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What is a Consensus Mechanism?

A protocol that ensures all nodes in a blockchain network agree on the validity of transactions and their order.

Key details

Agreement
Ensures all nodes have the same version of the blockchain.
Security
Protects against attacks and fraudulent transactions.
Decentralization
Allows for trustless operation without central authority.
Finality
Determines when a transaction is considered irreversible.

Examples

  1. 01Proof of Work (PoW) used by Bitcoin and (currently) Ethereum.
  2. 02Proof of Stake (PoS) used by Cardano and (soon) Ethereum 2.0.
  3. 03Delegated Proof of Stake (DPoS) used by EOS.