Nowadays we keep hearing about new innovative Layer 1 projects coming out with consensus mechanisms being based off of alternatives to proof-of-work (PoW).
It seems like to be a new chain, PoS based consensus mechanism is a must, especially when almost every upcoming new layer 1 protocol is doing it (Near Protocol, Coda, Cosmos, Polkadot, Ethereum 2.0, and so on).
However, PoS is by far not a clear winner and comes with serious security concerns, unproven economics, and protocol complexity. Certain PoW based mechanisms on the other hand, oftentimes outperform PoS ones on metrics of decentralization and security.
This article will go over how to think about different mechanisms in terms of decentralization, security, and usability/scalability, and I'll break it up into 4 parts:
BFT: Byzantine Fault Tolerance is a property of consensus algorithms that states the system will always converge, or reach consensus, even if some participants are faulty or malicious. All successful consensus systems must exhibit this quality. Bitcoin and other Proof of Work (PoW) systems have proven to be probabilistically Byzantine fault tolerant.
PBFT: Practical Byzantime Fault Tolerance is an algorithm that describes specifically how to achieve Byzantine Fault Tolerance in the presence of malicious nodes. It states the system needs 3f + 1 nodes such that the system can handle up to f faulty nodes. Most Proof of Stake (PoS) protocols are PBFT-based.
ASIC: An ASIC (application-specific integrated circuit) refers to highly specialized hardware customized for particular use, like hashing the SHA256 hashing algorithm that Bitcoin uses. ASICs outperform commercial chips / machines for the specific task they are optimized for, and are generally cheaper for that task, making them an ideal choice for those wanting to mine cryptocurrency professionally.