We continue our series of articles about consensus algorithms to present this topic in a simple manner to our traders. Most of the coins traded on VHCEx are minable, so it, therefore, might be interesting for the traders to understand more about the way they appear in people's wallets.
Delegated Proof-of-Stake
Delegated Proof-of-stake algorithm was developed by Daniel Larimer back in 2014. This emerged as a type of an older Proof-of-Stake algorithm where the blocks are signed by the picked representatives of the networks - designated nodes. The weight of each vote is determined by the number of underlying assets a voter holds.
Each representative that holds one or more percent of the total votes pool gets his spot in the 'Board'. Each time a block of transactions is formed, it is signed by a randomly chosen representative from the Board. If this representative misses his part of the validator, he gets expelled from the Board.
Interestingly, tokenholders may always withdraw their coins from their vote, thus, re-electing the suspicious or failed representatives. This secures the high extent of the network's stability. If a large enough number of representatives loses control of their mining powers, they get re-elected pretty fast.
DPos is used by Steemit, EOS, and BitShares - all are creations of Daniel Larimer.
Leased Proof-of-Stake
LPoS is another modification if Proof-of-Stake algorithm. At the moment it can be considered as unique as it is used and applied exclusively in Waves platform. In the frameworks of this algorithm, any user has a possibility to lease (this is where the name comes from) his balance to validating nodes, while receiving a portion of revenue yielded for blocks validation. In a sense, this algorithm allows getting profits from mining without actually mining.
Byzantine Fault Tolerance
The basic concept of this algorithm was introduced originally by Lasley Lamport, Robert Shostak, and Marshall Peace in 1982. This algorithm allows "generals" (validators) to process quick transactions, manage the network's technical state and exchange the messages with each other in order to get a correct transaction register.
This algorithm is applied in Ripple where the validators are picked by the Ripple fund, and Stellar where everybody may become a validator, as the trust is established by the community.