Have you ever listened to the consensus mechanism? If so, most of the peeps get confused and cannot identify what it is exactly and why we use it in the decentralized network. Well, the consensus mechanism is the predefined set of rules through which the verification of transactions is done. Today, in this article we will discuss a detailed discussion in it and a variety of consensus too such as Proof of Work, Proof of Consensus, and Proof of Authority. So, without wasting more time let's get started!
What Is a Consensus Mechanism?
Consensus mechanisms are a set of rules through which the transactions are verified by the various pre-defined nodes within the blockchain network. After the successful verification, it would be stored in the distributed ledger. A distributed ledger is a kind of database that is used in a decentralized network and in this type of database, a copy of each verified transaction is stored on every single node that is a part of the blockchain network. So in this type of network called decentralized, each node acts as a server node because the record is not held by a single centralized authority. And here the concept is very basic, whenever a new transaction is initiated, it would be verified by the single node by using a consensus algorithm before reaching the distributed ledger.
Consensus algorithms come in a variety of forms, including Proof of Work (PoW), Proof of Stake (PoS), Proof of Authority (PoA), and others.
Proof of Work - PoW: Proof of Work (PoW) is a type of consensus algorithm used by the Bitcoin blockchain to verify transactions within the Bitcoin blockchain network. In this type of algorithm, the transaction would be verified by the node called miner and the process called mining. Miner nodes solve the mathematical puzzles to verify the transaction, after the successful verification of the transaction. It would be stored in the distributed ledger, and the miner receives a reward in return.
Proof of Stake - PoS: Proof of Stake (PoS) is another type of consensus algorithm used by the Ethereum blockchain, in this type of consensus, the staking process is used instead of mining to validate the transaction. In the staking method, the validator must have enough to stake so that they can get the chance to validate the transaction. Here the validator has a high amount to stake, then they have a high chance to become the validator. After the successful validation, the validator gets a specific reward from the blockchain company. And if in case the transaction fails due to any reason all the stakes will be locked by the company called slashing.
Proof of Authority - PoA: In Proof of Authority consensus there is a predefined authorized node that has the authority to validate the transaction. In this type of consensus, a node with the aim to validate the transaction must have authority first then it would be able to validate the transaction.
In the final thoughts, a consensus algorithm is a mechanism through which the transaction is validated by using a variety of consensus algorithms such as Proof of Work, Proof of Stake, Proof of Authority, and others. Consensus is the most critical part of the blockchain, because here the validation of transactions is done, and if a single transaction is not validated or verified correctly it can harm the entire blockchain infrastructure. Furthermore, the consensus algorithm eliminates the use of centralized authority and it helps each node to act as a server in the blockchain network.