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Blockchain Technology

jeopardised.. Everybody in the world can freely use open blockchains. True decen­

tralization is the mutual network ledger (Casino et al., 2019; Samaniego et al., 2016;

Pilkington, 2016). Figure 11.5 illustrates the difference between public and private

blockchains.

11.2.4  Consensus Algorithm

Consensus algorithms are essential innovations of blockchain. Blockchain consensus

can be fault-tolerant and accurate. The consensus algorithm is explained in six con­

sensus algorithms (Yuan and Wang, 2016).

11.2.4.1  Proof of Work (PoW)

The PoW consensus algorithm is used in cryptocurrencies such as Bitcoin and

Litecoin. The original purpose of the organization was to remove spam in the net­

work. The PoW algorithm’s idea is to allow the participant to use computing power

and economic resources while performing the PoW algorithm. The packets that the

nodes exchange must be complicated and entail a mathematical challenge to deter­

mine their contents.

11.2.4.2  Proof of Stake (PoS)

A community of auditors performs an audit, documents any block of data on the

blockchain, and then uses the web of confidence to relay votes about the block to

the larger group of auditors. The PoS algorithm’s key advantages include improved

security and increased energy performance.

11.2.4.3  Delegated Proof of Stake (DPoS)

This algorithm is closer to PoW and PoS algorithms. Each elector can create several

nodes that shape the democratic consensus. It efficiently preserves the entire device,

its elements and its interdependencies.

FIGURE 11.5  Private and public blockchains.