SteemitCryptoAcademy: Consensus Algorithms @alphafx: Homework Submission

chetanpadliya (71)in SteemitCryptoAcademy • 3 years ago (edited)

Assignment on Proof of Elapsed Time Consensus Algorithm

Day by day it is going very interesting to learn something new about crypto in the Crypto Academy. At the first sight, this topic of Consensus Algorithms was looking very difficult to me but I decided that I will study it thoroughly and complete the assignment.

What is Consensus Algorithm in Blockchain Technology?

As far as I understood after attending the class Consensus Algorithms is the backbone of any blockchain or we can say the principle on which that particular blockchain runs.

Literally, if we try to understand Consensus Algorithms it is Consensus + Algorithms.
Consensus means to agree on some point or issue and an Algorithm is an endless sequence of well-defined, computer-implementable instructions, specially designed to perform a computation task.

Technically we can say that Consensus Algorithms are a set of sequences or can say a programme that designed to reach a reliable consensus among a group of people or nodes

Steemit Crypto Academy - Season 2, Week 4 (1).png

What is Proof of Elapsed Time Consensus Algorithm?

After Bitcoin was introduced, the main concern was the consumption of energy in mining Bitcoin. Bitcoin blockchain is based on a PoW consensus algorithm which consumes a lot of energy. So after the introduction of Bitcoin different type of consensus algorithms was introduced and the main focus was on how to reduce power consumption in mining any crypto.

This new consensus based on Byzantine Fault Tolerance i.e. system doesn't stop even if some of the nodes fail or act maliciously.

Proof of Elapsed Time (PoET) consensus algorithm is also one of the many algorithms experimented after the PoW algorithm.

In 2016 leading chip manufacturer Intel developed PoET for permissioned blockchain networks.

PoET is based on the time factor. The node generates the least time to sleep win the block.

What is permissioned blockchain networks?
It is completely different from any public and private blockchains in the way that it is a type of security system. In such blockchains validation done by certain identifiable participants only. It is mostly used in industry-level enterprises and businesses.

How PoET consensus algorithm works?

As the name suggests Proof Of Elapsed Time, this algorithm uses a randomly generated Elapsed Time ( a type of lottery system) to decide mining rights and block winners on a blockchain network. This lottery system or random generation of elapsed time is verified by external participants which makes it more reliable.

Each node in the network generates a random elapsed time and for that allotted time system goes to sleep. It helps to make the blockchain energy efficient. The winner of the block is decided by the shortest duration of elapsed time which starts to work first and add a new block in the blockchain.

The two most important things in the PoET algorithm is that nodes should generate genuinely a random time of elapsed and secondly must go to sleep for that particular time. These important activities are verified by identified external participants.

PoET v/s PoW consensus algorithm

Proof of Elapsed Time	Proof of Work
Miners compete for elapsed time	Miners compete to solve the complex problems
Nodes go to sleep during elapsed time	Nodes work with full efficiency
Energy consumption decreases drastically during mining	Energy consumption at peak during mining
Low mining cost	High mining cost
Limited uses	Vast uses

Advantages of PoET consensus algorithm

It is not resources intensive, instead of that it saves energy consumption by going to sleep as a mining process.
Highly efficient and can be scalled up to thousand nodes without extensive efforts. Can be used as a “plug and play” model.
Provide excellent solution to the “Random Leader Selection Problem” without requiring complex staking mechanics and incentive structures which is a necessary requirement with proof of stake consensus.

Disadvantages of PoET consensus algorithm

It works on Software Guard Extensions (SGX) technology which is an innovation of Intel corporation.
Depending on any third party like Intel for trust is against the blockchain principle.

Conclusion

I am not at all an expert of blockchain technology but at a newbie stage. I tried my best to understand consensus algorithm by attanding the class and later did an extensive research to understand the PoET consensus algorithm to complete the assignment given by the professor.

Thank you professor @alphafx for this brainstorming session.