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The Blockchain Consensus Algorithm

How does a leaderless blockchain function?

The introduction of Blockchain technology into the present digital realm through the creation of Bitcoin demonstrated how a decentralized peer-to-peer mechanism works without any central controlling authority. While it presented an uncorrupted system coming from a single point of failure, a healthy comparison to traditional structures can produce some questions for enlightenment.

  1. Without any central entity running operations, how are things getting done?

Elements of Consensus

Unlike in the voting process where the majority rules without considering the minority, we can define consensus as the decision that was agreed upon by the group or community which was reached after assessing that the decision is for the good of all. The elements that comprise a consensus mechanism include:

Consensus Mechanisms

Decentralization being the core nature of blockchain technology gave birth to the Distributed Ledger Technology or DLT. For it to work, a consensus mechanism must be in place. The most common consensus algorithms are: Proof of Work (PoW), Proof of Stake (PoS), and Delegated Proof of Stake (DPoS). All these mechanisms utilize DLT which means that all nodes have the same copies of database files which are auto-updated daily.

Conclusion

Public blockchains are very dynamic. It involves hundreds of thousands of participants working and mining round the clock verifying and confirming transactions on the blockchain. DLTs, therefore, must be secured with an efficient and reliable consensus algorithm to make sure that all transactions are authentic and participating nodes do agree on the DLT’s robustness.

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