Stellar Consensus Protocol

Description

Tomi Kalmi:

"At the core of Stellar’s stellar performance is its own consensus protocol, the Stellar Consensus Protocol (SCP). It is based on Federated Byzantine Agreement system, but instead of a predetermined set of trusted nodes, every node is able to pick the nodes they trust to validate transactions. For instance, user A could determine that in order for it to accept a transaction, user B and user C must also accept it. This way the consensus is built of many "quorum slices", which should intersect and together yield a system-wide consensus. This gives the benefit requiring only a small subset of the nodes to validate transactions, they are resolved very fast on average while still maintaining decentralization.

In practice the most commonly trusted nodes would probably be ran by some large institutions, such as banks and other financial institutions, but also some NGOs.

Instead of explicitly choosing individual nodes which to trust, users can specify larger groups of nodes, from which they want enough validating nodes. For example, there could be a group of nodes operated by major banks, lets call this "Tier 1". Another group, lets call it "Tier 2", could consist of nodes operated by major NGOs. Users could then specify, e.g., that they want 40% of Tier 1 nodes and 50 of Tier 2 nodes to validate a transaction before agreeing that it is valid. This mitigates the risk of blocked state in the case that one of the user-specified nodes is offline." (https://wiki.p2pfoundation.net/Comparison_of_Blockchain-Based_Technologies_for_Implementing_Community_Currencies)