Thread by @orbisproject

We are now going through a very defining period in the history of blockchains

where the era of monolithic blockchains is ending and

the era of modular blockchains is starting

marking the first step towards mass adoption!

🧵 A thread on Consensus mechanisms: 👇

Since the inception of #Bitcoin,

the blockchain industry only had monolithic blockchains

where one #blockchain is designed to not outsource components to external networks

and is burdened with too many tasks to perform

In a monolithic #blockchain

The #consensus & execution functions are bundled into one layer

And a smart contract is then built on this bundled layer

The users are bound within one execution environment

This limits the potential to optimize & specialize for specific use cases

The inherent constraint of the core monolithic blockchain architecture

that was designed not to outsource components to external networks is the major bottleneck

It prevents the contemporary monolithic blockchains from

becoming the new backbone of the global finance

So what is a #modularblockchain?

It is a blockchain that can outsource at least one of the core components to an external independent chain

The core components are:

• Execution

• Settlement

• Consensus

• Data availability

So what is consensus?

Consensus refers to the mechanism by which nodes come to an agreement about

what data on the blockchain can be verified as true & accurate.

The consensus protocol determines how transactions are ordered and

how new blocks are added to the chain

There are many consensuses mechanisms out there

For eg:

#Bitcoin - Nakamoto

#Cardano - Ouroboros

#Ethereum - Casper FFG

#Avalanche - Avalanche consensus

These consensus mechanisms are paired with PoW or PoS

to achieve Sybil protection

All of the modular blockchains use or plan to use consensus mechanisms

paired with PoS Sybil protection.

In a modular blockchain environment,

the execution and data availability (DA) layers

May or may not also have their own consensus mechanisms

If we look at the broader blockchain landscape

The prevalent types of consensus models used by blockchains are

the classical consensus & the Nakamoto consensus algorithm

What is a classical consensus protocol?

Classical consensus protocols are based on all-to-all voting

Because all-to-all voting is a must to achieve consensus

This results in quadratically increasing communication overhead (eg. pBFT / Practical Byzantine Fault Tolerance)

To state it in a straightforward way think about this

To achieve consensus among the nodes everyone has to communicate with every other node in the system

So if there are 10 nodes: 100 messages

if there are 1000 nodes 1,000,000

i.e, a million messages between the nodes

This is a bottleneck for decentralization

Because you can only achieve fast consensus

Only by limiting the number of nodes participating in the consensus mechanism

Because of these limitations

Satoshi came up with the Nakamoto consensus

This made Bitcoin different from all the digital currency implementations that came before it

This allowed Bitcoin to be the first BFT (Byzantine fault-tolerant) system that is permissionless & scalable

Proof of work (PoW) is a major part of this consensus model

Where computing resources are used for the sole purpose of solving computationally hard problems and validating new blocks

The more computing power an individual node has,

The more chance it has to validate new blocks

Because of the energy-intensive PoW Sybil protection mechanism

Which also adds economies of scale to the process

Most of the blockchains use PoS Sybil protection

or are moving to PoS, including #Ethereum

So let's take a look at the consensus mechanisms used by major blockchains

Which uses the PoS Sybil protection mechanism

1. Ethereum - Casper FFG

2. Cardano - Ouroboros

3. Avalanche - Avalanche consensus

1. #Ethereum - Casper FFG

It is a PBFT-inspired consensus protocol

Casper FFG is an overlay that abstracts the block proposing mechanism & is only responsible for consensus

The block proposing mechanism is implemented by the underlying chain, which is called checkpoints

Each node must follow the fork choice rule to select the next checkpoints to be linked

In Casper FFG the rule is to select the highest “justified” checkpoint to establish the link

It comes to finality every ~12 mins through Casper FFG when >2/3 agree

That past history is final

2. #Avalanche - Avalanche consensus

It is a leaderless BFT protocol for a system based on a metastable mechanism

Events are propagated through the network with the help of a gossip algorithm

Consensus is achieved by a probabilistic conclusion which strengthens extremely fast

3. #Cardano - Ouroboros

Ouroboros is the first provably secure proof-of-stake protocol

That provides and improves the security guarantees of #Bitcoins'

Nakamoto consensus protocol

At a fraction of the energy cost

The model introduced a novel blockchain protocol based on PoS Sybil protection

Where the Block producers are selected randomly by a secure multiparty computation

That takes place utilizing the blockchain itself as the broadcast channel
In regular intervals called ''epochs''

#Orbis will eventually be a decentralized L2 execution layer on top of Cardano

Which uses its own consensus mechanism

To settle transactions using the prover nodes

Orbis will be using a consensus mechanism similar to #Cardano

TL;DR -

• Monolithic blockchain architecture is burdened with a lot of inherent constraints

• That prevents it from scaling without compromising decentralization & security

• Modular blockchain solves this by separating consensus from execution

If you are looking to learn more about zero-knowledge proofs and zk-rollups—

Here’s a similar thread on "Data Availability" that you might find useful:

https://twitter.com/orbisproject/status/1547219321688133633?s=20&t=wqu7pIZVsYcEzlUZPfddkQ