Consensus Mechanism

The underlying concept on which the blockchain protocol operates is known as the consensus mechanism or the consensus protocol of the network. It is that fundamental rule that all the blocks within the blockchain must follow to get added to the network.

The requirements for the creation of the block are defined by the consensus mechanism of the blockchain. It is the transaction validation that must be met by each participant of the network. This protocol ensures that all the nodes within the blockchain network interact with each other under the same conditions before the creation of a new block. The first ever consensus mechanism used in the blockchain space is Proof of Work (PoW), which is the underlying mechanism on which Bitcoin is running.

However, there are several drawbacks of the consensus mechanism used by Bitcoin, the major one being the energy it requires and the environmental impact it has. This led to the development of several other consensus mechanisms such as proof of stake, proof of authority, proof of history, proof of elapsed time, etc.

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