Other Consensus Mechanisms in Cryptocurrencies

In addition to the Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus algorithms mentioned in the previous article, there are other consensus mechanisms with their own functions. Let’s take a look at some of them and find out their strong points.

Proof of Activity

Proof-of-Activity is a hybrid approach that combines PoW and PoS. PoW blocks are produced together with PoS blocks, i.e. the blockchain consists of both types of blocks. Primarily, the PoW miners produce a block, and then PoS holders finish it. For example, this hybrid PoW and PoS approach is used in the YaCoin, NovaCoin, EmerCoin cryptocurrencies. Reddcoin and PeerCoin use the PoW approach for the initial distribution of coins, then the PoS approach to confirm the blocks.

Delegated Proof of Stake

Delegated Proof-of-Stake is the next step in the evolution of basic PoS consensus. Anyone who wants to confirm transactions and earn associated rewards, must fulfil the special requirements for maintaining the node and win the election, where token holders vote for a delegate. DPoS is used in Graphene-powered blockchains, such as BitShares and Steem.

Proof of Importance

Proof-of-Importance is a hybrid algorithm that uses the PoS; it depends not only on the number of coins but also on how much you active on the network. The first cryptocurrency platform to implement this was NEM (XEM).

Proof of Burn

Proof-of-Burn is when coins are sent to a special address from which they can never be spent again. It requires that you proof having burned some digital coins instead of proofing burning electricity. This is throwing coins away, literally because you send the coins to some address with a hash of a random number, for instance. You get the rights for life-time mining in exchange with throwing away the coins. The more you throw away, the more your chances. The Slimcoin cryptocurrency uses this consensus.

Proof of Space

Proof-of-Space algorithm relies on using more megabytes as resources where the mechanism allocates a significant volume of hard drive space on the user machine in order for the user to start mining. This method is implemented in the BurstCoin.

Proof of Storage

Proof-of-Storage is similar to Proof-of-Space, the only difference is that blockchain participants use the allocated disk space as a decentralized cloud storage. This method is implemented in the Storj service.

Developers create new consensus mechanisms from time to time for use in specific projects and cryptocurrencies or even just as a charitable act based purely on altruism and towards the development of the crypto world.