Consensus mechanisms in the blockchain: a simple introduction for beginners

When it comes to blockchain technology, one of the most important aspects is ensuring the integrity and security of transactions. This is achieved through the use of so-called consensus mechanisms. In this article, we would like to give you, as a beginner, a simple overview of consensus mechanisms and explain why they are crucial.

What is a consensus mechanism? A consensus mechanism is a set of rules or a protocol used in a blockchain network to reach an agreement on the validity of transactions. Since there is no central authority that verifies the transactions, the participants of the network must come to a common agreement to ensure that only valid transactions are included in the blockchain.

Why is a consensus mechanism important? The consensus mechanism plays a crucial role in ensuring the security and integrity of a blockchain network. It prevents fraudulent transactions from being carried out or double spending. Without a consensus mechanism, anyone could add arbitrary transactions to the blockchain, which would lead to chaos and manipulation.

How does a consensus mechanism work? There are different types of consensus mechanisms that are used in different blockchain networks. Here are some of the best known:

1. Proof of Work (PoW): In PoW, network participants have to solve mathematical puzzles to create new blocks and validate transactions. This requires a lot of computing power and energy. The first participant to solve the puzzle is rewarded and their block is added to the blockchain.
2. Proof of Stake (PoS): With PoS, blocks are not created by solving puzzles, but based on the possession of a cryptocurrency. The more coins someone owns, the greater their chance of creating a new block and validating transactions.
3. Delegated Proof of Stake (DPoS): With DPoS, the validation of transactions is delegated to selected delegates. These delegates are elected by the network participants. DPoS enables faster transaction confirmation, as only a limited number of delegates have to make decisions.

There are also other consensus mechanisms such as Proof of Authority (PoA), Proof of Elapsed Time (PoET) and many more. Each mechanism has its own advantages and disadvantages, and the choice depends on the specific requirements and goals of the blockchain network.