1.3.2 Consensus Mechanism

Consensus is a critical aspect of blockchain technology, ensuring the integrity and agreement of data across a decentralized network. In blockchain, consensus refers to the mechanism that allows multiple participants, often referred to as nodes, to reach an agreement on the validity of transactions and the state of the distributed ledger. The consensus mechanism employed in blockchain technology resolves several critical issues, such as double-spending, data distortion or substitution, data loss, and the risk of node capture (e.g., 51% attack).

Typically, there are three levels of consensus mechanisms:

• Crash Fault Tolerance (CFT): This level of consensus mechanism safeguards the network from unintentional failures and the failure of one or more nodes.

• Byzantine Fault Tolerance (BFT): BFT protects against malicious attacks wherein the attacker exploits vulnerabilities in the system to manipulate data. Such attacks may include double-spending attacks, 51% attacks (where the attacker seizes control of more than 51% of nodes to corrupt or alter the ledger), and other similar attacks.

• Data Confidentiality/Data Trust: This level of consensus mechanism focuses on protecting private data and keys. It also establishes mechanisms to verify information from external sources (off-chain or oracles) before incorporating it into the network.

These consensus mechanisms ensure the integrity and security of the blockchain network, preventing unauthorized activities, and data tampering, and maintaining trust in the system. Various consensus algorithms exist, each with its own approach and characteristics. The most well-known consensus mechanism is Proof of Work (PoW), which requires participants, known as miners, to solve complex mathematical puzzles to validate transactions and add new blocks to the blockchain. PoW is highly secure but consumes substantial computational power and energy.

Another consensus mechanism is Proof of Stake (PoS), where validators are selected based on the number of tokens they hold. Validators, instead of miners, create new blocks and secure the network based on their stake in the cryptocurrency. PoS is more energy-efficient but may introduce certain concerns regarding centralization. Other consensus mechanisms, such as Delegated Proof of Stake (DPoS), Practical Byzantine Fault Tolerance (PBFT), and Proof of Authority (PoA), offer alternative approaches that prioritize scalability, speed, or governance structures. Each consensus mechanism has its trade-offs in terms of security, efficiency, and decentralization.

The DGT platform adopts a unique approach known as F-BFT consensus, which utilizes a multi-level network model to mitigate communication risks. Consensus plays a vital role in facilitating distributed data processing, and its significance is extensively discussed in section 1.3.2 for comprehensive understanding.