Decoding the Dynamics of Permissioned Blockchain Consensus Mechanisms

A consensus mechanism serves as the backbone of blockchain systems, facilitating distributed agreement on the state of the ledger. Operating within networks that encompass multiple processes and participants, these mechanisms play a pivotal role in enhancing the efficiency and reliability of cryptocurrencies, blockchains, and distributed ledgers. By automating the verification and auditing processes, consensus mechanisms eliminate the need for manual oversight, thereby accelerating transaction validation and system integrity.

While popular blockchains like Ethereum and Bitcoin offer public access to all, businesses prefer to build on a hybrid of public and private blockchains - permissioned blockchains.

Let’s dive into what a permissioned blockchain is and what keeps it operational. Keep reading.

Permissionless Vs Permissioned Blockchains

Permissionless blockchains, like Bitcoin and Ethereum, allow open access for users to interact and transact. Bitcoin employs the Proof-of-Work (PoW) algorithm, while Ethereum utilises Proof-of-Stake (PoS), both exemplifying decentralised, secure transaction frameworks.

Permissioned blockchains stand apart from their public counterparts primarily due to their controlled access. While public blockchains are open for anyone to join and validate transactions, permissioned blockchains set criteria for user participation, often limiting access to a designated group.

Achieving Consensus in Permissioned Networks

In permissioned blockchains, the consensus process is meticulously orchestrated. Here's a simplified outline:

• Users initiate transactions, which are then shared across the network.

• These transactions undergo scrutiny by a set of pre-determined validators. These validators, often handpicked by the blockchain's governing body, play a pivotal role in maintaining the network's trustworthiness.

• Once verified, transactions are grouped into blocks.

• A consensus mechanism, often requiring a supermajority agreement among validators, determines the transaction order and finalises the state of the blockchain.

• Upon consensus, the block is added to the chain, cementing a permanent, tamper-proof record of transactions.

Consensus Protocols in Permissioned Blockchain Systems

Permissioned blockchain systems deploy various consensus mechanisms to ensure transaction validation and network integrity. Some prominent protocols include:

1. Proof of Authority (PoA)

PoA relies on identity verification as the primary means to validate transactions. It is prevalent in private and consortium-based blockchain networks.

Entities or individuals, pre-approved by the network's governing authority, serve as validators. Their role is pivotal in upholding network security by ensuring only genuine transactions enter the blockchain.

Notable permissioned blockchains that employ PoA include Quorum and Hyperledger Besu.

2. Proof of Elapsed Time (PoET):

PoET introduces a randomised waiting period algorithm to validate transactions, primarily suitable for private networks where node reliability is a given.

Every participating node remains inactive for a randomly assigned duration. The privilege to initiate the subsequent block rests with the node completing its idle time first. This mechanism mimics a lottery, with nodes receiving a unique random number. A trusted execution environment (TEE) guarantees uniform waiting periods across nodes.

For example Hyperledger Sawtooth's PoET emphasises resource-efficient mining (REM).

3. Practical Byzantine Fault Tolerance (pBFT)

pBFT emphasises quick consensus even amidst node discrepancies. In this protocol, a primary node, or the leader, proposes transactions, which are then vetted by secondary nodes, termed backup nodes or validators. For a transaction to be finalised, it must garner a supermajority consensus from these validators.

The consensus mechanism in pBFT involves a tri-stage communication process: "pre-prepare," "prepare," and "commit." Once a block secures confirmation, its contents become immutable.

pBFT excels in rapid consensus but demands significant communication and resources. However, if a substantial portion of nodes gets compromised, pBFT networks might face fragmentation, making them susceptible to attacks.

Hyperledger Fabric and Corda are leading blockchain platforms leveraging pBFT.

4. Federated Byzantine Agreement (FBA) in Blockchain Networks

The Federated Byzantine Agreement (FBA) serves as a robust consensus mechanism for distributed networks, enabling nodes to reach a consensus even in the presence of faulty or malicious nodes.

FBA operates on the concept of nodes forming "quorum slices," groups of trustworthy nodes. If needed, these slices can combine to form a broader consensus group or "quorum." The system's state and decisions are then determined by these quorums.

One of FBA's distinctive features is its decentralised consensus model. Rather than having a centralised authority dictating the consensus process, individual nodes decide their preferred quorum slices.

The renowned permissioned blockchain platform R3 Corda, leverages FBA as its consensus mechanism.

5. Istanbul BFT (IBFT) Consensus Algorithm

Istanbul BFT (IBFT) is a consensus algorithm tailored for private blockchain networks, ensuring continuity even when certain nodes exhibit faults.

IBFT identifies two primary roles:

• Validators: Entities responsible for evaluating and confirming block legitimacy.

• Proposers: Nodes tasked with assembling transactions into blocks for validator scrutiny.

A proposer aggregates transactions and creates a block, which is then reviewed by validators.

For a block to be deemed valid and added to the blockchain, it must secure approval from over two-thirds of the participating validators.

IBFT is employed in platforms like the Quorum blockchain and Hyperledger Besu, facilitating state-machine replication.

Final thoughts

Choosing a consensus mechanism for a blockchain project is a crucial decision and depends on the project's needs. Parameters like scalability, security, interoperability, and following regulations are essential factors. The best choice depends on the specific requirements of the project.

Disclaimer: This article is for educational purposes only