📝 Definition:
A consensus mechanism is a way for all the computers in a blockchain network to agree on which transactions are valid.
It ensures that everyone in the network has the same information and that the blockchain is secure.
🔑 Key Features:
- Decentralization: Consensus mechanisms enable decentralized decision-making, allowing multiple nodes to agree on the blockchain state without a central authority.
- Security: These mechanisms protect the network from attacks and ensure that only valid transactions are added to the blockchain.
- Incentives: Participants, such as miners or validators, are often rewarded for their role in securing the network and validating transactions.
- Efficiency: Different mechanisms have varying levels of efficiency, affecting transaction speed and energy consumption.
⚙️ How It Works:
- Transaction Proposal: Transactions are proposed to the network.
- Validation: Nodes or validators check the transactions against the rules of the blockchain.
- Consensus Achievement: Through various methods (e.g., Proof of Work (PoW), Proof of Stake (PoS)), nodes agree on which transactions are valid.
- Block Addition: Once consensus is reached, which mean the majority of actors on the network agree, a new block is added to the blockchain.
💡 Applications:
- Proof of Work (PoW): Used by Bitcoin (BTC), where miners solve cryptographic puzzles to approve transactions.
- Proof of Stake (PoS): Used by Ethereum 2.0 (ETH), where validators are chosen based on the number of coins they hold and are willing to lock up.
- Delegated Proof of Stake (DPoS): Used by EOS (EOS), where stakeholders vote for delegates to validate transactions.
🔍 Example:
Imagine a group of friends deciding on a restaurant.
They propose different options and discuss them.
Through a voting system, they agree on the most popular choice.
This group decision-making process is similar to how consensus mechanisms work in blockchain, ensuring everyone agrees on the current state of the network.