We now learnt that Blockchain is a distributed decentralized network that provides immutability, privacy, security, and transparency. There is no central authority present to validate and verify the transactions, yet every transaction in the Blockchain is considered to be completely secured and verified.
In the previous articles, we learnt how transactions are grouped into blocks and added to the network. However, this only happens once the network participants have reached an agreement, or CONSENSUS, on the validity of the transactions.
The word consensus comes from Latin meaning, “agreement, accord.”
This ensures that all participants are working based on the same ledger containing the same set of historical transactions hence they are incentivized to “play by the rules,” boosting the security of the whole system and preventing the corruption of files.
Essentially, the consensus protocol makes sure that every new block that is added to the Blockchain is the one and only version of the truth that is agreed upon by all the nodes in the Blockchain.
Let’s now have a look at the two most used and developed consensus algorithms and how they work: