Consensus Mechanisms and Mining Flashcards

What is 'Proof of Burn' consensus and what is its primary theoretical benefit?

Answer: Participants destroy cryptocurrency to earn the right to mine, creating a verifiable cost without ongoing hardware requirements

Proof of Burn requires participants to send coins to an unspendable address, creating an irreversible sunk cost that grants mining rights proportional to coins destroyed.

What is the 'CAP theorem' and how does it apply to blockchain consensus design?

Answer: Consistency, Availability, and Partition tolerance cannot all be simultaneously guaranteed; blockchains must choose two

CAP theorem states distributed systems can guarantee at most two of Consistency, Availability, and Partition tolerance; PoW chains sacrifice consistency (probabilistic finality) for availability and partition tolerance.

In Avalanche consensus, what is the 'snowball' mechanism?

Answer: A repeated random sampling process where a node queries peers and shifts preference based on majority responses until confidence thresholds are met

Avalanche's Snowball algorithm has each node repeatedly sample random subsets of peers, updating its preference toward the majority answer until the network converges with high probability.

What is the significance of the 'difficulty bomb' in Ethereum's transition from PoW to PoS?

Answer: It was an exponentially increasing difficulty adjustment designed to make PoW mining progressively impractical, encouraging the move to PoS

The difficulty bomb was deliberately coded into Ethereum to exponentially slow PoW block production over time, creating an 'ice age' that would force the network to transition to Proof of Stake.

What is 'Tendermint' consensus and which projects use it?

Answer: A BFT-based PoS consensus engine providing instant finality, used as the foundation for Cosmos SDK chains

Tendermint is a BFT consensus algorithm providing deterministic finality after each block, forming the consensus layer of the Cosmos SDK and chains like Cosmos Hub and Binance Chain.

In mining economics, what is the 'block subsidy' and how does it change over time in Bitcoin?

Answer: The newly created Bitcoin awarded to the miner who finds each block; halves approximately every four years

The block subsidy is the amount of new Bitcoin created per block (starting at 50 BTC), which halves every 210,000 blocks (~4 years) in an event called the 'halving,' ultimately capping supply at 21 million BTC.

What distinguishes 'chain-based' PoS from 'committee-based' BFT PoS consensus?

Answer: Chain-based PoS selects a validator per slot who extends the longest chain (probabilistic finality); committee-based BFT uses voting rounds for deterministic finality per block

Chain-based PoS (like early Ethereum beacon chain proposals) mimics PoW's fork-choice rule with validators, while BFT committee consensus (like Tendermint) uses multi-round voting to commit blocks with absolute finality.