The term consensus mechanism refers to any process employed to attain agreement, trustworthiness, and security in a distributed computer network. The most used consensus mechanisms are PoW and PoS.
A consensus mechanism is a process by which the blockchain network nodes agree on the validity of transactions and the network state. There are several consensus mechanisms used in the blockchain industry, including Proof-of-Work (PoW), Proof-of-Stake (PoS), and Delegated Proof-of-Stake (DPoS). Each mechanism has its strengths, weaknesses, and requirements regarding computing power, energy consumption, and security and may be better suited to different use cases.
Proof-of-Work (PoW) is the oldest and most well-known consensus mechanism. Nodes solve complex mathematical problems to validate transactions and add new blocks to the blockchain. For example, the first node to solve the problem adds the following block to the chain and is rewarded with coins or tokens.
Proof-of-Stake (PoS) is another consensus mechanism that requires nodes to stake a certain amount of cryptocurrency to participate in the network. The more cryptocurrency a node holds, the more likely it is to be chosen to validate transactions and add new blocks to the chain. This mechanism is considered more energy-efficient than PoW, but it also has some potential drawbacks in terms of centralization.
Delegated Proof of Stake (DPoS) is a variant of PoS that uses a smaller number of nodes to validate transactions and add new blocks to the chain. The community selects these nodes, which are responsible for maintaining the network. This mechanism is considered more efficient than PoW and PoS, but it also has some potential disadvantages regarding centralization and security.