What is Consensus Mechanism ( Consensus Mechanism ) ?
Consensus Mechanism (Consensus Mechanism) is a fault tolerance mechanism used in computer systems and blockchains to reach the necessary agreement about a single data value or a single state of the network between processes. distributed or multi-agent system. It is useful in record keeping, among other things.
How does Consensus Mechanism (Consensus Mechanism) work?
In any centralized system, like a database containing key information about driver’s licenses in a country, the central administrator has the authority to maintain and update the database. The task of making any updates – like adding/removing/updating the names of those eligible for certain licenses – is performed by a central authority who is solely responsible for maintaining Genuine profile.
Public blockchains operate as decentralized, self-regulating systems that operate on a global scale without any authority. They involve the contributions of hundreds of thousands of participants working on verifying and validating transactions that occur on the blockchain and on block mining operations.
In the dynamically changing state of the blockchain, these public shared ledgers need an efficient, fair, real-time, functional, reliable, and secure mechanism to ensure that all transactions Translations occurring on the network are genuine and all participants agree on a consensus on the status of the ledger. All this important task is performed by the consensus mechanism, which is a set of rules that determine the contributions of the various participants of the blockchain.
There are different types of consensus mechanism algorithms that operate on different principles.
Proof of Work (POW) is a popular consensus algorithm used by the most popular cryptocurrency networks like Bitcoin and Litecoin. It requires a participant node to prove that the work done and submitted by them is eligible for them to receive the right to add new transactions to the blockchain. However, this whole Bitcoin mining mechanism needs high energy consumption and longer processing time.
Proof of Stake (POS) is another popular consensus algorithm that evolved as a low-cost, low-power alternative to the POW algorithm. It involves allocating responsibility for maintaining the public ledger to a participant node in proportion to the number of virtual currency tokens held by it. However, this comes with a drawback that it promotes crypto savings, rather than spending.
Similarly, there are other consensus algorithms such as Proof of Capacity (POC) that allow sharing of the memory space of contributing nodes on the blockchain network. The more memory or hard drive a node has, the more authority it has to maintain the public ledger.
What is Blockchain?
What is Proof of Work (PoW)? What is Proof of Stake (PoS)?
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