Blockchain: Is it a hype or a hoax?  11

power and energy consumption to solve the puzzle. This in effect

costs a lot of investment; hence, the big players acting as mining

pools control the highest % as miners. Therefore, in theory, these

big mining pools can simply team up with each other and launch

a 51% attack on the Bitcoin network.

• Proof of Stake (PoS): PoS uses the concept of validators rather than

miners. Validators will start validating the blocks. The creator of the

new block is chosen in a deterministic way, and it depends on their

wealth, i.e. stake, which is locked up in a wallet while you are stak-

ing (funds cannot be moved while you are staking). The PoS valida-

tor takes the transaction fees rather than an award. However, if you

attempt to cheat by proposing or validating invalid transactions, you

will lose a portion or all of the reserved stake. PoS is fast and cost-

effective as compared to PoW. Ethereum 2.0 is planning to migrate

from PoW to PoS.

• Proof of Authority (PoA): In PoA, the right to generate new blocks

is awarded to nodes that have proven their authority to do so. These

nodes are also referred to as validators. They run software that allows

them to put transactions in blocks. PoA consensus leverages the value

of identities which effectively means they are not staking coins but

their own reputation on the network instead. PoA is also secured by

the trust in selected identities.

• Delegated PoS (dPoS): The Delegated PoS (dPoS) consensus algorithm

comes with a voting system where stakeholders vote for a few del-

egates who will be responsible for achieving consensus during the gen-

eration and validation of new blocks. dPoS algorithms are faster than

PoW or PoS algorithms.

• Practical Byzantine Fault Tolerance (PBFT): We have already gone

through the Byzantine general problem. This concept of Byzantine

general problem facilitated the innovation PBFT algorithm mech-

anism. This consensus mechanism is being used by Hyperledger

Fabric.

• Proof of Elapsed Time (PoET): The PoET consensus algorithm is

also known as PoET. This consensus mechanism is often used on

permissioned blockchain networks. It is based on the principle of

a fair lottery system where every single node is equally likely to be

a winner. The PoET consensus mechanism is based on spreading

the chances of winning fairly across a huge possible number of net-

work participants. In PoET, each participant node in the network

is required to wait for a randomly chosen time period. The first

one to complete the designated waiting time wins the new block.

The winning node then commits a new block to the blockchain and

broadcasts the necessary information to the whole peer network.

The PoET concept was invented by Intel in 2016. PoET is used by

Hyperledger Sawtooth.