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What Are The Most Common Consensus Algorithms Run By Blockchain Business Models?
In distributed systems, consensus algorithms enable users across the system to agree on a single decision as the system evolves. As a result, consensus algorithms play a key role in Blockchain-based businesses as they enable the underlying protocols to process transactions and make more important strategic decisions. The most important consensus algorithms are proof of work (Bitcoin, Ethereum 1) and proof of stake (Ethereum 2).
Proof of work was the major and most successful consensus algorithms that resulted from Bitcoin’s underlying Blockchain. Indeed, this was first envisioned in Satoshi Nakamoto’s White Paper (the practical application, as the theory behind it, was developed a few decades earlier).
The proof of work consensus algorithm would also become the foundation to Ethereum 1, the first iteration of Ethereum. However, as Ethereum is rolling out at scale, a Proof of Stake algorithm between 2022 and 2024 will make Ethereum transition toward a more hybrid model, relying on both proof-of-work and proof-of-stake.
Proof of Stake In A Nutshell
Other blockchains that leveraged proof-of-stake consensus algorithms comprised Steem, which used to own the Steemit site, then took over by TRON.
Other consensus algorithms
Other consensus algorithms comprise proof-of-activity, proof of authority, proof of burn and a few more.
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