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  • Consensus Algorithms
    • Proof of Work vs. Proof of Stake
      • Work costs money, energy to supply proof of work around the world. Processing power used to just guess numbers.
    • Needs to be Byzantine fault tolerant
      • The systems is designed to reach consensus without necessarily having to talk to each other
    • Proof of Work
      • used by BitCoin and currently Etherium (etherium wants to change)
      • A node has to guess the Nonce to write the block
        • The reward is currently about 12 bit coins
        • This is referred to as mining
      • The more hardware on the network the more difficult it is to guess the number
        • This is wasteful of energy and resources as farms of hardware are used to guess the random numbers
        • costs roughly $400million world wide
    • Proof of Stake
      • Etherium will move towards using this
      • Rathering finding a nonce, it uses a system of betting
      • costs about $1million to setup a node plus 
      • The block that gets voted on the most is injected into the chain
        • any fees associated with this block are split amongst the validators that bet on it
      • Creates a situation where there are only a few validator nodes, because of the costs