ArticlePDF Available

Proof-of-Stake Consensus Mechanisms for Future Blockchain Networks: Fundamentals, Applications and Opportunities

Authors:

Abstract and Figures

The rapid development of blockchain technology and their numerous emerging applications have received huge attention in recent years. The distributed consensus mechanism is the backbone of a blockchain network. It plays a key role in ensuring the network, s security, integrity, and performance. Most current blockchain networks have been deploying the Proof-of-Work consensus mechanisms, in which the consensus is reached through intensive mining processes. However, this mechanism has several limitations, e.g., energy inefficiency, delay, and vulnerable to security threats. To overcome these problems, a new consensus mechanism has been developed recently, namely Proof-of-Stake, which enables to achieve the consensus via proving the stake ownership. This mechanism is expected to become a cutting-edge technology for future blockchain networks. This paper is dedicated to investigate Proof-of-Stake mechanisms, from fundamental knowledge to advanced Proof-of-Stake-based protocols along with performance analysis, e.g., energy consumption, delay, and security, as well as their promising applications, particularly in the field of Internet-of-Vehicles. The formation of stake pools and their effects on the network stake distribution are also analyzed and simulated. The results show that the ratio between the block reward and the total network stake has a significant impact on the decentralization of the network. Technical challenges and potential solutions are also discussed.
Content may be subject to copyright.
A preview of the PDF is not available
... Although PoW is widely adapted, but the major issue in PoW is its overconsumption of energy. Sunny King shared the idea of PoS in 2012 [16]. The motivation behind the selection of any proposed block is the stake of any validator/miner and its random selection. ...
... It was initially used for countering email spamming by attaching a solution to it Byzantine Fault Tolerance [14] It eliminates one of the most common problems in blockchain networks which occurs due to the erroneous behavior of the nodes in the distributed ledger. This is a Byzantine fault Proof of Stake [16] It is built upon the motivation that the selection of any proposed block will primarily be determined via the stake of any validator/miner Delegated PoS [19] It minimizes the number of representatives in a chain Proof of Burn [21] It lets miners save their time and energy Proof of Space [22] It is an extension of PoW and makes use of the disk space of the network for computational purposes Proof of Importance [23] It is also an extended version of Proof of Stake (PoS). In this algorithm, nodes are rated in accordance with their stake Proof of Weight [24] This algorithm attaches weight to each user which is calculated by taking many other factors into consideration Round Robin Consensus Algorithm [26] This is mostly used in permissioned blockchain networks. ...
Article
Full-text available
In the current era, blockchain has emerged as one the best and promising technology. All the cryptocurrencies have also gained a lot of popularity around the globe which are based on blockchain technology. Blockchain provides a distributed architecture, in which transactions are verified by different validators using different algorithms and then are stored in distributed ledger. The verification of transactions is done using consensus algorithms which verifies that incoming transaction is correct and reliable by different distributed nodes working in a peer-to-peer network. Consensus algorithms ensure the integrity and security of blockchain. There are various types of consensus algorithms used in blockchain technology which are used depending on the architecture and usage, some of the consensus algorithms are Proof of Work (PoW), Proof of Stake (PoS) etc. The Proof of Work algorithm is most widely used across the globe by the community. It is used by many popular cryptocurrency networks like Litecoin and Bitcoin. It requires larger computation power while verifying transactions. The selection of a consensus algorithm is one the most important parts of blockchain, as the consensus mechanism is considered to be the core of a network. It is easier to predict and guarantee the security, reliability, fault tolerance, and recoverability of the system if the correct consensus protocol is selected. A single algorithm can never fulfill all the requirements, there is always a tradeoff in the selection of consensus algorithms. Therefore, it is very important to select the best suited consensus algorithm for the network as the consensus mechanism validates transactions without any third-party platform and prevents malicious activities in the network. This paper investigates the comparison among types of consensus algorithms and their effectiveness and viability.
... As an architecture, Ethereum offers a stateful design, meaning that it records all transactions in their current, existing state. After "the merge" (i.e., the transition from Proof-to-Stake (PoW) to Proof-of-Stake (PoS)) was finalized on 15 September 2022, there was 99% less energy consumption for ETH, as expected [42]. This solved a major problem, as in PoW, one transaction used 200.05 kWh and the entire Ethereum network accounted for about 0.2% of the worldwide electricity consumption [43]. ...
Article
Full-text available
In this study, we explore the challenges and potential solutions to blockchain-based voting. As a first step, we present a comparison of the relevant platforms for implementing smart contracts in decentralized applications (dApps). We analyze the top platforms, highlighting their advantages and disadvantages, their architecture, and which are more reliable for developing smart contracts. The goal is to find a technology that offers various facilities to the developer and multiple functionalities and performance in the development of smart contracts in a field that has seen an incredible pace of innovation. Based on the findings from our research, we propose a framework based on blockchain technology and smart contracts for university-level voting based on blockchains.
... It also allows for more transactions to be included in a block than PoW or PoS. However, DPoS still has the disadvantages of less decentralization than PoW as well as security concerns [29]; however, it generally assists in providing faster processing-based transactions of around 3 s [28]. ...
Article
Full-text available
Security and a decentralized system are identical unique features of Blockchain. In recent times, blockchain-based cryptocurrency has become mainstream, but the growth and value of transactions and application services remain volatile. Among all these applications, finding a fast consensus in a large-scale blockchain network frequently requires extreme energy for huge computations and storing the complete blockchain for verification. These problems prevent further commercialization. Here, we present a solution to this problem. In this paper, we introduce a revised blockchain consensus algorithm, PDPoS, to address the scalability and transaction efficiency limitations. The symmetry in between Proof of Stake (PoS) and Delegated Proof of Stake (DPoS) is PoS. However, their ways of working are dissimilar. Here, we review the existing consensus algorithms, such as Proof of work (PoW), PoS and DPoS, as they are directly relating to our proposed work: PDPoS. We highligh Delegated Proof of Stake (DPoS)–based crypto-currencies, as they have much higher transactions per second (TPS) than PoW-based currencies. Then, we describe our proposed works and the working steps of the proposed PDPoS. Simulation results of the proposed PDPoS with two layers result in improved efficiency. We used TPS as the evolution criteria for showing that the proposed PDPoS is more efficient than DPoS. This makes the proposed work more relevant to the large-scale blockchain network as it is more efficient and requires less energy consumption.
Article
The distributed consensus mechanism is the backbone of the rapidly developing blockchain network. Blockchain platforms consume vast amounts of electricity based on the current consensus mechanism of Proof-of-Work (PoW). Here, we point out a different consensus mechanism named Proof-of-Stake (PoS) that can eliminate the extensive energy consumption of the current PoW-based blockchain. We comprehensively elucidate the current and projected energy consumption and carbon footprint of the PoW- and PoS-based Bitcoin and Ethereum blockchain platforms. The model of energy consumption of PoS-based Ethereum blockchain can lead the way toward the prediction of other PoS-based blockchain technologies in the future. With the widespread adoption of blockchain technology, if the current PoW mechanism continues to be employed, the carbon footprint of Bitcoin and Ethereum will push the global temperature above 1.5 °C in this century. However, a PoS-based blockchain can reduce the carbon footprint by 99% compared to the PoW mechanism. The small amount of carbon footprint from PoS-based blockchain could make blockchain an attractive technology in a carbon-constrained future. The study sheds light on the urgency of developing the PoS mechanism to solve the current sustainability problem of blockchain.
Article
Full-text available
Blockchain was presented as the underlying technology for digital currencies between untrustworthy parties. Today, its transformative potential is constantly compared to that of the Web, and practitioners and researchers from all domains are investigating how to use blockchain technology to deal with long-standing issues related to data integrity, transparency, and trust. Many studies and case study findings suggest that many industries are already investigating the numerous benefits of blockchain technology. An examination of how other industries use blockchain could aid in understanding how to fix similar problems in the construction industry. This paper examines the feasibility of using blockchain in the construction sector. According to the study results, block chain and its abilities are developed enough then to endorse many use cases in the construction sector, and the industry's resistance to new technologies being adopted appears to be the only barrier. Building information modeling and supply chain management (SCM) are two significant areas where blockchain technology might have a larger & immediate effect.
Article
Full-text available
The past decade has witnessed the rapid evolution in blockchain technologies, which has attracted tremendous interests from both the research communities and industries. The blockchain network was originated from the Internet financial sector as a decentralized, immutable ledger system for transactional data ordering. Nowadays, it is envisioned as a powerful backbone/framework for decentralized data processing and data-driven self-organization in flat, open-access networks. In particular, the plausible characteristics of decentralization, immutability, and self-organization are primarily owing to the unique decentralized consensus mechanisms introduced by blockchain networks. This survey is motivated by the lack of a comprehensive literature review on the development of decentralized consensus mechanisms in blockchain networks. In this paper, we provide a systematic vision of the organization of blockchain networks. By emphasizing the unique characteristics of decentralized consensus in blockchain networks, our in-depth review of the state-of-the-art consensus protocols is focused on both the perspective of distributed consensus system design and the perspective of incentive mechanism design. From a game-theoretic point of view, we also provide a thorough review of the strategy adopted for self-organization by the individual nodes in the blockchain backbone networks. Consequently, we provide a comprehensive survey of the emerging applications of blockchain networks in a broad area of telecommunication. We highlight our special interest in how the consensus mechanisms impact these applications. Finally, we discuss several open issues in the protocol design for blockchain consensus and the related potential research directions.
Article
Full-text available
Vehicular networks enable vehicles to generate and broadcast messages in order to improve traffic safety and efficiency. However, due to the non-trusted environments, it is difficult for vehicles to evaluate the credibilities of received messages. In this paper, we propose a decentralized trust management system in vehicular networks based on blockchain techniques. In this system, vehicles can validate the received messages from neighboring vehicles using Bayesian Inference Model. Based on the validation result, the vehicle will generate a rating for each message source vehicle. With the ratings uploaded from vehicles, Roadside Units (RSUs) calculate the trust value offsets of involved vehicles and pack these data into a “block”. Then, each RSU will try to add their “blocks” to the trust blockchain which is maintained by all the RSUs. By employing the joint Proof-of-Work and Proof-of-Stake consensus mechanism, the more total value of offsets (stake) is in the block, the easier RSU can find the nonce for the hash function (proof-of-work). In this way, all RSUs collaboratively maintain an updated, reliable, and consistent trust blockchain. Simulation results reveal that the proposed system is effective and feasible in collecting, calculating, and storing trust values in vehicular networks.
Article
Full-text available
In Industrial Internet of Things (IIoT), Peer-to-Peer (P2P) energy trading ubiquitously takes place in various scenarios, e.g., microgrids, energy harvesting networks, and vehicle-to-grid networks. However, there are common security and privacy challenges caused by untrusted and nontransparent energy markets in these scenarios. To address the security challenges, we exploit the consortium blockchain technology to propose a secure energy trading system named energy blockchain. This energy blockchain can be widely used in general scenarios of P2P energy trading getting rid of a trusted intermediary. Besides, to reduce the transaction limitation resulted from transaction confirmation delays on the energy blockchain, we propose a credit-based payment scheme to support fast and frequent energy trading. An optimal pricing strategy using Stackelberg game for credit-based loans is also proposed. Security analysis and numerical results based on a real dataset illustrate that the proposed energy blockchain and credit-based payment scheme are secure and efficient in IIoT.
Article
Full-text available
BlockChain (BC) has attracted tremendous attention due to its immutable nature and the associated security and privacy benefits. BC has the potential to overcome security and privacy challenges of Internet of Things (IoT). However, BC is computationally expensive, has limited scalability and incurs significant bandwidth overheads and delays which are not suited to the IoT context. We propose a tiered Lightweight Scalable BC (LSB) that is optimized for IoT requirements. We explore LSB in a smart home setting as a representative example for broader IoT applications. Low resource devices in a smart home benefit from a centralized manager that establishes shared keys for communication and processes all incoming and outgoing requests. LSB achieves decentralization by forming an overlay network where high resource devices jointly manage a public BC that ensures end-to-end privacy and security. The overlay is organized as distinct clusters to reduce overheads and the cluster heads are responsible for managing the public BC. LSB incorporates several optimizations which include algorithms for lightweight consensus, distributed trust and throughput management. Qualitative arguments demonstrate that LSB is resilient to several security attacks. Extensive simulations show that LSB decreases packet overhead and delay and increases BC scalability compared to relevant baselines.
Article
Full-text available
We introduce Casper, a proof of stake-based finality system which overlays an existing proof of work blockchain. Casper is a partial consensus mechanism combining proof of stake algorithm research and Byzantine fault tolerant consensus theory. We introduce our system, prove some desirable features, and show defenses against long range revisions and catastrophic crashes. The Casper overlay provides almost any proof of work chain with additional protections against block reversions.
Article
In the Internet of Vehicles (IoV), data sharing among vehicles is critical to improving driving safety and enhancing vehicular services. To ensure security and traceability of data sharing, existing studies utilize efficient Delegated Proof-of-Stake consensus scheme as hard security solutions to establish blockchainenabled IoV (BIoV). However, as the miners are selected from miner candidates by stake-based voting, defending against voting collusion between the candidates and compromised high-stake vehicles becomes challenging. To address the challenge, in this paper, we propose a two-stage soft security enhancement solution: (i) miner selection and (ii) block verification. In the first stage, we design a reputation-based voting scheme to ensure secure miner selection. This scheme evaluates candidates' reputation using both past interactions and recommended opinions from other vehicles. The candidates with high reputation are selected to be active miners and standby miners. In the second stage, to prevent internal collusion among active miners, a newly generated block is further verified and audited by standby miners. To incentivize the participation of the standby miners in block verification, we adopt the contract theory to model the interactions between active miners and standby miners, where block verification security and delay are taken into consideration. Numerical results based on a real-world dataset confirm the security and efficiency of our schemes for data sharing in BIoV.
Article
Carpooling enables passengers to share a vehicle to reduce traveling time, vehicle carbon emissions and traffic congestion. However, the majority of passengers lean to find local drivers, but querying a remote cloud server leads to an unnecessary communication overhead and an increased response delay. Recently, fog computing is introduced to provide local data processing with low latency, but it also raises new security and privacy concerns because users’ private information (e.g., identity, location) could be disclosed when theses information are shared during carpooling. While they can be encrypted before transmission, it makes user matching a challenging task and malicious users can upload false locations. Moreover, carpooling records should be kept in a distributed manner to guarantee reliable data auditability. To address these problems, we propose an efficient and privacy-preserving carpooling scheme using blockchain-assisted vehicular fog computing to support conditional privacy, one-to-many matching, destination matching and data auditability. Specifically, we authenticate users in a conditionally anonymous way. Also, we adopt private proximity test to achieve one-to-many proximity matching and extend it to efficiently establish a secret communication key between a passenger and a driver. We store all location grids into a tree and achieve get-off location matching using a range query technique. A private blockchain is built to store carpooling records. Finally, we analyze the security and privacy properties of the proposed scheme, and evaluate its performance in terms of computational costs and communication overhead. IEEE