- A database with a decentralized, verifiable, tamperproof ledger of transactions.
- Enables peer-to-peer transactions secured by cryptographic algorithms and a consensus mechanism.
- The data concept of ‘blockchain’ is the method in which as a new block is added to the ledger, it references the previous block. Therefore, you can go back in time, by way of the ‘chain’ of timestamp/references which ensures it can never be broken
Consensus Mechanisms (Mining)
- Currently there is tremendous work being done on consensus mechanisms because the existing method for mining (verifying and building the chain) is slow.
- To clarify ‘slow’ – a new block (max 1MB worth of transactions) is created approx. every ten minutes, as compared to the Visa network (and other major banks) which can process thousands per second.
Consensus Mechanism Methods
- Proof of Work (Bitcoin, Ethereum)
- Proof of Stake (Ethereum 2.0, Binance)
- Proof of History (Solana SOL)
- Proof of Authority (VeChain)
- Proof of Coverage (Helium)
And More To Come
More mechanisms will evolve over time as needs change – some of these concepts include:
- Delegated Proof of Stake
- Proof of Elapsed Time
- Proof of Burn
- Proof of Vote
- Proof of Importance
- Direct Acyclic Graphs (DAGs)
- Proof of Activity