The ABBC Blockchain is made to be better for all our existing community members and our target audience. Among its massive upgrades is the deployment of the ABBC DAO that promotes further transparency and collaboration, allowing the smooth overall functionality of the network.

Seeing blockchain as the bigger picture and the DAO as its working force, we can now go behind the scenes and learn more about the underlying ABBC consensus protocol that will keep the decision-making process organized, secure, and more scalable.

As we now have a better idea of who can influence the network, understanding how they can do this will give us more clarity on blockchain technology’s competence to real-world use cases.

You may have heard or read about ‘consensus’ for many times if you are dealing with or interested in blockchain and cryptocurrencies. Before we go into details of what consensus really is and how important it is in the network, let us first determine the ensemble that it is a part of — blockchain governance.

Defining Blockchain Governance

A blockchain is known to be a distributed digital ledger that keeps track of information, making sure that everything is recorded, no duplications are done, and any alterations must acquire a majority of support from the community.

To be able to cater to the growing demands that each user entails to the blockchain, proper governance is needed.

Blockchain governance pertains to the capability of the network to achieve the long-term sustainability of its structure.

For instance, an institution that offers higher education to approximately 15,000 students requires a governing body to ensure that all colleges and departments are delivering a quality learning environment that impacts the overall reputation of the school.

Blockchain governance also works in a similar manner. To keep up with the user base and the continually evolving digital ecosystem, blockchain must adapt and upgrade to maintain its stability and security.

Typically developers, block producers (BPs), and token holders take charge of the governance. Categorized into two, blockchain governance could be considered as off-chain or on-chain.

Off-Chain Governance

Off-chain governance implements a “committee” type of approach in terms of having any software upgrades or protocol changes. Bitcoin and Ethereum followed this model as the community is given the power to decide which they think is better for them before the final ruling is made.

The communication between the members takes place in community forums and public chats. Once the individual decisions are taken into consideration, either the core developers or dominant players will have the interim decision.

On-Chain Governance

On-chain governance follows the “code is law” mindset wherein a certain set of procedures will be followed by all community members to ensure that the objectives are met for the common good. Most projects see this model as more flexible and stable than the former one.

Through a direct voting technique, the community seems to be in a democratic state as whichever gets the majority of votes is automatically executed. It saves more time and more logical in terms of structure and competence.

With on-chain governance looking to improve the level of performance of blockchain, the question of scalability, decentralization, and security comes in.

Scalability Trilemma

In life, we came to realize that you can’t really have it all. A college student may have the time and strength to do countless things, but lack of money is the problem. A working adult might have the strength and money to do whatever comes to mind, but time is restricted. A retired individual might be rich has lots of time to spend, but will not be strong enough anymore.

One way or another, we have to adjust and try to get the best out of the resources that we have. The same problems are present within a blockchain.

The so-called Scalability Trilemma was a term from Vitalik Buterin, Ethereum’s founder. It raises the question regarding the correlation between security, scalability, and decentralization.

It refers to the tradeoffs that are being done to optimize a blockchain. Depending on its specific use case, one aspect is often comprised of the others.

Security is the top-most priority of blockchain technology. Operating in a series of cryptographically-guarded transactions, the network is meant to be resistant to any cybersecurity risks. But the pace of digital change invites varying threats.

As industries around the world are becoming open to blockchain adoption, the primary objective of this innovation is to become as scalable as possible. A scalable blockchain will be able to cater to more transactions and activities in the network without adversities.

To be able to respond to the high-scalability demands, the decentralization property of a certain blockchain is either strengthened or doubted by the critics. The block producers (BP) involved in the block confirmation process are compelled to be efficient and unbiased for the sake of the whole ecosystem.

Bitcoin, Ethereum, and others have faced serious challenges as they attempt to increase the speed and throughput performance of their platforms. What causes a system to achieve one set of trade-offs than the other is the combination of consensus mechanism and system architecture.

With numerous attempts to achieve a balance between the three, the consensus algorithm of blockchains becomes a significant factor behind these plans.

Why Consensus Matters?

The blockchain requires a lot of checking and verification from thousands, or even millions, of nodes from different parts of the world. With this amount of workload, there is a tendency of inefficiency in the network. A common ground must be set for all participants.

In layman’s term, a consensus is the process done by the entire group when reaching for an agreement for a certain task. When the consensus decision-making has been agreed upon by the entire group, considering that it will benefit everyone, it is then referred to as ‘consensus mechanism’.

In the blockchain point-of-view, the consensus is a vital aspect to keep all the operations intact. Having cryptocurrency as a use case, all the participants should aim to work together to avoid double-spending and discrepancies within the network. The key is having everyone to actively work in block confirmation, without any bias and malicious intent.

A solid consensus protocol can guarantee the fault tolerance and security of the blockchain.

Based on an analysis done by Korean students of Sangmyung University, consensus protocols currently used in most blockchains can be broadly divided into two categories: probabilistic-finality and absolute-finality consensus protocols.

1. Probabilistic Finality: Refers to the type of finality provided by chain-based consensus mechanisms. It simply translates that the likelihood of a transaction to not be changed or reviewed any longer increases once the block has been linked to a longer chain.

One good example is the Proof-of-Work (PoW) consensus wherein miners strive to solve a cryptographic puzzle to validate a block and receive their rewards. It guarantees eventual consistency as every miner (node) needs to constantly adjust the value of nonce to get the correct answer to the puzzle, requiring more computational power.

With this, the probability that a transaction will be finalized depends on the number of validated blocks connected to each other. The deeper it is in the blockchain, the less the possibility of it getting reverted.

2. Absolute Finality: On the other hand, refers to the type of finality provided by Practical Byzantine Fault Tolerance (PBFT) based consensus. Here, a transaction is immediately considered finalized once it is validated and added to the blockchain.

Theoretically, PBFT has five phases wherein the primary node forwards the message to the other three nodes. Even if one node crashes, the other nodes must complete a round of consensus, ensuring strong consistency and practicality for the network.

Along with PoW, first-generation blockchain consensus algorithms (Proof-of-Stake and Delegated Proof-of-Stake) offers a high probability of finality that grows with time. These are considered more scalable than the absolute finality, in terms of the number of nodes.

Essentially, when we talk about consensus, you can think of every block as a blank canvas. There’s a common image that needs to be formed by each person. Once the canvas is filled with different lines and shapes, everyone will come together and check the closest version of the common image to be selected by the majority.

The consensus is a way to ensure that the nodes on the network verify the transactions and agree that everything is valid and nothing is repeated. While consensus algorithms are designed to make it possible for the network to agree, blockchain’s ability to be fault-tolerant is a solution for situational divergence.

Blockchains are designed to be the answer for the Byzantine Generals’ Problem as the network will come to a consensus despite the fact that some members may misbehave.

This solution might become dysfunctional. Therefore blockchains must continue to establish trust and confidence through consensus mechanisms.