Chapter 4

Exploring the Different Forms of Mining

IN THIS CHAPTER

Bullet Understanding consensus algorithms

Bullet Finding out why proof of work is the most trusted form

Bullet Surveying cryptocurrencies using proof of work

Bullet Working with proof of stake and proof of work together

In this chapter, you find out about the different consensus algorithms used in cryptocurrency. Blockchain technology distributes data across hundreds or even thousands of computers. The challenge is to ensure that each copy of the data, on all those different computers, is correct. Different mathematical algorithms can be used to create consensus — to ensure that everyone working with any particular cryptocurrency agrees on what data should be included in the blockchain and what version of the blockchain is correct.

We explain various aspects of different consensus systems: proof of work, proof of stake, hybrid proof of stake/proof of work, and others.

Proof-of-Work Algorithms

Consensus is the process of ensuring everyone’s copy of the transaction data matches — that every copy of the blockchain contains the same data. Different ...

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