the risk. In a permissioned blockchain, the validators are known. Thus, BFT-consensuses are adequate. Depending on the mechanism, the designer knows how many validators must be compromised or must collude to validate a forged block successfully.

Research on consensus is currently an extremely active field. Unfortunately, many consensus mechanisms are (too) young and their security has not been enough studied. The following chart illustrates relative age of major consensus mechanisms.

Conclusions

If you want to manage your blockchain, then you need to understand the corresponding consensus mechanism. It participates to the trust model of your solution.

 

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