What is a Consensus Mechanism?
Simply put, a Consensus Mechanism is a necessity for blockchain protocols as it allows the blockchain to achieve agreements across a decentralised network of nodes/computers.
But why do we need a consensus mechanism to swap Cryptocurrencies?
Doesn’t matter if it is centralised or decentralised, everything needs some sort of authority. Well, the only way to pursue a decentralised world of finance and technology is by using consensus mechanisms like Proof-of-Stake (PoS) or Proof-of-Work (PoW).
The consensus mechanism ensures that the blockchain is functioning efficiently and securely, in real-time so that every transaction taking place is legitimate. While both PoW & PoS consensus mechanisms run differently, they both offer unique pros and cons.
There are other blockchains innovating and using completely new and unique consensus mechanisms like Proof-of-History, Proof-of-Authority, Proof-of-View and many others we will delve into at some point.
Follow me and turn on notifications as we will go through the Proof-of-Stake and Proof-of-Work consensus mechanisms in more detail! Understanding the difference between the two is very important.
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