The process used by blockchain networks to agree on the validity of transactions.
A consensus mechanism is a process used in computer systems to achieve the necessary agreement on a single data value or a single state of the network among distributed processes or systems. In the context of blockchain, the consensus mechanism determines the validity of transactions.
Consensus mechanisms can be defined as the set of rules and processes that enable multiple participants in a blockchain network to agree on the state of the blockchain and validate transactions. They ensure that all participants reach a consensus on the order and validity of transactions without relying on a central authority.
Consensus mechanisms are responsible for achieving agreement among participants regarding the state of the blockchain. They ensure that all transactions added to the blockchain are valid and agreed upon by the network. By validating transactions, consensus mechanisms prevent issues such as double-spending, where the same digital asset is used multiple times.
The primary objectives of consensus mechanisms are to:
There are several types of consensus mechanisms used in blockchain networks, each with its own approach to achieving agreement. Some common types include:
Understanding consensus mechanisms is essential to grasp how blockchain networks achieve agreement, validation, and trust in a decentralized manner. These mechanisms contribute to the security, integrity, and resilience of blockchain technology.
Proof of Work (PoW) and Proof of Stake (PoS) are examples of consensus mechanisms used in blockchain networks.