Consensus

In a decentralised system, the agreement method typically involves some form of consensus, which is achieved by individual parties working together to ensure that every transaction on the network is accurate and confirmed. This is in contrast to a centralised system in which one central organisation acts as a point of authority to confirm all decisions.

There are multiple types of consensus, and blockchains like Bitcoin use a different type than, for example, Avalanche, Fantom, or Solana. The most popular consensus mechanisms are Proof of Work (PoW) and Proof of Stake (PoS).

For more on the differences between the PoW and PoS consensus mechanisms, see our University article Proof of Work vs Proof of Stake.

Key Takeaway

Consensus is how a blockchain achieves agreement in a decentralised peer-to-peer (P2P) network.

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