What does the Consensus Process mean?
The Consensus Process ist a term in use with the Blockchain.Basically, cryptocurrencies renounce a central, regulating organization and instead focus on the aspect of decentralization.
The decentralization and the autonomy of the blockchain play a decisive role in this. However, the exclusion of official organizations means that reliability must be guaranteed for the prevention of fraud and theft in the context of Blockchain.
In order to meet these requirements, all transactions of the network are stored in a blockchain, which is to be understood as a sequence of several blocks. Due to the peer-to-peer nature of the network, the property of the entire blockchain is copied multiple times and stored on different nodes.
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Another basic condition is to maintain the integrity of the blockchain. To ensure this, a consensus must be established which ensures that the various nodes of the network must match the contents of the blocks.
What is the purpose of the Consensus Process?
The consensus process is used to ensure consensus within the blockchain. The consensus process can be represented by several models.
The best-known model is known as the Proof of Work. In this case, a confirmation of a transaction takes place only if the users solve a mathematical problem, which gains in difficulty over time.
The users who perform this task are referred to as miners and receive tokens of the appropriate currency for the work done.
The consensus can also be guaranteed by the Proof of Stake. In this case, active mining is dispensed with and instead set to the transaction confirmation by other users.
In return for this work, an annual interest is guaranteed. The latest approach is called Proof of Authority.
This transaction is confirmed by validators so that a particularly fast transaction time can be guaranteed.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.
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