Consensus mechanism (also called consensus algorithm or consensus protocol) refers to the underlying concept a particular blockchain technology operates. It is the fundamental rule that all nodes in a blockchain must adhere to before a new block can be added to a previous block on the blockchain network.
What is a node in blockchain?
A node represents a single computer in a geographically distributed network of computers that make up a blockchain. A blockchain is a type of database that stores information in blocks in a decentralized, distributed, and transparent manner, governed by a consensus mechanism. Ethereum and Bitcoin networks are the most popular blockchain in the world, mainly owing to the tremendous success of Bitcoin.
What is the function of consensus mechanism in blockchain?
A blockchain consensus mechanism defines the requirement for block creation and transaction validation that each participant node must meet. It is the underlying protocol that ensures all nodes on the blockchain network must interact with one another under the same conditions before a block is created and successfully added to the decentralized network. For example, Bitcoin uses a Proof of Work (PoW) consensus mechanism – the first consensus mechanism created in the blockchain space. It requires that a node or group of nodes have enough computational power to validate transactions by solving complex mathematical puzzles.
A number of flaws have been identified with Bitcoin’s consensus mechanism over the years, most notably the environmental impact of vast energy consumption associated with the Bitcoin mining process. This has led blockchain developers to seek out more energy-efficient consensus mechanisms such as Proof of Stake(PoS), Proof of Authority(PoA), Proof of Burn (PoB), Proof of Elapsed Time (PoET), and Proof Of Capacity(PoC).
The full benefits of blockchain technology are yet to be unraveled as it makes its merry way to global integration and adoption across various industries. However, the essence of a working and functional consensus mechanism is evident as it determines the security, speed, and interoperability between network nodes.