What Is a Consensus Mechanism in a Blockchain Network?
A consensus mechanism is a set of rules and protocols that allows distributed nodes on a blockchain network to agree on the state of the ledger. It ensures that all participants have a consistent and accurate copy of the transaction history.
This process is essential for validating new transactions, adding them to the blockchain in a secure and trustless manner, and preventing fraudulent activities like double-spending. Common examples of consensus mechanisms include Proof of Work (PoW) and Proof of Stake (PoS).
Glossar
Distributed Nodes
Component ⎊ Distributed nodes are the individual computational components, or servers, that collectively form the decentralized network, each maintaining a copy of the shared ledger and participating in the consensus mechanism.
Consensus Mechanism
Efficacy ⎊ : The mechanism's efficacy is measured by its ability to achieve agreement on transaction ordering and state transition while maintaining a high degree of decentralization and finality.
Proof of Work
Consensus ⎊ Proof of Work establishes trust in a decentralized network through computational effort, fundamentally altering the cost structure of digital consensus.
Proof of Stake
Principle ⎊ Proof of Stake, or PoS, is a class of consensus mechanism where network participants, known as validators, secure the blockchain and validate new transactions by committing or "staking" a certain amount of the network's native cryptocurrency.