Consensus mechanism

A consensus mechanism is the set of rules a blockchain uses so that thousands of independent computers agree on a single version of the ledger, even if some participants are faulty or dishonest. It decides who gets to add the next block and what happens when two versions of the chain compete.

The two dominant mechanisms are proof of work, used by Bitcoin, where miners spend electricity to compete for blocks, and proof of stake, used by Ethereum since September 2022, where validators lock up coins as collateral and can lose part of them for misbehaving. Variations include delegated proof of stake, where token holders vote for a small set of block producers, and proof of authority, where approved identities validate blocks.

The choice affects security, energy use, decentralisation and speed. An attacker typically needs to control a majority of the scarce resource, hash power or stake, to rewrite history, which is why widely distributed control matters.