From the March 2016 London Cloudcamp focused on Blockchain and/or Bitcoin... www.cloudcamp.org

1. © 2016 IBM Corporation
It’s not all about mining
By Dave Gorman (IBM)
gormand@uk.ibm.com
1

2. © 2016 IBM Corporation 2
What is Consensus?

3. © 2016 IBM Corporation 3
Consensus
• … the process by which transaction are verified
• When participants are anonymous
– Commitment is expensive
– Bitcoin cryptographic mining provides verification for
anonymous participants but at significant compute
cost (Proof of Work)
• When participants are known & trusted
– Commitment possible at low cost
• Multiple alternatives
– Proof of Stake where fraudulent transactions cost
validators (e.g. transaction bond)
– multi-signature (e.g. 3 out of 5 participants agree)
– PBFT (cross checked secure message exchange)
• An industrial Blockchain such as Hyperledger needs
“pluggable” consensus
Proof of
Work
Proof of
Stake
PBFT
Practical Byzantine Fault Tolerance (PBFT) (1999, Castro & Liskov)

4. © 2016 IBM Corporation 4
Summary
§ Proof-of-work is very CPU intensive but required for un-trusted and
anonymous participants.
§ Requires mining to solve complex cryptographic puzzles.
§ Miners are rewarded for solving the puzzle.
§ Proof-of-Stake and PBFT are more efficient but require trusted and
permissioned networks.
§ No mining required.
§ Nodes or peers are not necessarily rewarded for building blocks.
Practical Byzantine Fault Tolerance (PBFT) (1999, Castro & Liskov)

5. © 2016 IBM Corporation
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