A review on consensus algorithm of blockchain

Blockchain is the basic technology of bitcoin. With the value appreciation and stable operation of bitcoin, blockchain is attracting more and more attention in many areas. Blockchain has the characteristics of decentralization, stability, security, and non-modifiability. It has the potential to change the network architecture. The consensus algorithm plays a crucial role in maintaining the safety and efficiency of blockchain. Using a right algorithm may bring a significant increase to the performance of blockchain application. In this paper, we reviewed the basic principles and characteristics of the consensus algorithms and analyzed the performance and application scenarios of different consensus mechanisms. We also gave a technical guidance of selecting a suitable consensus algorithm and summarized the limitations and future development of blockchain technology.

I. Introduction

The blockchain was firstly introduced in the treatise [1] “Bitcoin: A peer-to-peer electronic cash system” by Satoshi Nakamoto in 2008. It is the underlying technology of bitcoin. The traditional transactions require a centralized trusted institution. The confirmation and record of the transactions depend entirely on the trusted institution, which may cause many problems of transaction cost, efficiency, and security. Decentralization is the core feature of blockchain and it can be used to solve these problems. All the nodes in the blockchain have equal status. These nodes achieve consensus by using the prior agreement of the rules and following the principle of majority dominance. They implement the functions of data distributed storage and transaction information recognition in the situation that the other nodes are not fully trusted. So we can effectively solve the transaction problems.