Understanding and Analyzing Consensus Algorithms for Blockchain

Abstract

Over the past decade, ever since the advent of Bitcoin, the first cryptocurrency to enter the market and amid growing privacy concerns in the digital space, blockchain as a technology has grown immensely in popularity as a means of decentralized networking. A consensus algorithm, which in a decentralized network acts as a means for the nodes to arrive at an agreement on the state of data and any changes made to it, forms an integral part of the blockchain technology. However, with the increasing number of these algorithms, there is an urgent need to study them in a systematic way, which will enable us to select an algorithm suited to our needs. In this paper, we study and analyze 17 consensus algorithms and compare them on various parameters like energy requirement, scalability, specialized hardware requirement, etc. and present our findings in a tabular form. We further present our observations on the suitability of the consensus algorithms.