What are consensus mechanisms?

Updated on 22 June, 2022 2:57 PM
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    Introduction to Consensus Mechanism

    Blockchain, by its very nature, is a technology that relies on a distributed ledger system. It means that there’s no central authority controlling the operations of the chain. Fundamentally, every network needs a few controllers/ mechanisms so that the network functions smoothly. As in the case of a decentralized world, there can’t be a single authority controlling the entire operations of the chain. To solve this issue, here comes the concept of a consensus mechanism.

    Consensus means “general agreement” and mechanism means “method/ methodology”. In simple words, to check up on the happenings of the chain, a methodology is being set on every blockchain which is called a consensus mechanism.

    Technically, the consensus mechanism is the way by which the nodes - the computers on the blockchain validate the transactions happening on the chain. As per the official Ethereum website, a consensus mechanism is a set of protocols or consensus algorithms that allow distributed systems (networks of computers) to work together and stay secure.

    Need for Consensus Mechanism

    The need for a consensus mechanism arose in order to prevent bad players from capturing the network. Bad players may include persons doing multiple false transactions etc.

    Consensus mechanisms also solve the problem of double-spending by making it expensive and difficult to propose a new block of validated transactions, discouraging bad actors from trying.

    Similarly, the mechanism incentivizes the "good" nodes to propose blocks they genuinely believe will be accepted to receive valuable rewards.

    Types of Consensus Mechanisms

    Proof of Work

    Proof of work is the original consensus mechanism that was first used by bitcoin. Under this mechanism, to validate a transaction, all miners need to solve a complex mathematical puzzle. The one who solves the puzzle the fastest is the winner and gets to upload & validate the transaction. The winner is also rewarded with a pre-determined amount of crypto. As everyone has to solve the puzzle and only one gets to win the transaction, a lot of developers realized this early that this method is time-consuming as well as consumes a lot of energy. Hence, it’s not sustainable and scalable. This led to another consensus mechanism called proof of stake.

    Read more about What is Proof of Work? to understand the concept in depth

    Proof of Stake

    Proof of stake is the updated version of proof of work to validate the transaction on the chain. Under this mechanism, the miners (called validators here) get a chance to stake their native crypto in exchange for getting the chance to validate a transaction and hence win some reward. A winner is selected on the amount of crypto each validator has in the pool and the duration of time they’ve had it there. It is meant to reward the most invested participant.

    Read more about What is Proof of Stake? to understand PoS better

    Proof of History

    Proof of History is an evolved version of Proof of Stake. A Solana native mechanism, proof of history works on validating a transaction based on previous historical events. It employs the Verifiable Delay Function, which calculates the time based on historical occurrences. After analyzing these occurrences, a hash function is

    constructed that can be confirmed by anybody. Every block created by the network has this hash appended to it.

    You can read more about What is Proof of History? to understand better


    The main aim behind every consensus mechanism is to validate a transaction in the best possible manner and remove bad players from the network. Proof of Work is still being used on many chains including bitcoin and ethereum, Proof of Stake is considered to be the future with its easy scalability and sustainability. Proof of History, though, an updated version, still remains native to Solana amongst mainstream blockchains

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