Regardless of the exact approach, users with more stake are more likely to publish new blocks. When the choice of block publisher is a random choice (sometimes referred to as chain-based proof of stake), the blockchain network will look at all users with stake and choose amongst them based on their ratio of stake to the overall amount of cryptocurrency staked. So, if a user had 42 % of the entire blockchain network stake they would be chosen 42 % of the time; those with 1 % would be chosen 1 % of the time. When the choice of block publisher is a multi-round voting system (sometime referred to as Byzantine fault tolerance proof of stake [12]) there is added complexity. The blockchain network will select several staked users to create proposed blocks. Then all staked users will cast a vote for a proposed block. Several rounds of voting may occur before a new block is decided upon. This method allows all staked users to have a voice in the block selection process for every new block.
When the choice of block publisher is through a coin age system referred to as a coin age proof of stake, staked cryptocurrency has an age property. After a certain amount of time (such as 30 days) the staked cryptocurrency can count towards the owning user being selected to publish the next block. The staked cryptocurrency then has its age reset, and it cannot be used again until after the requisite time has passed. This method allows for users with more stake to publish more blocks, but to not dominate the system – since they have a cooldown timer attached to every cryptocurrency coin counted towards creating blocks. Older coins and larger groups of coins will increase the probability of being chosen to publish the next block. To prevent stakeholders from hoarding aged cryptocurrencies, there is generally a built-in maximum to the probability of winning. When the choice of block publisher is through a delegate system, users vote for nodes to become publishing nodes – therefore creating blocks on their behalf. Blockchain network users’ voting power is tied to their stake so the larger the stake, the more weight the vote has. Nodes who receive the most votes become publishing nodes and can validate and publish blocks. Blockchain network users can also vote against an established publishing node, to try to remove them from the set of publishing nodes.
Voting for publishing nodes is continuous and remaining a publishing node can be quite competitive. The threat of losing publishing node status, and therefore rewards and reputation is constant so publishing nodes are incentivized to not act maliciously. Additionally, blockchain network users vote for delegates, who participate in the governance of the blockchain. Delegates will propose changes, and improvements, which will be voted on by blockchain network users. It is worth noting that a problem known as “nothing at stake” may arise from some proof of stake algorithms. If multiple competing blockchains were to exist at some point (because of a temporary ledger conflict as discussed in Section 4.7), a staked user could act on every such competing chain – since it is essentially free to do so. The staked user may do this as a way of increasing their odds of earning a reward. This can cause multiple blockchain branches to continue to grow without being reconciled into a singular branch for extended periods of time. NISTIR 8202 BLOCKCHAIN TECHNOLOGY OVERVIEW 23 This publication is available free of charge from: https://doi.org/10.6028/NIST.IR.8202 Under proof of stake systems, the “rich” can more easily stake more of the digital assets, earning themselves more digital assets; however, to obtain the majority of digital assets within a system to “control” it is generally cost prohibitive. 4.3
Round Robin Consensus Model Round Robin is a consensus model that is used by some permissioned blockchain networks. Within this model of consensus, nodes take turns in creating blocks. Round Robin Consensus has a long history grounded in distributed system architecture. To handle situations where a publishing node is not available to publish a block on its turn, these systems may include a time limit to enable available nodes to publish blocks so that unavailable nodes will not cause a halt in block publication. This model ensures no one node creates the majority of the blocks. It benefits from a straightforward approach, lacks cryptographic puzzles, and has low power requirements. Since there is a need for trust amongst nodes, round robin does not work well in the permissionless blockchain networks used by most cryptocurrencies.
This is because malicious nodes could continuously add additional nodes to increase their odds of publishing new blocks. In the worst case, they could use this to subvert the correct operation of the blockchain network. 4.4 Proof of Authority/Proof of Identity Consensus Model The proof of authority (also referred to as proof of identity) consensus model relies on the partial trust of publishing nodes through their known link to real world identities. Publishing nodes must have their identities proven and verifiable within the blockchain network (e.g., identifying documents which have been verified and notarized and included on the blockchain). The idea is that the publishing node is staking its identity/reputation to publish new blocks.
Blockchain network users directly affect a publishing node’s reputation based on the publishing node’s behavior. Publishing nodes can lose reputation by acting in a way that the blockchain network users disagree with, just as they can gain reputation by acting in a manner that the blockchain network users agree with. The lower the reputation, the less likelihood of being able to publish a block. Therefore, it is in the interest of a publishing node to maintain a high reputation.
This algorithm only applies to permissioned blockchain networks with high levels of trust Within the proof of elapsed time (PoET) consensus model, each publishing node requests a wait time from a secure hardware time source within their computer system. The secure hardware time source will generate a random wait time and return it to the publishing node software. Publishing nodes take the random time they are given and become idle for that duration. Once a publishing node wakes up from the idle state, it creates and publishes a block to the blockchain network, alerting the other nodes of the new block; any publishing node that is still idle will stop waiting, and the entire process starts over.
This model requires ensuring that a random time was used, since if the time to wait was not selected at random a malicious publishing node would just wait the minimum amount of time by default to dominate the system. This model also requires ensuring that the publishing node waited the actual time and did not start early. These requirements are being solved by executing NISTIR 8202 BLOCKCHAIN TECHNOLOGY OVERVIEW 24 This publication is available free of charge from: https://doi.org/10.6028/NIST.IR.8202 software in a trusted execution environment found on some computer processors (such as Intel’s Software Guard Extensions5 , or AMD’s Platform Security Processor6 , or ARM’s TrustZone7 ).
Verified and trusted software can run in these secure execution environments and cannot be altered by outside programs. A publishing node would query software running in this secure environment for a random time and then wait for that time to pass. After waiting the assigned time, the publishing node could request a signed certificate that the publishing node waited the randomly assigned time. The publishing node then publishes the certificate along with the block.
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1. Proof of Stake (PoS) Approaches
Proof of Stake (PoS) is a consensus mechanism where the probability of a user being selected to publish a new block depends on their stake in the network. Various approaches exist within PoS systems:
1.1 Random Selection (Chain-Based PoS)
In this approach, the blockchain network randomly selects a user from all participants who have staked cryptocurrency. The selection probability is proportional to the user’s share of the total stake.
Example:
A user with 42% stake → selected 42% of the time
A user with 1% stake → selected 1% of the time
This method ensures fairness based on stake distribution.
1.2 Multi-Round Voting (BFT-Based PoS)
Also known as Byzantine Fault Tolerance (BFT)-based PoS, this approach introduces a voting process:
Several staked users propose blocks.
All staked users vote on the proposed blocks.
Multiple voting rounds may occur before finalizing a block.
Advantages:
Every stakeholder participates in block selection
Increased security and consensus reliability
1.3 Coin Age-Based PoS
In this method, each staked coin has an age factor:
Coins become eligible after a specific time (e.g., 30 days).
Once used, the coin’s age resets.
Coins cannot be reused until they age again.
Key Features:
Prevents dominance by large stakeholders
Encourages fair participation
Includes a maximum probability cap to prevent hoarding
1.4 Delegate-Based PoS (DPoS)
In Delegate Proof of Stake:
Users vote for nodes (delegates) to produce blocks.
Voting power is proportional to stake.
Top-voted nodes become block producers.
Additional Characteristics:
Continuous voting system
Delegates can be removed by votes
Delegates also participate in governance by proposing improvements
1.5 “Nothing at Stake” Problem
A known issue in some PoS systems:
Validators may support multiple competing chains simultaneously
This increases their chances of earning rewards
It can lead to prolonged blockchain forks
1.6 Wealth Concentration Concern
Users with more assets can stake more and earn more rewards
However, gaining majority control is typically cost-prohibitive
2. Round Robin Consensus Model
The Round Robin model is mainly used in permissioned blockchains.
How It Works:
Nodes take turns creating blocks in a fixed sequence
If a node fails, a timeout allows another node to take over
Advantages:
Simple and predictable
Low energy consumption
No cryptographic puzzles required
Limitations:
Requires trust among nodes
Not suitable for permissionless systems
Vulnerable to manipulation if malicious nodes join repeatedly
3. Proof of Authority (PoA) / Proof of Identity
This model relies on verified identities of publishing nodes.
Key Principles:
Nodes must prove real-world identity
Reputation is tied to behavior
Trust is partially centralized
Benefits:
High efficiency
Low computational cost
Limitations:
Only suitable for permissioned networks
Requires trust in node identities
4. Proof of Elapsed Time (PoET)
PoET uses a random wait time system supported by secure hardware.
Process:
Each node requests a random wait time from secure hardware
Node waits for the assigned duration
The first node to finish waiting publishes the block
Other nodes stop waiting and restart the process
Security Requirements:
Wait time must be truly random
Nodes must not bypass or shorten wait time
Advantages:
Energy efficient
Fair and randomized selection
Challenges:
Requires trusted hardware
Needs verification of wait time integrity
Conclusion
Blockchain consensus mechanisms vary in design and application depending on the network type (permissioned vs permissionless). While Proof of Stake offers energy efficiency and scalability, it introduces challenges such as wealth concentration and the “nothing at stake” problem. Alternative models like Round Robin, Proof of Authority, and Proof of Elapsed Time address specific use cases, particularly in controlled environments where trust and identity verification are feasible.
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