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A mining farm is a structure that consists of special equipment aimed at mining cryptocurrency. The main incentive for creating a mining farm for its owner is the opportunity to generate income. Profit generation occurs upon finding blocks of cryptocurrencies that use the Proof-of-Work algorithm. The most interesting of them are Bitcoin, Ethereum, Grin, Bitcoin Gold, Monero and others. The profit will depend directly on the number of devices on the mining farm and on the cost of its maintenance.In most cases, large farms work in warehouses and hangars. If this is a small installation, then the miner can place it at home.To determine the equipment, namely its efficiency, miners use special services-calculators. Such resources give an approximate idea of earnings in a certain period of time.We will tell you later in the article about which mining farms are better to use, how to install them and how much you can earn on this.What is a mining farm?Types of farms for miningCPU farmsGPU farmsFPGA farmsASIC farmsHow the mining farm worksWhat you need for a mining farmAccessories for mining farmsThe necessary characteristics for profitable miningThe ratio of power and energy consumption of the deviceMemory size and speedComplexity of operationHow to choose mining equipmentHow to build a farm for miningPreparing for the installation of a mining farmHow to make a mining farmSetting up a farmHow and where to buy a mining farmMining Farm PricePayback of the mining farmWhat cryptocurrencies to mine on a farm in 2021GrinBitcoin GoldZencashZclassicRavenCoinMining farm with your own hands — useful tips and guidanceInstalling the caseInstalling the motherboardInstalling the power supply unitAdding a GPUBuying a ready-made mining farmWhat is a mining farm? A mining farm is a powerful computer system configured for cryptocurrency mining. In simple words, this is an installation that consists of two or more units of special devices located in one place, and aimed at mining cryptocurrencies by implementing complex calculations.So, as they are solved, the miner receives a reward, while the new extracted block, which directly contains this solution, is added to the cryptocurrency blockchain.In fact, managing a mining farm is no different from mining on a single device - the only difference is in scale.Thousands of pieces of equipment can work simultaneously on mining farms. It is for this reason that their main location is in areas with cheap but stable electricity supply. Note that the manufacturers of mining equipment own one of the largest mining farms in the world.And although it may seem that only the richest companies can manage a mining farm, in fact, everyone can create a similar one. All you need is a couple or more devices and an Internet connection. In addition, mining cryptocurrencies on a smaller scale is still profitable these days.Types of farms for mining CPU FarmsThese are constructions that implement the mining process based on the operation of the central processor.Today, CPU farms are the least efficient option for mining, but they still have the right to exist.After all, while mining bitcoin, Litecoin, Ethereum using central processors is initially a failed idea, CPU farms are great for mining cryptocurrencies using the Scrypt algorithm (for example, Dogecoin or DigiByte). Such farms are mainly popular among miners engaged in mining little-known coins, which in the future will probably be able to unlock their potential.GPU farmsThey are specialized electronic circuits that are commonly used in computers and gaming systems. In this case, they perform a wider range of operations, that is, cryptocurrency mining.Miners use the computing power of video cards to mine the widest range of coins. And although video cards are bundled with any computer, usually high-quality GPUs with higher computing power are used on this type of farms. Most often, video cards are used for mining Ethereum.  FPGA farms Field Programmable Gate Array - devices that support programmable matrices, thanks to which, in fact, the process of cryptocurrency mining is carried out. This type is interesting to miners not because of the speed of production, but due to energy efficiency.So, if a typical video card with a bandwidth of 600 MHz/s consumes up to 400 watts of energy, then the FPGA provides a data transfer rate of 826 MHz/s with a power consumption of about 80 watts.But this is their only advantage, and therefore this type of farms has not been widely recognized among miners.ASIC farmsThese are constructions made of specialized integrated circuits designed to process a specific blockchain. And although ASIC miners are more expensive than their alternatives, the performance of these farms is also much higher than that of competitors. This type will be the optimal solution for mining coins on the Bitcoin, Bitcoin Cash or Litecoin blockchains.How the mining farm works Let's start with the fact that the power level of the mining farm is ten times higher than this indicator for a home computer. In addition, this power is directed to a single operation (cryptocurrency mining), and is not used to support programs and the system as a whole, unlike, for example, the CPU.The result of the work depends on the number of devices and power. Note that miners participate in mining not for the sake of pleasure, but, first of all, for the sake of money.As the farm starts, the equipment performs complex calculations aimed at finding a specific number that satisfies one pre-defined and well-known condition, after which a block is created for which the miner receives a reward.So, the greater the power aimed at decoupling these calculations, the faster the solution will be found, and, consequently, the sooner the reward will be received.In order for the farm to work efficiently, its condition must be monitored. Depending on the scale, both one person and an entire team can monitor the correct operation of the equipment.It is necessary to regularly check the system for possible errors and information about the operation of mining pools.To avoid getting viruses and other malicious software into the system, it is not recommended to download firmware for overclocking equipment from third-party resources.If devices with a hashrate indicator that do not comply with the standards are detected, the problems should be confirmed and resolved in a timely manner. If the problem is not fixed on the spot, then the equipment should be given for repair or returned to the manufacturer for maintenance.What you need for a mining farm In order for the mining farm to bring the desired income, its owner needs to take care not only of the correct assembly of the structure, but also of certain components that will facilitate its maintenance.Accessories for mining farmsFor an effective mining process, the farm must consist of the following components (let's look at the example of a farm for mining from video cards):The motherboard. A powerful motherboard will be able to increase the working life of the farm (ASRock, AFOX, Gigabyte, Asus).The power supply unit. Mining consumes a huge amount of electricity. It is recommended to use a power supply with a power of at least 750 W, depending on the needs (GreenVision, Chieftec, Aerocool).Processor (AMD, Intel).Video cards. The optimal number of cards for one farm is 4-6 units, with a speed of at least 400 x / s (Nvidia, AMD, Sapphire, Gigabyte, Asus).RAM. For the installation to work effectively, you will need at least 4 GB of RAM.Vertical-mounted cables help connect graphics cards to the motherboard (Atcom, HQ Tech, Cablexpert).The hard disk, in fact, is only needed to install the mining farm software (from 60 to 120 GB is enough).You will need a fan for additional cooling (NSI, Zotac Polit, Gigabyt).The Linux operating system is considered the best operating system for mining. However, Windows or iOS are still excellent alternatives to it.Accessories - monitor, keyboard, mouse and USB cables. You will need them to set up a mining farm.The case for assembly - will help to fix all the components of the installation.The necessary characteristics for profitable miningThe selected mining farm must have certain characteristics so that its owner receives income from mining:The ratio of power and energy consumption of the deviceFirst of all, we pay attention not only to the cost of mining equipment, but also to its return. The fastest payback is the main goal of every miner. Therefore, the ratio of power and energy intensity will directly affect the amount of income received.Memory size and speedThey affect the availability of algorithms for mining. Cards with a small amount of memory are unable to extract a large range of hashing algorithms.The amount of memory of a mining farm based on video cards must be at least 4 GB.The efficiency of mining depends on the speed, and, accordingly, its profitability.Complexity of operationWhen it comes to video cards, the best option here is an installation that includes from 4 to 6 GPUs.On the other hand, the number of installed video cards directly affects the stability of the farm, as well as the level of complexity of configuration and operation — respectively, the fewer of them, the easier it is to configure the farm.How to choose mining equipmentNote that only cryptocurrencies built on the POW consensus mechanism participate in the mining process.However, since different blockchains use different algorithms (SHA-256, Equihash, X11, and others), the hardware requirements differ for each coin mined.Read more: What is SHA-256In many cases, devices are designed to solve only one of these algorithms. For example, the equipment used for mining Monero (XMR) will be less effective when mining Bitcoin (BTC) or even inefficient. But at the same time, the mining of many cryptocurrencies can be implemented on the same device. The choice and the expected financial result will depend on the coin.How to build a farm for mining Decide on the room.Decide on a coin for mining;Create a wallet for storing coins;Install mining software;Join the mining pool;Set up a mining farm.Below you will find a description of each step with all the details.Preparing for the installation of a mining farmThe first step is to determine the scale of the activity. If this is an installation that includes up to several dozen cards, then it can be assembled at home. But if these are hundreds, or even thousands of devices, then there can be no question of a residential building. First of all, they are very noisy and have a high heat transfer. This may cause inconvenience when placing in the apartment.In addition, mining farms require certain conditions for effective operation, including moderate humidity and indoor temperature, in the presence of a powerful source of electricity.You should decide in advance which cryptocurrency will be mined by the mining farm. To determine the most profitable coins, they usually use yield calculators, which will be described below. As soon as the coin is selected, it remains only to decide on the equipment and start mining.But how will the user get his coins if he does not have a wallet for storing cryptocurrencies? Yes, in any case, you will have to create a cryptocurrency wallet. This can be a mobile application, a hardware device or a web application that will receive a reward with the possibility of subsequent storage.Next, we join the mining pool, install the software and configure the mining farm.Note that currently professional miners mainly use farms made of GPU and ASIC. But the latter are much more efficient at mining than the GPU, given their targeted functionality.How to make a mining farmWhen buying equipment, first of all, it is worth checking it for damage. This can be either an already assembled mining farm, or its components for assembling with your own hands.So, we start with checking the cables. Next, the graphics processors, the power supply and all other accessories are connected to the motherboard. We check the GPU drivers for the fact that they are updated and proceed to the next stage.Setting up a farmAt this stage, you should download the mining software: BFGminer, CGminer, NiceHash. Note that this software is freely available, you can download it on the developer's website or through unofficial binary files for Mac users.Let's look at the configuration process using the example of the CGminer program.We load the program and execute the following command line arguments:Unpack cgminer into a folder. We give the folder a name.We clamp the Windows and "R" keys at the same time.Enter "cmd" and press "Enter".We use the cd command, then go to the directory where the cgminer zip file was downloaded.Enter "cgminer.exe – n".So, next, a list of devices available on the computer will appear, among which there will be customizable video cards.If the list of available video cards does not appear, it means that the settings were made incorrectly and the procedure should be repeated.At this stage, the miner should already have a cryptocurrency wallet registered and an account created in the mining pool. As we get access to the pool data, we enter commands into the bat. file, activating it with a double click. Here is the guide:«C: \ Cgminer \».The URL of the mining pool server.The server port number.The user's username.The name of the Worker.Password.Cgminer software shows the hashing speed of both CPU and GPU.Note that on average, the data processing speed on video cards is about five times faster than mining on the processor.How and where to buy a mining farm The purchase process should not cause any special inconvenience. The main thing is to decide on the right model. So, you can make a purchase either directly from the equipment manufacturer or from its dealers.As for the first option, in this case, the consumer protects himself from overpayments and possible fakes, but in return he receives it only after a few months. Of course, if it is on the shelves of the manufacturer at all.In most cases, dealers instantly disassemble models that are in demand among miners. Therefore, if the manufacturer does not have equipment due to increased demand, or because of decommissioning, then you can search for the model on sites specializing in the sale of mining equipment. When buying equipment on the dealer's website, it will be delivered much faster, although the price may be an order of magnitude higher. In addition, if the search for new models has not been successful, then there are a large number of resources on the Internet offering used equipment for purchase.To buy a mining farm, it will be sufficient to specify the model of the requested equipment in the search bar, after which a list of sites offering similar models for purchase will appear.In addition to Internet sites, sellers place ads for the sale of equipment on thematic forums, in specialized groups in social networks, in Telegram messengers, etc.Mining Farm Price For competitive mining, miners must invest in powerful hardware, such as a GPU or ASIC. But how much does a mining farm cost? The design will cost the buyer from a thousand dollars to several tens of thousands, depending on the scale of activity.Equipment prices are very unstable and are subject to changes every day. There is a high probability that the miner will be lucky to buy a used structure in good condition, which will be an order of magnitude cheaper than buying a new one.Note that miners prefer farms made by Nvidia. Compared to AMD, the "green" video cards produce coins with greater efficiency and with much less energy consumption.Payback of the mining farm Mining is one of the most profitable ways to get coins. But this activity requires a willingness to invest. Thus, the miner needs to have good equipment before starting production.But even if you build an expensive non-standard rig for cryptocurrency mining, no one can guarantee its profitability. In order to calculate how much profit a miner will receive from the operation of a mining farm by mining a certain coin, you should use the profitability calculator. Such a service will give an idea of the approximate terms of return on investment based on the calculation of the daily profit from the work of the farm.  Here are some examples of popular services:CryptoCompare is another popular mining profitability calculator. For calculations, you must specify the following parameters: hashing power, the cost of energy consumption and the size of the pool commission (if necessary). The calculator will calculate the profit coefficient per day or per month.WhatToMine offers to calculate the income from mining on the GPU and ASIC. It is only necessary to select the necessary equipment and the system will automatically calculate the hashrate. However, it is worth noting that the user interface of this resource is not as easy to use as in previous services.Let's look at the example below to see what profit miners get from cryptocurrency mining. For example, if you decide to mine Ethereum on a farm of 4 Nvidia 1080Ti video cards, the income will be about $3.41 per day or $85 per month.In addition to the power and energy intensity of the equipment itself, when calculating the payback of the installation, it is worth considering:The cost of equipment to support miners, including shelves for its installation, power supplies, cables, accessories, and the like.The cost of electricity during the operation of all devices, in addition to the mining farm.The cost of uninterrupted and stable Internet access.Network complexity (the level of complexity increases over time).The equipment can quickly become outdated, and therefore there is a need to update the components.Costs incurred due to downtime. The equipment tends to fail, so it is necessary to take this point into account when calculating the profitability of mining.Shipping costs and customs fees.The cryptocurrency exchange rate. This factor is the most unpredictable of all, and there is always a chance that the mined coin will become worthless. Thus, there are no guarantees that the investment will pay off, even if the cryptocurrency market goes up.What cryptocurrencies to mine on a farm in 2021 Before you start mining any cryptocurrency, it is worth studying its course and evaluating the prospects for development. A useful tool for this is the analytical service CoinMarketCap.Below is a list of the TOP 5 coins that are interesting for mining in 2021:GrinGrin is a relatively new cryptocurrency based on the Cucatoo31+ and CuckARood29 algorithms. It is interesting from the side of ensuring the confidentiality of transactions, which are based on the MimbleWimble technology.Grin has an unlimited number of coins, which certainly attracts miners. The complexity of mining changes dynamically in accordance with the hashrate of the network. Reward for mining: 60 GRIN per block. The current market value is $0.44 according to CoinMarketCap.Bitcoin Gold The Bitcoin Gold project officially started on October 24, 2018. The main task is to return mining from large farms to PCs, for which the transition from the SHA-256 algorithm to Equihash was carried out.Thus, the Bitcoin Gold cryptocurrency does not support mining on ASIC.Mining reward: 12.5 BTG per block. The current market value is $27.9 according to CoinMarketCap.ZencashZencash is a representative of a fairly extensive family of cryptocurrencies based on the Zerocoin protocol, released in May 2017. At the same time, the cryptocurrency was formed as a fork of Zclassic (a fork of Zcash). Zencash can be called an intermediate solution between the previous two. ZEN miners get 88%. The current market value is $46.14 according to CoinMarketCap.ZclassicZclassic is another fork of the popular and widely used cryptocurrency Zcash. The fundamental difference from the parent coin is that the entire reward goes to the miners, and 20% of the extracted ZEC goes to the addresses of the developers. The current market value is $0.28 according to CoinMarketCap.RavenCoinThis fork of bitcoin appeared in 2018 and already boasts high liquidity. Today, the cryptocurrency occupies the 57th position in the CoinMarketCap rating with a market capitalization of more than $159 million. It uses the X16R algorithm and the PoW protocol. Mining reward: 5000 RVN (blocks are mined every minute). The current market value is $0.15 according to CoinMarketCap.In addition to the above cryptocurrencies, it may be interesting to double mine coins like LBRY or DECRED on additional GPU memory. It is better to mine coins on the processor, such as Loki, Monero or Sumocoin.Watch a useful video on how to properly assemble a mining farm and make cryptocurrency mining more profitable in 2021:Profitable mining farm in 2021 Mining farm with your own hands — useful tips and guidanceCreating a mining farm with your own hands may be of interest to those miners who do not want to spend money on buying a ready-made structure.Installing the caseThe first thing we need is a case. It is recommended to use an aluminum frame, as they are more rigid and flame-repellent, unlike wooden ones. It will help to hold the equipment. If the farm consists of 4 video cards, you can use an old computer case, a box, a rack, etc. as a frame.Installing the motherboardPlace the motherboard on a flat, non-static surface and carefully insert the cable into the connector. Place the motherboard in the case and secure it with screws.Be careful that the motherboard does not touch the metal surface, since metal surfaces are current conductors.Installing the power supply unitIt is necessary to connect the motherboard to the power supply. It is advisable to connect all additional cables that may interfere. Sometimes it can be difficult to fix the wires carefully, so be patient.The next thing you need for the GPU. This is to take the power cables and place them next to each place of the GPU along the structure.Adding a GPUBefore you start connecting the GPU to the motherboard socket, fix them in the case. After that, connect all the cables to the GPU. The advantages of mining on the GPU will outweigh mining on the processor. So, a mining farm on a GPU will cost more than a CPU, but it will have a higher hashing power. It will also support the mining of a wide range of cryptocurrencies with different hashing algorithms, which also brings additional benefits.A mining farm assembled with your own hands can be cheaper from a financial point of view, but it is unlikely to justify itself in terms of time and labor costs compared to the finished design. Therefore, before choosing a solution, it is necessary to carefully calculate everything.  Buying a ready-made mining farmIf you want to start mining as soon as possible, buying a pre-mounted farm may be the best solution. It will cost more, but it will save time (in the sense that the miner will be able to start returning his money much faster).Many companies offer to buy a ready-made assembly at a price of $2000 or more, depending on the selected characteristics.Any of them will pay off in at least a year. If there is no experience in creating farms, then it is better to go this way.Note that in addition to the difficult assembly, it will take much more effort to manage a large mining farm on the GPU than when managing an ASIC data center. In this regard, large players choose the second option, leaving mining on video cards to small companies and individuals.If a miner can afford mining on an ASIC farm, then he will get not only a simpler farm, in terms of equipment management, but also more efficient cryptocurrency ...

The consensus algorithm is the rules by which blocks are generated in the blockchain. Depending on the algorithm used, some blockchains have a mining mechanism for extracting new coins, while others have staking, some networks work faster, but are subject to centralization, others are slower, but it is difficult for unscrupulous network participants to take control of them. Therefore, it is important to understand the differences between PoW, PoS, PoA and other consensus algorithms in order to correctly assess the prospects of a blockchain project. We have made a detailed guide on the most popular consensus algorithms presented in advanced blockchain projects.What is the consensus algorithm in the blockchainLet's start with the basics. Blockchain is a decentralized network of blocks containing various data. In cryptocurrencies, these blocks store information about all operations within the network. All blocks are written to the network sequentially one after another and are connected in a chain. In this case, each block contains information about all the previous blocks. You can't delete, edit or change anything from such a network retroactively - after all, you would have to rewrite the entire chain from the very beginning.In the blockchain, a special built-in mechanism called the consensus algorithm is engaged in checking operations and confirming that they are recorded correctly.The blockchain consensus algorithm is a method by which the decentralized nodes of the network reach agreement (or consensus) on the current state of data in all blocks. A node is any computer connected to the blockchain that verifies and confirms transactions, and stores a copy of the blockchain.The consensus algorithm guarantees compliance with the protocol rules and the reliability of all transactions. In other words, it is responsible for ensuring that all nodes of the network agree with the addition of a new block to it. In this way, the consensus algorithm maintains the integrity and security of the network.At the same time, it is important to understand the difference between the consensus algorithm and the protocol:The protocol is the rules of the blockchain, according to which the network nodes interact, transaction data is transmitted and block mining is confirmed.The consensus algorithm is a mechanism for checking the implementation of the rules: whether the balances and signatures are correct, whether all transactions are correct.For example, Bitcoin and Ethereum are protocols, and Proof-of-Work and Proof-of-Stake are consensus algorithms.There are many variants of consensus algorithms. Let's take a closer look at the most popular among the best blockchain projects.Proof-of-Work (PoW)Proof-of-Work is a consensus algorithm that was first introduced in the network of the first Bitcoin cryptocurrency.A little history. The concept was first introduced in 1993, and in 1997, Adam Back, one of the contenders for the role of Satoshi Nakamoto, developed the Hashcash algorithm based on it, which was supposed to protect email from spam. In 2004, Hal Finney, another candidate for the role of Satoshi, suggested using PoW for electronic currencies. And in 2008, this algorithm was used by Satoshi Nakamoto himself in his cryptocurrency bitcoin. Later, Proof-of-Work (PoW) was also used in the blockchain of other early cryptocurrencies: Litecoin, Ethereum (before the launch of the update that launched the multi-year transition to PoS), Bitcoin Cash, Bitcoin Gold, Dash, Dogecoin, Monero and Zcash.The essence of PoW is as follows: network nodes (miners), in order to confirm transactions and not allow other participants to spend the same coins twice, must solve complex mathematical problems (hash functions). The node that first found the solution receives a reward — new coins of the network. At the same time, the complexity of mining protects the network from possible threats in the form of DDoS attacks, 51% attacks (when attackers gain control over transaction confirmation and block creation) and other types of attacks. If the tasks were too easy, attackers could easily break into the network.PoW was a breakthrough for its time and allowed the launch of the first cryptocurrencies. It makes the network decentralized and resistant to hacking.So, Bitcoin is almost impossible to crack — you would need a quantum computer and huge resources to gain control over the network.But with the popularization of cryptocurrencies and their mass introduction, the disadvantages of this algorithm began to become more noticeable. Moreover, now these vulnerabilities hinder and limit the development of early cryptocurrency projects.Among the main disadvantages of PoW:Mining is too energy-consuming. Many nodes in the network compete with each other, constantly performing complex calculations. But in fact, most of them work in vain, since the reward goes to only one node. Bitcoin mining consumes more energy than countries such as Switzerland or Greece; Users have to pay miners fees for verifying transactions. The busier the network, the higher the commissions in it. For small transactions, the commissions may even exceed the amount of the transfer itself;Low speed and poor scalability. PoW - blockchains are sorely lacking in speed. For example, the maximum throughput of the Bitcoin network is only 7-10 transactions per second. Such low indicators are not suitable for mass and everyday use;Centralization of miners who unite in pools. This reduces the security of the network, increases the complexity of mining and contributes to the growth of commissions.Proof-of-Stake (PoS)Proof-of-Stake is a consensus algorithm presented at the Bitcointalk forum in 2011 as an alternative to PoW. The purpose of this algorithm is to try to correct the main disadvantages of PoW, in particular, low speed and weak scalability of the network.In 2012, this algorithm was first integrated into the blockchain of the PPCoin cryptocurrency (currently PeerCoin). Today, such blockchains as Cardano, Binance Chain, IOTA, Nano, TRON, TomoChain and Ziliqa work on the basis of PoS. And in December 2020, after several years of development, the Ethereum network also began the transition from PoW to PoS as part of the launch of the Ethereum 2.0 version.There is no mining in PoS. Instead of solving mathematical problems, new coins are mined through staking-a mechanism that allows adding new blocks by proving ownership of the cryptocurrency of this network, which was previously also called forging. The nodes of such a network are called validators,and their balance is called a steak. The more coins a node has in its wallet, the more chances it has to confirm a new block and get a reward.Thus, staking can be compared with a bank deposit. The more coins are frozen in the network, the higher the reward. For validators, this is an opportunity to earn passive income.But staking, as well as mining, requires expenses and technical knowledge. To become a validator, you need to have the minimum required number of coins. For example, in Ethereum 2.0, this is 32 ETH (about $41,000 at the current exchange rate). These coins must be kept locked in the wallet for at least several months. You will also need to configure the equipment and keep it constantly connected to the network.The main advantages of the PoS algorithm:Low power consumption compared to PoW algorithms;No special equipment is needed (miners);High speed and scalability. For example, the speed of the TRON network is 2,000 transactions per second;Low commissions;Participation in the development of the project. Validators should take part in voting on the future development of the project.The main drawback of the PoS algorithm is the threat of centralization. The validators with the most coins will eventually control most of the network. Therefore, in recent years, blockchain developers have introduced new versions of the PoS algorithm, which will be discussed below.Proof-of-Authority (PoA)Proof-of-Authority is a consensus algorithm that takes into account the "merits" and the rating of validators. It is considered an effective mechanism for private blockchains, was first conceptualized in 2014 by one of the creators of Ethereum, Gavin Wood, and has been used for several years in the Microsoft Azure cloud platform, which includes more than 200 products and services.PoA is a kind of attempt to combine PoW and PoS. There is no mining at all, and, therefore, there is no race of computing equipment, as well as huge energy costs. In PoA, validators do not use the power of the equipment or the number of coins to generate blocks, but their own reputation.Thus, a fixed number of validators who were selected by network participants or project developers are responsible for the network performance. This approach guarantees high transaction processing speed and good scalability. At the same time, validators are interested in ensuring that their work is honest and transparent, otherwise they will lose their status and reputation as a reliable network participant.The main disadvantage of PoA is the possibility of excessive centralization and the lack of motivation of users who do not receive remuneration for mining or staking. Moreover, within the framework of classical PoA, an ordinary user cannot influence the operation of the blockchain network in any way, since this is done by trusted nodes, usually belonging to the same company.Crypto projects using PoA are well aware of the disadvantages of consensus and try to circumvent them in various ways. For example, the developers of the UMI cryptocurrency, in an attempt to get rid of the restrictions of PoA, created their own variation of this algorithm. The main differences between the PoA mechanism in UMI and the classic PoA are decentralization and staking.Decentralization is achieved by dividing the nodes into two key groups:Master nodes - create blocks and confirm transactions. This is the UMI team and the main partners of the project;Validator nodes - ensure the network performance, check the correctness of blocks and monitor the operation of master nodes. Anyone can run such a node.The reward for maintaining the UMI network is available through staking. But since there is no staking in the classic PoA, the mechanism is implemented in UMI using a smart contract. A smart contract is a special program on the blockchain that automatically performs specified actions when pre-specified conditions are reached. The smart contract in UMI ensures the fulfillment of all conditions, the correct operation of the staking and accrues rewards 24/7.Here are other features of UMI staking that were achieved thanks to the smart contract:There is no need to freeze coins during staking. They can be withdrawn at any time without losing interest;Coins are credited immediately to the wallet of users who have full control over their assets;There are no requirements for a minimum stake — a user with any balance can start staking and generate new coins;Security and accessibility for everyone. The user does not need to start the node, configure the equipment and network parameters, understand the technical nuances. It is enough just to connect to one of the existing staking pools in a couple of clicks (today there are two of them: ROY Club and ISP Club) or create your own. At the same time, the pool creators do not have access to user assets, only the users themselves have it;Staking is provided with liquidity in bitcoin. In a glass on a crypto exchange SIGEN.pro More than $12 million has already been raised to support the UMI course. These funds support the exchange rate of the coin and do not allow it to fall below $0.95, while nothing prevents the UMI rate from growing.Thanks to this, the UMI ecosystem has become a unique decentralized environment for the crypto market, allowing any participant to transfer coins inside the network for free and multiply them with the help of staking, which brings up to 40% of new coins per month.At the end of 2020, the test version of the updated UMI network took the 4th place in terms of speed among other blockchains, and the average time for generating a new block in the latest version is only 1 second. Soon these changes will be integrated into the main network. All this makes UMI the optimal blockchain environment available for truly mass use. So, already now the speed of the UMI blockchain is 4,369 operations per second, after the upcoming updates it should increase to 65,535, and potentially it can reach 1 million tps and higher.Delegated Proof-of-Stake (DPoS)Delegated Proof-of-Stake (DPoS) is a type of PoS algorithm created by developer Dan Larimer in 2014. DPoS was conceived as an alternative to PoW and PoS. Its purpose is to deprive validators of the possibility of centralization. Among the well-known blockchains on DPoS: EOS, Steemit and Tezos.DPoS is a more democratic version of Proof-of-Stake. The main difference between the two algorithms is that in DPoS, coin holders (witnesses) transfer their right to approve operations and receive a reward, that is, they delegate their vote to a pre-selected validator (delegate).Any user of the network can become a delegate. But at any time, witnesses can withdraw their vote — this way allows you to avoid excessive centralization and seizure of the network by unscrupulous participants.Delegates are united in a special pool that has the right to make changes to a number of network parameters: the time of extraction of new blocks, their size, and so on. But delegates cannot cancel transactions or perform false operations. Therefore, the witnesses still have power over the network.The main advantages of the DPoS algorithm are high speed and greater scaling. There are significantly fewer nodes running on the network than in PoW or PoS, which allows you to quickly create new blocks.Among the disadvantages: with low activity of network participants, the threat of centralization remains, and it is also possible to conduct DDoS attacks and unfair behavior of delegates, which can cause network failures.Leased Proof-of-Stake (LPoS)Leased Proof-of-Stake is another version of the PoS algorithm developed specifically for the Waves blockchain.LPoS is designed to solve the problem of "property qualification" in the classic PoS, in which users with insufficient balance can not participate in staking and earn new coins. This turns into centralization.As part of the LPoS algorithm, any network participant can transfer their coins to validators, receiving a share of the profit in exchange. At the same time, the coins remain in the user's wallet, but they cannot be used, transferred or exchanged. The rental can be canceled at any time. It is profitable for validators to rent coins, as this increases their stake, and, consequently, the chance of a reward.This approach allows you to earn coins even with a small stake, but makes the network subject to centralization: validators can rent so many coins that they can control the network.Proof-of-Importance (PoI)Proof-of-Importance is another variation of the PoS algorithm developed for the NEM blockchain in 2015.Unlike classic staking, in PoI, it is important not only the number of coins blocked in the steak, but also the user's activity (the number of transactions), and the time of his stay in the network. The more active the user is and the higher his reputation in the community, the greater his income from staking. This encourages participants not to store coins in wallets, but to actively use them.In NEM, the mechanism for encouraging a staker (paying coins) is called harvesting. This is an algorithm for accounting for user activity and its balance. The accrued coins are first transferred to the user's passive wallet, and after the accumulation of "merits" are transferred to his active account. One of the conditions for starting the harvesting is a minimum steak of 10,000 XEM (≈ $2,400).Proof-of-Space (PoSpace)Proof-of-Space (also called Proof-of-Capacity, PoC) is an algorithm that uses hard disk space to confirm a block, and not the computing power of a computer. This is an unusual concept that promises high speed and democracy, but it has not received large-scale distribution among crypto projects. For example, such little-known projects as Burstcoin and SpaceMint work on this algorithm.The miner reserves a certain space on the hard disk for confirming blocks. First, sets of possible solutions to mathematical problems are generated in the hard disk, then mining itself takes place. The miner does not need to look for a solution to the mining problem — it already exists in the memory of one of the hard drives. The larger the disk memory, the more solutions can be stored there and the more chances that this particular miner will find a solution.The advantages of PoC are low energy consumption and the ability to mine from any device, even from a smartphone.Proof-of-Burn (PoB)Proof-of-Burn (proof of burning, PoB) is an algorithm that is an alternative to the classic PoW and PoS.The miner sends coins to a special address, to which it is impossible to find private keys. This means that you can't spend coins from this wallet either - they are burned. As a reward for this, the miner creates a new block and receives a reward for it in the form of new coins of the network. The more coins you burn, the higher the chances of getting a block reward.Advantages of the algorithm: low power consumption and cost-effectiveness, because you do not need to spend money on expensive mining equipment. In addition, if there is a continuing or growing demand, the algorithm can contribute to an increase in the value of the remaining coins -  because their number is constantly decreasing.The main drawback of PoB is that it is suitable only for mature projects in which the main issue of coins has already been completed, and they have something to burn. Therefore, the algorithm is not popular, but it is still sometimes used, for example, in the blockchain Counterpart (XCP).Proof-of-Elapsed-Time (PoET)Proof-of-Elapsed-Time (proof of elapsed time, PoET) is a consensus algorithm from Intel. It is considered one of the most balanced and perfect consensus algorithms and is used mainly by corporate blockchains, for example, Hyperledger.The principle of operation of PoET resembles a lottery. In each node of the network, a random waiting time is generated for a specific block - it is different each time. After that, the node is "frozen" (goes into the waiting period). The block is extracted by the node that has the shortest block waiting time. A special SGX system makes sure that all this happens really randomly.The main disadvantage of PoET is that it requires the mandatory use of an Intel Software Guard Extension processor that supports SGX.In conclusionAs the crypto market matures and blockchain technologies develop, new, more advanced consensus algorithms will appear and the current ones will be improved. They will offer the most optimal solutions to eliminate vulnerabilities and shortcomings of existing blockchain networks.It is likely that in the future, more and more blockchain projects such as UMI will begin to appear, where elements of different mechanisms for achieving consensus and receiving remuneration are successfully combined. This approach will allow you to take only the best of the mechanisms available on the market, minimizing vulnerabilities and increasing the efficiency of the ...