The consensus mechanism

The process of validating transactions across many nodes of a blockchain network is called “consensus mechanism”. Consensus mechanisms are necessary for blocks to maintain the accuracy and validity of their blockchains.

There are currently two main types of mechanisms used to verify transactions on the network: Proof-of-Work (PoW) and Proof-of-Stake (PoS).

PoW was implemented in 2009 by Satoshi Nakamoto as the consensus mechanism for Bitcoin, the original cryptocurrency network.

The same mechanism was then adopted from other blockchains, one above all is Ethereum.

In PoW consensus mechanism blocks are created through a process called “mining.”

Miners setup computers (or even farms of dedicated machines) to compete to solve a cryptographic puzzle, using processing power.

Once the first miner solves the problem, a block of verified transactions is added to the chain.

Of course this process requires a significant amount of electricity.