DefineDeFiWeb3 Glossary

Consensus Mechanism

The rules for how a blockchain network agrees on which transactions are valid. It's how thousands of computers stay in sync.

Example

Ethereum switching from energy-heavy mining to staking in 2022, cutting energy use by 99% while staying secure.

Related Terms

Core Concepts
Blockchain Consensus Mechanism DiagramBlockchain consensus mechanism diagram showing how cryptocurrency network nodes agree on valid transactionsHow Consensus WorksThousands of computers agreeing on the truth1TXTransactionSubmitted2πŸ“‘BroadcastTo all nodes3βœ“ValidateCheck rules4πŸ“¦BlockProposed5πŸ”’FinalizedPermanentDistributed Network of Validatorsβœ“βœ“βœ“βœ“βœ“βœ—Majority agreement (5/6) = Valid blockBad actors can't cheat because the majority of honest nodes will reject invalid transactions

βš™οΈHow It Works

  1. 1

    Transaction Submission

    User submits a transaction to the network

  2. 2

    Broadcast

    Transaction is shared with all nodes across the network

  3. 3

    Validation

    Nodes independently verify the transaction follows all rules

  4. 4

    Block Proposal

    A validator proposes a block containing valid transactions

  5. 5

    Finalization

    Majority agreement makes the block permanent and irreversible

βš–οΈProof of Work vs Proof of Stake

Featurepowpos
Security MethodComputing powerStaked capital
Energy UseVery highVery low (~99% less)
Entry BarrierHardware costToken stake
ExamplesBitcoinEthereum, Solana
Attack Cost51% of hashrate51% of stake
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