Consensus mechanisms in blockchain: a comparative analysis of performance and energy efficiency for real-time applications

Abstract

Blockchain technology has revolutionized real-time applications with its decentralized, secure, and immutable framework, wherein the consensus mechanisms play a principal role in deciding transaction speed, security, and scalability. Traditional consensus mechanisms like Proof of Work (PoW) were affected by latency and energy inefficiency, while modern alternatives such as Proof of Stake (PoS), Practical Byzantine FaultTolerance (PBFT), and Delegated Proof-of-Stake (DPoS) realize faster and scalable solutions to real-time applications for Finance, Supply Chain, Healthcare, and IoT. This survey conducts a systematic analysis of the various consensus algorithms, including PoW, PoS, PBFT, and some upcoming models like Proof of History (PoH), in regard to throughput, latency, and security and finds that PoS-based systems and DAG (Directed Acyclic Graph) systems such as Solana and Ethereum 2.0 excel over PoW for low-latency applications with thousands of transactions per second (TPS). Despite these improvements, present-day blockchain technologies are encumbered with challenges like scalability bottlenecks, interoperability challenges, and regulatory restrictions, which prompt the search for future solutions such as hybrid consensus methods (PoS + sharding), Layer-2 scaling approaches (including rollups and sidechains), and AI-based optimizations that could benefit real-time operations of blockchains without compromising security and decentralization.