What is Consensus?
Consensus refers to the process by which a decentralized network, such as a blockchain, comes to an agreement on the validity of transactions or data without a central authority. In the context of cryptocurrency, consensus is essential for ensuring that all participants in the network maintain a synchronized ledger of transactions, preventing fraud or double-spending.
The most common consensus mechanisms in cryptocurrency are Proof of Work (PoW) and Proof of Stake (PoS). In Proof of Work, miners solve complex mathematical problems to validate transactions, while in Proof of Stake, validators are chosen based on the number of coins they hold and are willing to “stake” as collateral. Both methods aim to secure the network and ensure that only legitimate transactions are recorded on the blockchain.
Consensus mechanisms are fundamental to the decentralized nature of cryptocurrencies, ensuring trust and transparency among users without relying on intermediaries.
