Theme 11: Consensus Mechanisms in 2022

2022 Snapshots Theme 11: Consensus Mechanisms in 2022

▪ The most prevalent consensus mechanisms are Proof-of-work (PoW), Proof-ofstake (PoS) and Delegated proof-of-stake.

▪ Fourth-generation blockchain solutions could resolve prior challenges and emphasize easy to use business-oriented interfaces.

▪ Recent advancements of Ethereum’s mechanism from Proof-of-work (PoW) to

Proof-of-stake (PoS) overcome the extreme energy consumption of prior design, paving the way to higher adoption.

2Q22

The ‘merge’ of Ethereum mainnet with the Beacon chain

Core thesis

Consensus mechanisms are critical components to a blockchain network and function to build consensus while ensuring security. Existing consensus mechanisms have evolved, and others have grown in popularity to meet the needs of blockchain technology.

Significance and Disruptive Impacts

New consensus mechanisms are being developed to incentivize investors and make their transactions more secure, fast and cost-efficient.

Expectation for 2022

1. Competition between smart contract platforms Blockchain projects compete and complement Ethereum 2.0 to become the most robust smart contract platform. (See Interview with Bowie Lau, True Global Ventures)

193M TH/s

BTC total hash rate (Jan 22) 2. Fourth-generation blockchain solutions New or improvements in consensus mechanisms will address speed and scalability challenges, increasing the maturity of blockchain’s distributed capabilities.

3. New blockchain use cases A perfect blockchain consensus mechanism does not exist yet. The growing number of new blockchain use cases will help drive the evolution, improvements, and developments of blockchains.