Byzantine Generals Problem in Blockchain

The article focuses on discussing the following topics of Byzantine Generals Problem in
Blockchain:
1. What is Byzantine General’s Problem?
2. Money and Byzantine General’s Problem
3. How Bitcoin Solves the Byzantine General’s Problem?
4. Byzantine Fault Tolerance (BFT)
5. Byzantine General’s Problem in a Distributed System
6. Byzantine General’s Problem Example

What is Byzantine General’s Problem?

In 1982, The Byzantine General’s Problem was invented by Leslie Lamport, Robert Shostak,
and Marshall Pease. Byzantine Generals Problem is an impossibility result which means that
the solution to this problem has not been found yet as well as helps us to understand the
importance of blockchain. It is basically a game theory problem that provides a description of
the extent to which decentralized parties experience difficulties in reaching consensus
without any trusted central parties.
 The Byzantine army is divided into many battalions in this classic problem called the
Byzantine General’s problem, with each division led by a general. 
 The generals connect via messenger in order to agree to a joint plan of action in which all
battalions coordinate and attack from all sides in order to achieve success. 
 It is probable that traitors will try to sabotage their plan by intercepting or changing the
messages. 
 As a result, the purpose of this challenge is for all of the faithful commanders to reach an
agreement without the imposters tampering with their plans.
 Centralized systems do not address the Byzantine Generals problem, which requires that
truth be verified in an explicitly transparent way, yet centralized systems give no
transparency, increasing the likelihood of data corruption. 
 They forgo transparency in order to attain efficiency easily and prefer to avoid dealing
with the issue entirely. 
 The fundamental issue of centralized systems, however, is that they are open to
corruption by the central authority, which implies that the data can be manipulated by
anyone who has control of the database itself because the centralized system
concentrates all power on one central decision maker.

Therefore, Bitcoin was invented to make the system of money decentralized using
blockchain to make money verifiable, counterfeit-resistant, trustless, and separate from a
central agency.

Money and Byzantine General’s Problem

Money is one such commodity whose value should be same throughout the society, that is
everyone should agree upon the value of a certain amount of money, despite all the
differences therefore in the initial times, precious metals and rare goods were chosen as
money because their value was seen equally throughout the society, but in some cases such
as precious metals the purity of the metals could not be known for sure or checking the purity
was an extremely tedious task which turned out to be very inefficient for the daily
transactions, therefore it was decided upon to replace gold with a central party which would
be highly trustable chosen by the people in the society to establish and maintain the system
of money. But with time it was later realized that those central parties, how much-ever
qualified were still not completely trustworthy as it was so simple for them to manipulate the
data. 
 Centralized systems do not address the Byzantine Generals problem, which requires that
truth be verified in an explicitly transparent way, yet centralized systems give no
transparency, increasing the likelihood of data corruption. 
 They forgo transparency in order to attain efficiency easily and prefer to avoid dealing
with the issue entirely. 
 The fundamental issue of centralized systems, however, is that they are open to
corruption by the central authority, which implies that the data can be manipulated by
anyone who has control of the database itself because the centralized system
concentrates all power on one central decision maker.

Therefore, Bitcoin was invented to make the system of money decentralized using
blockchain to make money verifiable, counterfeit-resistant, trustless, and separate from a
central agency.

How Bitcoin Solves the Byzantine General’s Problem?

In the Byzantine Generals Problem, the untampered agreement that all the loyal generals
need to agree to is the blockchain. Blockchain is a public, distributed ledger that contains
the records of all transactions. If all users of the Bitcoin network, known as nodes, could
agree on which transactions occurred and in what order, they could verify the  ownership and
create a functioning, trustless money system without the need for a centralized authority.
Due to its decentralized nature, blockchain relies heavily on a consensus technique to
validate transactions. It is a peer-to-peer network that offers its users transparency as well as
trust. Its distributed ledger is what sets it apart from other systems. Blockchain technology
can be applied to any system that requires proper verification.

Proof Of Work: The network would have to be provable, counterfeit-resistant, and trust-

free in order to solve the Byzantine General’s Problem. Bitcoin overcame the Byzantine
General’s Problem by employing a Proof-of-Work technique to create a clear, objective
regulation for the blockchain. Proof of work (PoW) is a method of adding fresh blocks of
transactions to the blockchain of a cryptocurrency. In this scenario, the task consists of
creating a hash (a long string of characters) that matches the desired hash for the current
block.

1. Counterfeit Resistant: Proof-of-Work requires network participants to present proof of

their work in the form of a valid hash in order for their block, i.e. piece of information, to
be regarded as valid. Proof-of-Work requires miners to expend significant amounts of
energy and money in order to generate blocks, encouraging them to broadcast accurate
information and so protecting the network. Proof-of-Work is one of the only ways for a
decentralized network to agree on a single source of truth, which is essential for a
monetary system. There can be no disagreement or tampering with the information on the
blockchain network because the rules are objective. The ruleset defining which
transactions are valid and which are invalid, as well as the system for choosing who can
mint new bitcoin, are both objectives.
2. Provable: Once a block is uploaded to the blockchain, it is incredibly difficult to erase,
rendering Bitcoin’s history immutable. As a result, participants of the blockchain network
may always agree on the state of the blockchain and all transactions inside it. Each node
independently verifies whether blocks satisfy the Proof-of-Work criterion and whether
transactions satisfy additional requirements.
3. Trust-free: If any network member attempts to broadcast misleading information, all
network nodes immediately detect it as objectively invalid and ignore it. Because each
node on the Bitcoin network can verify every information on the network, there is no need
to trust other network members, making Bitcoin a trustless system.

Byzantine Fault Tolerance (BFT) 

The Byzantine Fault Tolerance was developed as inspiration in order to address the
Byzantine General’s Problem. The Byzantine General’s Problem, a logical thought
experiment where multiple generals must attack a city, is where the idea for BFT originated.
 Byzantine Fault Tolerance is one of the core characteristics of developing trustworthy
blockchain rules or features is tolerance.
 When two-thirds of the network can agree or reach a consensus and the system still
continues to operate properly, it is said to have BFT.
 Blockchain networks’ most popular consensus protocols, such as proof-of-work, proof-of-
stake, and proof-of-authority, all have some BFT characteristics.
 In order to create a decentralized network, the BFT is essential.

The consensus method determines the precise network structure. For instance, BFT has a
leader as well as peers who can and cannot validate.
In order to maintain the sequence of the Blockchain SC transactions and the consistency of
the global state through local transaction replay, consensus messages must pass between
the relevant peers.
More inventive approaches to designing BFT systems will be found and put into practice as
more individuals and companies investigate distributed and decentralized systems. Systems
that use BFT are also employed in sectors outside of blockchains, such as nuclear power,
space exploration, and aviation.
Byzantine General’s Problem in a Distributed System

In order to address this issue, honest nodes (such as computers or other physical devices)
must be able to establish an agreement in the presence of dishonest nodes.
 In the Byzantine agreement issue, an arbitrary processor initializes a single value that
must be agreed upon, and all nonfaulty processes must agree on that value. Every
processor has its own beginning value in the consensus issue, and all nonfaulty
processors must agree on a single common value.
 The Byzantine army’s position can be seen in computer networks. 
 The divisions can be viewed as computer nodes in the network, and the commanders as
programs running a ledger that records transactions and events in the order that they
occur. The ledgers are the same for all systems, and if any of them is changed, the other
ledgers are updated as well if the changes are shown to be true, so all distributed ledgers
should be in agreement.

Consensus Algorithms in Blockchain

Prerequisites: Introduction to Blockchain technology | Set 1, Set 2 We know that Blockchain is a
distributed decentralized network that provides immutability, privacy, security, and transparency. There
is no central authority present to validate and verify the transactions, yet every transaction in the
Blockchain is considered to be completely secured and verified. This is possible only because of the
presence of the consensus protocol which is a core part of any Blockchain network. A consensus
algorithm is a procedure through which all the peers of the Blockchain network reach a common
agreement about the present state of the distributed ledger. In this way, consensus algorithms achieve
reliability in the Blockchain network and establish trust between unknown peers in a distributed
computing environment. Essentially, the consensus protocol makes sure that every new block that is
added to the Blockchain is the one and only version of the truth that is agreed upon by all the nodes in
the Blockchain. The Blockchain consensus protocol consists of some specific objectives such as coming
to an agreement, collaboration, cooperation, equal rights to every node, and mandatory participation of
each node in the consensus process. Thus, a consensus algorithm aims at finding a common agreement
that is a win for the entire network. Now, we will discuss various consensus algorithms and how they
work.
1. Proof of Work (PoW): This consensus algorithm is used to select a miner for the next block
generation. Bitcoin uses this PoW consensus algorithm. The central idea behind this algorithm is to
solve a complex mathematical puzzle and easily give out a solution. This mathematical puzzle
requires a lot of computational power and thus, the node who solves the puzzle as soon as possible
gets to mine the next block. For more details on PoW, please read Proof of Work (PoW) Consensus
2. Practical Byzantine Fault Tolerance (PBFT): Byzantine Fault Tolerance is one of the core
characteristics of developing trustworthy blockchain rules or features is tolerance. When two-thirds
of the network can agree or reach a consensus and the system still continues to operate properly, it is
said to have BFT.
3. Proof of Stake (PoS): This is the most common alternative to PoW. Ethereum has shifted from
PoW to PoS consensus. In this type of consensus algorithm, instead of investing in expensive
hardware to solve a complex puzzle, validators invest in the coins of the system by locking up some
of their coins as stakes. After that, all the validators will start validating the blocks. Validators will
validate blocks by placing a bet on them if they discover a block that they think can be added to the
chain. Based on the actual blocks added in the Blockchain, all the validators get a reward
proportionate to their bets, and their stake increase accordingly. In the end, a validator is chosen to
 generate a new block based on its economic stake in the network. Thus, PoS encourages validators
through an incentive mechanism to reach to an agreement.
4. Delegated Proof Of Stake (DPoS): This is another type of Proof of Stake consensus algorithm.
This type of consensus mechanism depends on the basis of the delegation of votes. The users
delegate their votes to other users. Whichever user then mines the block will distribute the rewards
to the users who delegated to that particular vote.
5. Proof of Burn (PoB): With PoB, instead of investing in expensive hardware equipment, validators
‘burn’ coins by sending them to an address from where they are irretrievable. By committing the
coins to an unreachable address, validators earn the privilege to mine on the system based on a
random selection process. Thus, burning coins here means that validators have a long-term
commitment in exchange for their short-term loss. Depending on how the PoB is implemented,
miners may burn the native currency of the Blockchain application or the currency of an alternative
chain, such as bitcoin. The more coins they burn, the better their chances of being selected to mine
the next block. While PoB is an interesting alternative to PoW, the protocol still wastes resources
needlessly. And it is also questioned that mining power simply goes to those who are willing to burn
more money.
6. Proof of Capacity: In the Proof of Capacity consensus, validators are supposed to invest their hard
drive space instead of investing in expensive hardware or burning coins. The more hard drive space
validators have, the better their chances of getting selected for mining the next block and earning the
block reward.
7. Proof of Elapsed Time: PoET is one of the fairest consensus algorithms which chooses the next
block using fair means only. It is widely used in permissioned Blockchain networks. In this
algorithm, every validator on the network gets a fair chance to create their own block. All the nodes
do so by waiting for a random amount of time, adding proof of their wait in the block. The created
blocks are broadcasted to the network for others’ consideration. The winner is the validator which
has the least timer value in the proof part. The block from the winning validator node gets appended
to the Blockchain. There are additional checks in the algorithm to stop nodes from always winning
the election, and stop nodes from generating the lowest timer value.
There also exist other consensus algorithms like Proof of Activity, Proof of Weight, Proof of
Importance, Leased Proof of Stake, etc. It is therefore important to wisely choose one as per the
business network requirement because Blockchain networks cannot function properly without the
consensus algorithms to verify each and every transaction that is being committed.

Blockchain – Proof of Work (PoW)

Proof of Work consensus is the mechanism of choice for the majority of cryptocurrencies
currently in circulation. The algorithm is used to verify the transaction and create a new block
in the blockchain. The idea for Proof of Work(PoW) was first published in 1993 by Cynthia
Dwork and Moni Naor and was later applied by Satoshi Nakamoto in the Bitcoin paper in
2008. The term “proof of work” was first used by Markus Jakobsson and Ari Juels in a
publication in 1999.
Cryptocurrencies like Ethereum, Litecoin, and Bitcoin are currently using PoW. 
Principle: A solution that is difficult to find but is easy to verify.

Purpose of PoW
The purpose of a consensus mechanism is to bring all the nodes in agreement, that is, trust
one another, in an environment where the nodes don’t trust each other. 

 All the transactions in the new block are then validated and the new block is then added
to the blockchain. 
 The block will get added to the chain which has the longest block height(see  blockchain
forks to understand how multiple chains can exist at a point in time). 
 Miners(special computers on the network) perform computation work in solving a complex
mathematical problem to add the block to the network, hence named, Proof-of-Work. 
 With time, the mathematical problem becomes more complex. 

Features of PoW

There are mainly two features that have contributed to the wide popularity of this
consensus protocol and they are:
 It is hard to find a solution to a mathematical problem.
 It is easy to verify the correctness of that solution.

How Does PoW Work? 

The PoW consensus algorithm involves verifying a transaction through the mining process.
This section focuses on discussing the mining process and resource consumption during the
mining process. 

Mining: 

The Proof of Work consensus algorithm involves solving a computationally challenging

puzzle in order to create new blocks in the Bitcoin blockchain. The process is known as
‘mining’, and the nodes in the network that engages in mining are known as ‘miners’. 
 The incentive for mining transactions lies in economic payoffs, where competing miners
are rewarded with 6.25 bitcoins and a small transaction fee.
 This reward will get reduced by half its current value with time.

Energy and Time consumption in Mining: 

The process of verifying the transactions in the block to be added, organizing these
transactions in chronological order in the block, and announcing the newly mined block to
the entire network does not take much energy and time. 

 The energy-consuming part is solving the ‘hard mathematical problem’ to link the new
block to the last block in the valid blockchain. 
 When a miner finally finds the right solution, the node broadcasts it to the whole network
at the same time, receiving a cryptocurrency prize (the reward) provided by the PoW
protocol. 
Mining reward:

 Currently, mining a block in the bitcoin network gives the winning miner 6.25 bitcoins. 
 The amount of bitcoins won halves every four years. So, the next deduction in the amount
of bitcoin is due at around 2024(with the current rate and growth). 
 With more miners comes the inevitability of the time it takes to mine the new block getting
shorter. 
 This means that the new blocks are found faster. In order to consistently find 1 block
every 10 minutes. (That is the amount of time that the bitcoin developers think is
necessary for a steady and diminishing flow of new coins until the maximum number of
21 million is reached (expected some time with the current rate in around 2140)), the
Bitcoin network regularly changes the difficulty level of mining a new block.

Bitcoin’s PoW System

Bitcoin uses the Hashcash Proof of Work system as the mining basis. The  ‘hard
mathematical problem’ can be written in an abstract way like below :
Given data A, find a number x such as that the hash of x appended to A results
is a number less than B.
 The miners bundle up a group of transactions into a block and try to mine. To mine it, a
hard mathematical problem has to be solved. 
 This problem is called the proof of work problem which has to be solved to show that the
miner has done some work in finding out the solution to the problem and hence the mined
block must be valid. 
 The answer to the problem needs to be a lower number than the hash of the block for it to
be accepted, known as the ‘target hash’.
A target hash  is a number that the header of a hashed block must be equal to
or less than for a new block, along with the reward, to be awarded to a miner. 
The lower a target is, the more difficult it is to generate a block.
 A miner continues testing different unique values (known as a nonce(s)) until a suitable
one is produced. 
 The miner who manages to solve the problem gets the bitcoin reward and adds the block
to the blockchain by broadcasting that the block has been mined. 
Note: The target hash adjusts once every 2016 block or approximately once every 2 weeks.
All the miners immediately stop working on the said block and start mining the next block.  
Common cryptographic protocols used in PoW: The most widely used proof-of-work
consensus is based on SHA-256 and was introduced as a part of Bitcoin. Others include
Scrypt, SHA-3, scrypt-jane, scrypt-n, etc. 

Challenges With PoW

The Proof-of-Work consensus mechanism has some issues which are as follows:
 The 51% risk: If a controlling entity owns 51% or more than 51% of nodes in the network,
the entity can corrupt the blockchain by gaining the majority of the network.
 Time-consuming: Miners have to check over many nonce values to find the right solution
to the puzzle that must be solved to mine the block, which is a time-consuming process.
 Resource consumption: Miners consume high amounts of computing power in order to
find the solution to the hard mathematical puzzle. It leads to a waste of precious
 resources(money, energy, space, hardware). It is expected that 0.3% of the world’s
electricity will be spent to verify transactions by the end of 2018.
 Not instantaneous transaction: Transaction confirmation takes about 10–60 minutes.
So, it is not an instantaneous transaction; because it takes some time to mine the
transaction and add it to the blockchain thus committing the transaction.

Proof of Stake (PoS) in Blockchain

Proof of Stake (PoS) is a type of algorithm which aims to achieve distributed consensus in
a Blockchain. This way to achieve consensus was first suggested by Quantum Mechanic here and later
Sunny King and his peer wrote a paper on it. This led to Proof-of-Stake (PoS) based Peercoin.
A stake is value/money we bet on a certain outcome. The process is called staking.
A more particular meaning of stake will be defined later on.
Why Proof-of-Stake:
Before proof of stake, the most popular way to achieve distributed consensus was through Proof-of-
Work (implemented in Bitcoin). But Proof-of-Work is quite energy(electrical energy in mining a
bitcoin) intensive. So, a proof-of-work based consensus mechanism increases an entity’s chances of
mining a new block if it has more computation resources. Apart from the upper two points, there are
other weaknesses of a PoW based consensus mechanism which we will discuss later on. In such a
scenario, a Proof-of-Stake based mechanism holds merit.
What is Proof-of-Stake:
As understandable from the name, nodes on a network stake an amount of cryptocurrency to become
candidates to validate the new block and earn the fee from it. Then, an algorithm chooses from the pool
of candidates the node which will validate the new block. This selection algorithm combines the
quantity of stake (amount of cryptocurrency) with other factors (like coin-age based selection,
randomization process) to make the selection fair to everyone on the network.
 Coin-age based selection:
The algorithm tracks the time every validator candidate node stays a validator. The older the node
becomes, the higher the chances of it becoming the new validator.
 Random Block selection:
The validator is chosen with a combination of ‘lowest hash value’ and ‘highest stake’. The node
having the best weighted-combination of these becomes the new validator.
A typical PoS based mechanism workflow:
1. Nodes make transactions. The PoS algorithm puts all these transactions in a pool.
2. All the nodes contending to become validator for the next block raise a stake. This stake is combined
with other factors like ‘coin-age’ or ‘randomized block selection’ to select the validator.
3. The validator verifies all the transactions and publishes the block. His stake still remains locked and
the forging reward is also not granted yet. This is so that the nodes on the network can ‘OK’ the new
block.
4. If the block is ‘OK’-ed, the validator gets the stake back and the reward too. If the algorithm is using
a coin-age based mechanism to select validators, the validator for the current block’s has its coin-age
reset to 0. This puts him in a low-priority for the next validator election.
5. If the block is not verified by other nodes on the network, the validator loses its stake and is marked
as ‘bad’ by the algorithm. The process again starts from step 1 to forge the new block.
Features:
 Fixed coins in existence:
There is only a finite number of coins that always circulate in the network. There is no existence of
bringing new coins into existence(as in by mining in case of bitcoin and other PoW based systems).
Note that the network starts with a finite number of coins or ‘initially starts with PoW, then shifts to
PoS’ in some cases. This initiation with PoW is meant to bring coins/cryptocurrency in the network.
 Transaction fee as reward to minters/forgers:
Every transaction is charged some amount of fee. This is accumulated and given to the entity who
forges the new block. Note that if the forged block is found fraudulent, the transaction fee is not
rewarded. Moreover, the stake of the validator is also lost(which is also known as slashing).
 Impracticality of the 51% attack:
To conduct a 51% attack, the attacker will have to own 51% of the total cryptocurrency in the
network which is quite expensive. This deems doing the attack too tedious, expensive and not so
profitable. There will occur problems when amassing such a share of total cryptocurrency as there
might not be so much currency to buy, also that buying more and more coins/value will become
more expensive. Also validating wrong transactions will cause the validator to lose its stake, thereby
being reward-negative.
Advantages of PoS:

 Energy-efficient:
As all the nodes are not competing against each other to attach a new block to the blockchain,
energy is saved. Also, no problem has to be solved( as in case of Proof-of-Work system) thus saving
the energy.
 Decentralization:
In blockchains like Bitcoin(Proof of Work system to achieve distributed consensus), an extra
incentive of exponential rewards are in place to join a mining pool leading to a more centralized
nature of blockchain. In the case of a Proof-of-Stake based system(like Peercoin), rewards are
proportional(linear) to the amount of stake. So, it provides absolutely no extra edge to join a mining
pool; thus promoting decentralization.
 Security:
A person attempting to attack a network will have to own 51% of the stakes(pretty expensive). This
leads to a secure network.
Weakness of a PoS mechanism:
 Large stake validators:
If a group of validator candidates combine and own a significant share of total cryptocurrency, they
will have more chances of becoming validators. Increased chances lead to increased selections,
which lead to more and more forging reward earning, which lead to owning a huge currency share.
This can cause the network to become centralized over time.
 New technology:
PoS is still relatively new. Research is ongoing to find flaws, fix them and making it viable for a live
network with actual currency transactions.
 The ‘Nothing at Stake’ problem:
This problem describes the little to no disadvantage to the nodes in case they support multiple
blockchains in the event of a blockchain split(blockchain forking). In the worst-case scenario, every
 fork will lead to multiple blockchains and validators will work and the nodes in the network will
never achieve consensus.
Blockchains using Proof-of-Stake:
 Ethereum(Casper update)
 Peercoin
 Nxt
Variants of Proof-of-Stake:
 Regular Proof-of-Stake – The one discussed in this article.
 Delegated Proof-of-Stake
 Leased Proof-of-Stake
 Masternode Proof-of-Stake

Difference between Proof of Work (PoW) and

Proof of Stake (PoS) in blockchain

1. What is Proof of Work (PoW) ?

The term “proof of work” was coined by Markus Jakobsson and Ari Juels during a document published
in 1999.It is related to bitcoin. Proof of Work (PoW) may be a protocol designed to form digital
transactions secure without having to believe a 3rd party. This work builds on previous puzzle solutions.
PoW may be a way of verifying current and past transactions. The work that goes into solving puzzle
generates rewards for whoever solves it called it as mining. In other words, this is often an algorithm
that’s designed to verify transactions and obtain new blocks added to blockchain. With Proof of Work,
miners are competing to be primary to finish a complex mathematical puzzle which will generate this
new block, meaning that they’ll be ready to collect some new Bitcoins as a rewards.
 PoW reduces risk of a 51% attack because it’s very hard to do work.
 No miner will be able to control bitcoin network single handedly Based on Hashcash PoW system.
 The miners need to give a proof that they have done some work, before proposing a new block.
 At the same time, each solution is easy for community to verify. This makes it easy to check all
transactions for trustworthiness.
 PoW also sets a limit on how many new blocks of data can be generated. For example, miners can
only create a Bitcoin (BTC) block every 10 minutes.
 It doesn’t rely on a single third party transactor. This builds a “trustless” and transparent network.
 Monopoly can increase over time.


2. What is Proof of Stake (PoS) ?

Proof-of-stake is a consensus algorithm that decides on who validate next block, according to how many
coins you hold, instead of miners cracking cryptographic puzzles using computing power to verify
transactions like they do with traditional Proof-of-Work.
 The probability of validating a new block is determined by how large a stake of a person.
 The validator do not receive a block reward, instead they collect network fees as their reward.
 Peercoin was first cryptocurrency to implement a full-scale PoS consensus model.
 Handling Monopoly and Power Consumption.
Difference between Proof of Work (PoW) and
Proof of Stake (PoS) in blockchain :
S.No Proof of Work (PoW) Proof of Stake (PoS)
.
1. The probability of mining a block The probability of validating a new
is determined by how much block is determined by how large of a
computational work is done by stake a person holds (how many coins
miner. they possess).

2. A reward is given to first miner The validator donot receive a block

to solve cryptographic puzzle of reward instead they collect network fee
each block. as their reward.

3. To add each block to chain, miners There is no competition as block creator

must compete to solve difficult is .chosen by an algorithm based on user
puzzles using their computer stake.
process power
4. Hackers would need to have 51% of Hackers would need to own 51% of
computation power to add malicious all cryptocurrency on network, which is
block. practically impossible.

5. Proof of work systems are less Proof of Stake systems are much more
energy efficient and are less cost and energy efficient than POW
costly but more proven. systems but less proven.

6. Specialized equipment to optimize Standard server grade unit is more than

processing power. enough.

7. Initial investment to buy Initial investment to buy stake and

hardware. build reputation.

8. Bitcoin is most well known crypto Some of cryptocurrencies that use

with a Proof-of-Work consensus different variants of proof-of-stake
building algorithm which uses most consensus are: EOS (EOS), Tezos (XTZ),
well known proof-of-work function Cardano (ADA), Cosmos (ATOM), Lisk
is called SHA256. (LSK).