Bitcoin is one of the most popular and most widely used block chain that is used on the internet, it provides a secure method of sharing virtual currency on the net. There are various protocols and algorithms that are used in blockchains. Some of them are discussed below.
• Proof of work (POW)
Pow was introduced to tackle the problems of related to emails and emailing spamming, this method is widely used in blockchains like cryptocurrency. Various methods to improve POW was planned like combining Proof of work and Proof of stake to create an environment that can support its both the features at a same time. It can easily solve various complex problems like maths puzzle. A puzzle solving method requires a good amount of calculating power to solve it, so therefore the first node which is used for solving the puzzle is transferred for mining to the next block. So, by providing computational power, the data is scanned every 100th block which helps to solve most of the errors and bugs encountered on the way.
• Proof of stake (POS)
POS is used for validating an ownership of user about the virtual currency like bitcoin, it does not provide computational power like proof of work. It is one of the methods that is used for solving energy consumption that is currently occurring in protocols like thorium and bitcoin. In POS in each block a person or leader is chosen randomly which can hold the stake of the bitcoins. The person can also be called as stakeholder.
The stakeholder can invest in the virtual currency which it requires in order to overcome the claim of ownership of any of the other person. POS is cost and energy efficient but it does not provide same power level as POW. The stakeholders can hold large stakes of the crypto currency it means that no one would be able to bid or claim that stake. It is especially a big problem for the people which are relatively new in the market. This protocol method is usually used when there is need for increasing the network size in terms of scalability.
• Delegated Proof of stake (DPOS)
DPOS is relatively new protocol that is used in blockchains it is based on POS and POW protocols. The main purpose of implementing and using DPOS is that it provides the security of the network in which the payments and transactions occurs in form of currencies or stakes.
In DPOS the virtual currency can be claimed by the means of voting which means that each person has equal rules and rights for acquiring the stakes of cryptocurrency. The pros of using DPOS is that energy load in the currency network is minimum which help to save energy loads in the network.
• Practical Byzantine Fault Tolerance (PBFT)
PBFT is aberrative as Practical Byzantine Fault Tolerance is a protocol that is used by providing the efficiency to the faulty Byzantine tolerant algorithm. It is a message-based algorithm which has three phases of tolerance after the process the agreement is done regarding the cryptocurrency. In PBFT the nodes should be known by the user and had to set up the nodes manually. Because of this problem, it is very hard to deploy the algorithm on the public networks.