It seems confusing, overly technical, and sometimes downright impossible to the average person to understand. How can you create something of value, out of thin air? Where does it come from? How does it work?
While seasoned individuals in the crypto space have a solid understanding of the mechanisms that actually create cryptocurrency, to explain it completely to a beginner can pose a challenge. To do our part in educating the public on this fascinating and forward-thinking technology, we’re creating a series of guides, explaining some of the most common, and not so common, consensus mechanisms. We will publish them through the next 10 days, leading up to the launch of our platform – Saving the best for last, of course. Without further ado, let’s dive in to the wonderful world of consensus mechanisms.
Let’s break down this seemingly complex term to start; Consensus:
1 a: general agreement: unanimity.
“The consensus of their opinion” based on reports … from the border” —John Hersey
b: the judgment arrived at by most of those concerned the consensus was to go ahead.
2: group solidarity in sentiment and belief.
In the term, “Consensus Mechanism,” the word “Consensus” holds the traditional meaning; for a group to come to an agreement. But, in this case, the group is not people, but computers rather. For a solution to be found, and blocks produced, all the computers in a blockchain network must agree. The consensus mechanism is the method by which the network comes to this agreement. When consensus is reached, blocks are produced. When blocks are produced, the crypto coins are created. You may also hear computers working on a blockchain network, referred to as “nodes”.
Consensus mechanisms vary widely. Some of the most established blockchains, such as Bitcoin and Ethereum, use the “Proof of Work” system. Others use what’s called “Proof of Stake”. These are the two most well-known consensus mechanisms that exist today. In our series, we’ll break these terms down into easily digestible, and understandable explanations. We’ll also cover some lesser known systems.
Different systems are used by different networks, all trying to outperform the last. Each consensus mechanism has its strengths and weaknesses. Some are superior, and some – well, we aren’t even sure yet. This emerging technology has some way to go from a technical standpoint, but we’re positive that it’s here to stay.
This is perhaps, one of the most fascinating aspects of blockchain – It can’t be broken. It can’t be modified, and it can’t be erased. Because all nodes work independently of one another, in a distributed network – It can’t just be shut down. Hundreds and thousands of nodes operate independently, and cooperatively at the same time. And, because all must agree on, or come to consensus on transactions, they cannot be forged to store incorrect data. A blockchain is immutable, and absolute proof that a transaction took place.
This feature is one of many that allows for improving countless industries with the application of the technology. There’s no room for corruption, dispute, or questionable data. Imagine for a moment, that every industry in existence, had to work with complete transparency to the public. Imagine, if that system, couldn’t be broken, or erased. Here’s the best part – now imagine, that individuals, citizens, inhabitants of the world, and people that these systems really effect, controlled these systems, rather than corrupt politicians and greedy corporations.
That’s the type of world that blockchain has the power to create.
If you’ve gotten this far, you’re well on your way to be a part of the small population that truly understands blockchains, and cryptocurrency. Our series is designed to give you a comprehensive understanding of the innerworkings of these systems, and to teach you the differences between them. We’re just beginning to tap into the true potential of this intriguing technology. And our project is committed to utilizing it for every capability it has to offer.
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