Not limited to bitcoin.

How does blockchain developers or businesses make the decision on which consensus algorithm to choose? What are the things to consider when deciding on the consensus algorithm?

As a general user, do you choose blockchain based on the consensus algorithm they use? Why?

put on hold as primarily opinion-based by chytrik, JBaczuk, KappaDev, Pieter Wuille, Raghav Sood Dec 8 at 16:34

Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise. If this question can be reworded to fit the rules in the help center, please edit the question.

  • Why are you building your own blockchain and why does it have to have a consensus algorithm at all? Honest questions. – fiatjaf Dec 6 at 15:14
  • IF and why not? – Samantha Dec 7 at 2:45
  • I'm not judging you, it's just that your main question needs context. "build your own blockchain" is not something that one does without a purpose. – fiatjaf Dec 7 at 10:26
  • To build a blockchain to work like what a blockchain does? Isn't that a purpose? – Samantha Dec 9 at 3:23
  • What does a blockchain do? – fiatjaf 2 days ago

Generally consider what kind of security you wish to have.

POW may have 51% mining concentration, yet this actor can still be diluted anytime as new miners join the global hash rate. If people transact with higher fees, this will provide incentive for more new hash rate to join, balancing the power of the previously 51% miner. Because POW relies on external resources (external to the System of Bitcoin), it can always balance miner power.

POS suffers from the problem that a 51% miner can not be unseated without his cooperation. This miner now has the power to censor all transactions if it chooses to. Since the mining ability is proportional to stake, and the stake is internal to the system (no additional stake can be acquired externally), the system simply has no way to balance the power of a 51% miner.

Other consensus algorithms may be designed to deliver proofs in different forms (memory space, hard drive space, other resources), but always consider if these are external or internal to System. That is the key difference in system security.

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  • Does the number of connecting nodes(non mining) play a part in deciding the consensus algorithm too? – Samantha Dec 7 at 2:54

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