Proof of Burn
One cryptocurrency can be exchanged into the other one through the Proof of Burn (PoB) mechanism. The node takes part in a lottery to choose the status of the blockchain by burning value they hold, as another cryptocurrency such as Bitcoin or Ethereum.
To locate the next block, the node transfers Bitcoin, Ethereum, or another cryptocurrency to an unspent address. In return, the node is rewarded in local coins of the Blockchain it supports.
The first Blockchain to apply PoB mechanism was Slimcoin. Its system used Proof of Burn together with Proof of Work and Proof of Stake, making it the first cryptocurrency to use three consensus mechanisms at once.
Proof of Elapsed Time
Proof of Elapsed Time (PoET) aims to fix one of the potential issues of PoS where an arbitrary determination of members proposing blocks is expected to guarantee that each member has a decent chance to solve the block, not only those that own more coins.
In PoET, every member is asked for a hold-up time from its trusted local node. The member with the shortest hold-up time is next to solve a block after a hold-up of the remaining waiting time. Each privately trusted node signs the potential result so other members can confirm that nobody has worked around the waiting time.
Practical Byzantine Fault-Tolerant Mechanism
In Practical Byzantine Fault-Tolerant (PBFT) mechanism every node distributes a public key. Messages getting through the node confirm its organization. When unique enough reactions are achieved, the consensus is reached and the message is considered a legitimate transaction.
Also, in PBFT trust is wholly decoupled from asset possession, which makes it feasible for non-profit organizations to keep things running.
Not at all like PoW and PoS, a PBFT consensus mechanism does not require any hashing energy to approve transactions in a blockchain, meaning that it doesn’t need a lot of power and that it is harder for it to become centralized in case of an attack.
PBFT is presently being utilized by the Hyperledger venture, which enables developers to create their own digital resources on a distributed ledger.
Proof of Identity
Proof of Identity (PoI) is cryptographic evidence which tells that a user owns a private key that compares to an authorized identity and is cryptographically attached to a specific transaction. Every individual from the group can create a PoF (only a block of data) and present it to anyone for instance to the processing node.
Proof of Importance
The last variant from the consensus mechanisms that we wanted to present is the Proof of Importance (PoI). The primary cryptocurrency platform to adopt PoI was NEM.
NEM’s consensus network relies on not only the number of coins users own but on the possibility that productive system action should be rewarded. The chances of staking a block are comprised of various factors, including reputation, balance, and the number of transactions made to and from that position. This gives an all-encompassing image of a ‘helpful’ network member.
The users are chosen by an algorithm and their significance for the system allows them to reap rewards. A recognition of fake use and manipulation attempts is included in the idea to avoid malicious members to pick up a higher importance score.
There are various types of consensus mechanisms. In all cases, the goal of the consensus is to secure the system, by making it harder to attack it and profitable for all those that help keep it safe. Each project chooses its own consensus mechanism, and as the technology evolves we can expect to see many more consensus mechanisms.