Blockchain

Unit 4 • Chapter 3

Ethereum Mining and Consensus

Summary

Blockchain technology utilizes consensus algorithms like Proof of Work (PoW) and Proof of Stake (PoS) to ensure secure and transparent transaction recording. PoW involves solving complex mathematical problems to add blocks to the blockchain, while PoS requires staking cryptocurrency to validate transactions. Delegated Proof of Stake (DPoS) lets token holders vote for delegates, achieving faster transaction speeds and higher throughput. Leased Proof of Stake (LPoS) allows users to lease their currency to delegates for rewards, promoting decentralization. However, LPoS can still be centralized if a small group of delegates control a significant amount of tokens.

Concept Check

What is a major blockchain consensus algorithm that requires solving complex mathematical problems and high computational power?

Which consensus algorithm focuses on staking cryptocurrency rather than solving complex mathematical problems?

Which consensus protocol involves token holders voting for delegates to validate transactions?