Consensus

The term consensus implies a consensus has been provided among the network’s users about blockchain to maintain the security of the network.

What is Consensus?

The main logic behind the consensus mechanism is that authorities are responsible for decision-making in the blockchain. The algorithm allows users or machines to coordinate the process to validate the authenticity of transactions and make sure the fundamental security of the blockchain is maintained.

Since the system is decentralized, there is no one single authority responsible for the process, instead, independent actors who have the nearly same level of authority take action and make decisions.

In the distributed database it might be hard to reach an agreement. For example, in terms of records of legitimate transactions of Bitcoin in a decentralized system, a consensus mechanism is used for the security of the blockchain. The system allows the process to work successfully.

What is Consensus Algorithm?

Consensus algorithms are algorithms in computer science that allow an agreement to be reached on certain data on distributed transactions or systems. Due to the trust-free nature of blockchain, consensus algorithms are used to ensure security.

This mechanism ensures that other users accept that assets in your digital wallet are yours. Moreover, cryptography makes sure that no other user can spend others’ coins.

Consensus Mechanisms

Even though Proof of Work is used extremely common, there are many consensus mechanisms:

• Proof of Work is based on a computational problem and is used in Bitcoin and Ethereum. In projects where PoW algorithms are used, miners need to solve the problem in order to add blocks to the chain and compete with each other to solve it first. The first miner to solve the problem gets the right to add the block to the chain as an award.
• In Proof of Stake people who have the largest holdings can validate new blocks.
• Proof of Authority is used by private companies that have the access to the blocks of vetted sources.

Learn more: Proof-of-Burn and Coin Burning