Chapter Seven - Consensus mechanisms and information security technologies


Distributed Ledger Technology (DLT) helps maintain and distribute predefined types of information and data in a decentralized manner. It removes the reliance on a third-party intermediary, while securing information exchange and creating shared truth via transaction records that are hard to tamper with. The successful operation of DLT stems largely from two computer science technologies: consensus mechanisms and information security protocols. Consensus mechanisms, such as Proof of Work (PoW) and Raft, ensure that the DLT network collectively agrees on contents stored in the ledger. Information security protocols, such as encryption and hashing, protect data integrity and safeguard data against unauthorized access. The most popular incarnation of DLT has been used in cryptocurrencies, such as Bitcoin and Ethereum, through public blockchains, which requires the application of more robust consensus protocols across the entire network. An example is PoW, which has been employed by Bitcoin, but which is also highly energy inefficient. Other forms of DLT include consortium and private blockchains where networks are configured within federated entities or a single organization, in which case less energy intensive consensus protocols (such as Raft) would suffice. This chapter surveys existing consensus mechanisms and information security technologies used in DLT.

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