Consensus Mechanism is a method used in cryptocurrency to achieve agreement among participants on the validity of transactions. It ensures that all nodes in the network maintain a consistent and accurate record of transactions.
There are several types of consensus mechanisms, such as Proof of Work (PoW) and Proof of Stake (PoS). PoW requires nodes to solve complex mathematical puzzles to validate transactions, while PoS selects validators based on the number of coins they hold.
These mechanisms help prevent fraud and ensure the security and integrity of the blockchain. By requiring participants to reach a consensus before adding new blocks to the chain, the system becomes more trustworthy and resistant to malicious attacks.
Consensus mechanisms play a crucial role in maintaining the decentralized nature of cryptocurrencies, as they allow a network of anonymous participants to agree on the state of the ledger without the need for a central authority.
