Bryant Nielson | August 28, 2023
Proof of Work (PoW) and Proof of Stake (PoS) are the two dominant blockchain consensus models today. However, they each have drawbacks that have motivated researchers to develop innovative new mechanisms. Scalability, security, decentralization – no consensus protocol perfectly optimizes for all. As blockchain technology matures, projects are testing and deploying novel consensus models in pursuit of the ideal.
Proof of Authority
Proof of Authority (PoA) consensus grants block creation rights to approved validator nodes. Validators stake their identity rather than coins. Nodes are vetted to ensure they meet reputation, security and domain knowledge requirements.
PoA offers transaction finality in seconds and minimal computational overhead. It enhances scalability by limiting the validator pool. However, doing so sacrifices decentralization and introduces an element of centralized trust through the validator approval process.
PoA is often used for private blockchains. Major adopters include VeChain and Polygon. Its reputation-based validity makes it well suited for supply chain and enterprise use cases.
Proof of Burn
In Proof of Burn, miners send coins to irretrievable “eater” addresses to demonstrate a commitment to the network. The more coins burned, the greater chance a miner has of being selected to create a block. Burning scarce coins signals that miners have skin in the game.
Proof of Burn is energy efficient since no electricity is wasted crunching cryptographic puzzles. However, some view coin burning as environmentally unfriendly since computational energy is permanently destroyed. Slimcoin pioneered proof of burn but it hasn’t seen widespread adoption yet.
Proof of Capacity
Also called Proof of Space, Proof of Capacity has miners allocating disk space instead of computation to demonstrate commitment. The more hard drive space allocated, the higher chance of being randomly selected to mine the next block.
Proof of Capacity opens mining to those with extra disk capacity rather than expensive ASICs. Filecoin and Chia are popular cryptocurrencies using this method. However, Proof of Capacity has raised concerns about e-waste from discarded hard drives.
Proof of Elapsed Time
Developed by Intel, Proof of Elapsed Time (PoET) utilizes Trusted Execution Environments (TEEs) built into Intel CPUs to provide randomness and leader election. TEEs ensure a fair lottery without needing proof of work.
However, PoET’s reliance on Intel hardware makes it less decentralized. It saw experimental adoption by Hyperledger Sawtooth before development stalled. Still, its novel use of TEEs points towards new directions for consensus models.
Proof of Believability
Proof of Believability seeks to strike a balance between Proof of Work’s incentives and Proof of Stake’s resource efficiency. Miners expend minimal computational work to get randomly selected as validators. Their “believability” score determines selection weight.
Once validators attest to block accuracy, they’re rewarded from an inflationary pool. However, their believability score drops over time, eventually pushing them out of contention until they mine again. IOV Blockchain pioneered this mechanism.
Why So Many Models?
No consensus method is perfect, hence the proliferation of alternatives. Hybrid models like Decred (PoW/PoS) and Proof of Activity (PoW/PoS) also combine aspects of multiple protocols. The search continues for the holy grail – scalability, decentralization, security and efficiency.
While PoW and PoS dominate, stigma against their flaws motivates developers to keep innovating. Networks constantly balance between bandwidth, security, community values and other elements in designing incentives. As blockchain technology matures, the right consensus model depends heavily on the project’s goals. The diversity of options allows customization but also creates complexity in navigating trade-offs.
These are just some emerging consensus models pushing blockchain forward. The field continues to rapidly evolve with new innovations like proof of space-time, avalanche, hashgraph and others. The perfect mechanism likely doesn’t exist. But blockchain consensus keeps progressing down new and unexpected paths.