Concordium is a science-backed blockchain with a core focus on decentralized identity. It's the only L1 blockchain that offers a built-in self-sovereign identity feature wherein every user's real-world identity is authenticated without compromising their privacy. The Concordium blockchain is designed to be fast, secure and cost-effective.

A major innovation in the Concordium blockchain, documented in multiple scientific papers, is the two-layer consensus approach, which combines a Nakamoto-style consensus blockchain with a novel finalization method, providing very fast finality.

To continue providing maximum value to users and many projects building on it, Concordium is taking the consensus protocol to a level higher.

In this article, we present a high-level overview of the benefits of ConcordiumBFT, the new HotStuff-based consensus protocol to be rolled out in 2023.

Here is a summary of the major advancements and benefits the upgrade will bring to the Concordium ecosystem:

• Consistent and faster block production - the ConcordiumBFT consensus ensures that blocks are produced more consistently and, on average, a lot faster. Compared to the current Nakamoto-style consensus, the block speed may be around twice as high or higher. 

• Consistent and fast finalization - as a consequence of more consistent and faster block speed, the confirmation time for transactions is also consistent and faster providing a best-in-class user experience.

• Higher TPS - fast block speed and finalization ensure that the TPS will increase significantly as well, supporting even the most advanced use cases.

• Improved baker management - ConcordiumBFT will enable bakers to better manage their nodes so, for example, node software upgrades will have less impact on block rewards by enabling them to know in advance when their turn is coming up.

• Transparency over baker performance: To support the long-term growth of the Concordium blockchain, the quality of the nodes in the network is important. Current data suggest that well-run nodes are able to attract more delegators. The upgrade increases the transparency of baker performance and therefore will give delegators better metrics when choosing which baker to delegate their stake to.

Sounds great right? Want to know more about how ConcordiumBFT actually works, then keep reading.

What is ConcordiumBFT?

ConcordiumBFT Introduces HotStuff Based Consensus Protocol.png
ConcordiumBFT Introduces HotStuff-Based Consensus Protocol

ConcordiumBFT is based on the HotStuff consensus protocol. It is designed to support highly-available, fast and secure, distributed systems. It is used to reach agreement on the order of events in a network of nodes and is particularly well-suited to blockchain systems. HotStuff is based on a type of consensus algorithm known as a "Byzantine fault tolerance" (BFT) algorithm and has been shown to provide faster and more efficient performance compared to other BFT algorithms.

The version of HotStuff used to build ConcordiumBFT is the Jolteon implementation, and however technically complex, we love the simplicity in its design. Here is how it works: 

1. A Proof of stake-based lottery system (verifiable random function) produces a list of bakers. The higher the baker’s stake, the higher the probability of occurring on the list more often. 

2. The first baker on the list (Bob) makes a new block that appends to the genesis block. 

3. Bob then broadcasts the block to the finalizers.

4. If the block is valid, the finalizers will sign it. 

5. If the combined stake of the finalizers, who sign the block > ? total stake, the block gets a Quorum Certificate (QC) that certifies that this is a valid block.


6. The next backer (Alice) now needs the QC to produce the next block. Note that here, by design, the new block can only extend the previous block whose QC is presented to Alice. Hence there is no issue of fork formation as in the case of Nakamoto-style consensus design. 


7. If there are no issues, the protocol loops over this process from step 3. 

So far so good. The HotStuff consensus design seems simple. There is one complication though under which the protocol in its raw form would completely break: a faulty baker who does not produce a block or produces an invalid block. 

A faulty baker scenario is handled by a timeout mechanism - if Bob does not produce a block within a certain time, a Timeout Certificate (TC) is issued to move the process forward. Alice can now use the TC instead of the QC to extend the previous block


ConcordiumBFT has consistent and predictable fast finality wherein the first among two consecutive certified blocks are automatically considered final.


Now, why don’t we just consider the previous block to be final if it has a QC? This is to cover edge cases where network delays cause the QC of a block to not be received by the next block producer before a timeout. In that case, the block gets skipped by the next block producer and thus it cannot be considered final. We resolve this issue by only considering the first among two consecutive certified blocks to be final. Together with carefully designed rules for handling timeouts, this ensures that finalized blocks form a chain and can never be rolled back.


Concordium remains a market leader

With the ConcordiumBFT implementation, the Concordium blockchain remains at the forefront of blockchain performance as it is efficiently balancing speed, capacity and security to the benefit of the many use cases relying on the Concordium infrastructure to support their goals. When combined with the upcoming Web3 ID upgrade of Concordium’s already market leading approach to self-sovereign identity, based on verifiable credentials, a significant business potential is unlocked for the entire Concordium community.