What is a Normal Transaction?

A typical transaction on the Ethereum blockchain refers to the simple transfer of Ether (ETH) or tokens between two wallet addresses.

These transactions are initiated by users and are directly recorded on the blockchain, making them easy to track.

Characteristics

• User-Initiated: A normal transaction is typically initiated by an individual or entity sending ETH or tokens from one address to another.

• Recorded on the Blockchain: All normal transactions are permanently recorded on the Ethereum blockchain, providing a transparent and immutable record.

Let’s take a look at Hyperledger Besu, one of the representative private blockchains based on Ethereum, used in enterprise environments.

First, there’s a question: Blockchain’s fundamental concept is aimed at decentralization with a focus on public transparency, so doesn’t the concept of a “private” blockchain contradict that?

The basic concept of a private blockchain is its use in corporate or personal environments.

In short, it means creating another Ethereum world tailored to the needs of the builder.

Types of Major Consensus Algorithms

1. Proof of Work (PoW)

• Description: A method where network participants compete to solve very complex mathematical problems to create blocks. The node that solves the problem first earns the right to add a new block.
• Examples: Bitcoin, Ethereum (pre-2.0).
• Pros: High security and operates in a decentralized network without centralized authority.
• Cons: Extremely high energy consumption and slow transaction speeds.

2. Proof of Stake (PoS)

• Description: A method where nodes obtain the right to create blocks based on the amount of cryptocurrency they hold (stake). The more stake, the higher the chance to add a new block.
• Examples: Ethereum (2.0), Cardano, Polkadot.
• Pros: Energy efficient and faster block generation compared to PoW.
• Cons: Potential centralization by nodes with large stakes.

3. Delegated Proof of Stake (DPoS)

• Description: Users elect a set number of delegates who are responsible for creating blocks. These representatives are chosen by network participants through voting, and they perform block verification and generation tasks.
• Examples: EOS, Tron, Steem.
• Pros: Faster transaction speeds than PoS and energy efficiency.
• Cons: Risk of centralization due to reliance on a small number of elected nodes.

4. Proof of Authority (PoA)

• Description: A small, trusted group of validators are responsible for creating blocks. These validators must be verified as trustworthy within the network and are responsible for adding blocks.
• Examples: VeChain, certain private blockchains.
• Pros: Very fast and operates efficiently in a trusted environment.
• Cons: High likelihood of centralization and reliance on a small group of validators.

5. Delayed Proof of Work (dPoW)

• Description: Provides an additional security layer by using the hash power of an existing PoW blockchain to secure a secondary chain. The secondary chain leverages the security of the primary PoW chain.
• Example: Komodo.
• Pros: Utilizes the security of existing PoW blockchains while increasing efficiency.
• Cons: Dependency on an existing PoW chain.

6. Byzantine Fault Tolerance (BFT)

• Description: A method to address the Byzantine Generals Problem, allowing the system to continue functioning correctly even if some nodes act maliciously or fail to respond.
• Examples: Hyperledger, Tendermint.
• Pros: Provides high security and ensures reliable outcomes even with untrustworthy nodes.
• Cons: More complex than PoW or PoS and may slow down as the network grows.

7. Practical Byzantine Fault Tolerance (PBFT)

• Example: Hyperledger Fabric.
• Features: Requires more than half of the network nodes to reach the same state for consensus.

8. QBFT (Quorum-based Byzantine Fault Tolerance)

• Description: QBFT is a consensus algorithm in the BFT family that requires the approval of more than half of the nodes in the network to reach consensus. Developed to maintain both security and efficiency while tolerating Byzantine faults, it is an evolution of the PBFT algorithm.
• Example: Used in Hyperledger Besu, it is known to be well-suited for enterprise blockchains.
• Pros: Even if malicious nodes are present, the network can securely reach consensus as long as there is a majority of trustworthy nodes. It also does not consume as much energy as PoW and can process transactions quickly.
• Cons: As the network size grows, communication costs for consensus increase, which may degrade performance. The larger the number of nodes, the slower the network becomes.

QBFT is primarily used in enterprise blockchain environments, where it balances Byzantine fault tolerance with performance and scalability.