Skip to main content

Documentation Index

Fetch the complete documentation index at: https://dev.moonpay.com/llms.txt

Use this file to discover all available pages before exploring further.

Registered Entity: MoonPay Europe B.V. Legal Entity Identifier: 254900KXWAZ3B1340G26

​
Types of Blockchain Consensus Mechanisms

  • Proof of Work (PoW): A Proof-of-Work (PoW) consensus mechanism incentivizes miners to secure the network by publishing updates to the ledger in the form of blocks, containing newly submitted and verified transactions. Miners compete to solve cryptographic puzzles, and the first to succeed earns newly minted crypto-assets (block reward) and user-paid transaction fees. Misconduct, such as attempting to add invalid blocks or rewrite the history of the ledger, results in wasted computational resources and opportunity costs, creating an economic penalty that discourages dishonest behavior.
  • Proof of Stake (PoS): A Proof-of-Stake (PoS) consensus mechanism incentivizes validators to secure the network and validate transactions by staking their own crypto-assets as collateral. Validators are selected to create new blocks based on the amount of cryptocurrency they hold and are willing to ‘stake’, rather than through computational power. If validators act honestly, they earn rewards through transaction fees; however, malicious behavior or proposing invalid blocks can lead to a reduction of their staked assets, creating an economic penalty that discourages misconduct and ensures network integrity.
  • Byzantine-Fault-Tolerant (BFT): Byzantine-Fault-Tolerant (BFT) consensus mechanisms, such as Proof of Authority (PoA), Practical Byzantine Fault Tolerance (PBFT), Byzantine Agreement (BA) or similar mechanisms, secure the network through a predefined set of validators who are trusted to validate transactions and add blocks to the ledger. Unlike open networks where anyone can participate (as in Proof-of-Work or Proof-of-Stake), BFT and similar mechanisms operate with known and vetted participants, often selected by a governing entity. Validators are incentivized to maintain the network’s integrity through monetary rewards or external motivations, such as institutional trust or regulatory obligations. Malicious actions, such as submitting invalid transactions or failing to participate in consensus, can result in penalties, removal from the validator set, or other repercussions, creating an economic and reputational deterrent to dishonest behavior. Validators reach consensus by verifying transactions and proposing blocks, and, as long as a majority of validators act honestly, the network remains secure.
  • No Consensus Algorithm: Tokens do not have an own consensus mechanism, but rely on the consensus mechanism of one or multiple underlying crypto-asset networks. Depending on the token design, incentive mechanisms arise from the utility, scarcity, or governance rights.
Sources and Methodologies: All Data provided by CCRI between 2025-06-17 and 2025-06-30. All indicators are based on a set of assumptions and thus represent estimates; methodology description and overview of input data, external datasets and underlying assumptions available at: https://carbon-ratings.com/dl/whitepaper-mica-methods-2024 and https://docs.mica.api.carbon-ratings.com CCRI does not account for any offsetting of energy consumption or other market-based mechanism as of today.