In the world of blockchain consensus algorithms, everyone well-known about the importance of blockchain as well as consensus mechanism because consensus is the heart of the blockchain network and its main purpose is to achieve agreement on agreed transactions among a distributed system (on the blockchain).
This article will explore what is blockchain consensus algorithms? & Why it is so necessary? And What is the types of consensus algorithms are role play in blockchain network?
You already know that each and every online transaction that you make on an immutable blockchain network is completely verified and secured, but have you ever wondered why, or more importantly, how? Well, this is where blockchain consensus algorithms come into play, as there are several different ways in which various blockchain networks can both verify and secure a block of transactions on its network.
Here we will explain what is Consensus Algorithms?
Let’s see,
What is Consensus Algorithms?
A decentralized network like a blockchain needs rules and processes so that multiple nodes can reach an agreement on the true state of the network. These sets of rules and processes are called consensus algorithms.
Even though many different consensus algorithms have been discovering for various blockchain networks, proof-of-work and proof-of-stake variations remain the most widely used mechanisms for reaching consensus.
Why is a consensus mechanism necessary?
To understand different types of consensus algorithms, we must first understand why cryptocurrencies use a consensus mechanism. Since there is no central entity in the blockchain network that verifies transactions, this work must be done comparatively by the nodes.
The blockchain rules out some nodes from creating money from nothing, but there may be misleading nodes trying to spend a currency twice, the so-called double spending.
For example, a fraudulent user could buy some goods in an online store and suddenly try to send the same tokens to exchange.
To avoid this double spending, the nodes must reach an agreement on which transactions to consider valid and which not.
The easy solution could be that each and every node votes for which transactions to include within a block and which not, but unfortunately such solutions would be weak. In fact, a malicious user could create thousands of nodes and manipulate the vote.