A blockchain consensus algorithm is a set of rules and procedures that allow the nodes in a blockchain network to reach agreement on the validity of transactions and the state of the distributed ledger. The consensus algorithm is a crucial component of blockchain technology, as it ensures the integrity and security of the network without the need for a central authority.
The main purpose of a blockchain consensus algorithm is to solve the "Byzantine Generals' Problem" - how to achieve reliable consensus in a distributed system where some nodes may be unreliable or even malicious.[1][3] Consensus algorithms enable the nodes in a blockchain network to validate transactions, add new blocks to the chain, and maintain a consistent, tamper-resistant record of all transactions.[1][3]
Some of the most common blockchain consensus algorithms include:
Proof-of-Work (PoW): Used by Bitcoin, this algorithm requires nodes to solve complex mathematical puzzles to validate transactions and add new blocks. The node that solves the puzzle first is rewarded with new cryptocurrency.[2][3]
Proof-of-Stake (PoS): In this algorithm, the right to validate transactions and add new blocks is based on the amount of cryptocurrency a node holds, rather than computational power. Nodes with more stake in the network are more likely to be selected as validators.[3]
Delegated Proof-of-Stake (DPoS): Similar to PoS, but nodes elec...
