How Does Consensus Work?

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.

Types of Consensus

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).

Key Takeaway

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

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