Consensus mechanisms
What is a consensus model? A consensus model (also known as a consensus algorithm or consensus protocol) is a mechanism that networks of connected computers use to work in tandem to maintain security.
There are various consensus models, and there are new ones being created all the time, with different features and benefits, but the main ones that are currently the most used are Proof of Work, and Proof of Stake, here’s how they work.
Proof of Work (PoW)
In the Proof-of-work model, miners compete to create new blocks of information on the blockchain. They do this by competing to solve a complex math puzzle. Whichever miner solves the math puzzle first gets to create the new block, and as a result earns a reward in the cryptocurrency native to that network, for example, BTC on the bitcoin blockchain.
Upon being created, the new block gets shared with the rest of the nodes on the network who then check it for any false or fraudulent information and then verify that block.
Security
The way the proof of work stays secure is by the fact that one would need over 51% of the computing power on the network in order to defraud the blockchain. This would require such a high investment into the equipment and energy that it would be almost impossible and probably not even worth it, especially on a large blockchain.
Proof of Stake (PoS)
In the Proof-of-stake model, validators get to participate in the system by staking their cryptocurrency. Of those who have a stake in the network, a validator is randomly chosen to create a new block – that validator is then rewarded. Upon the new block being created it is shared with the rest of the nodes on the network, checked, verified, and then added to the blockchain.
Security
The way proof of stake stays secure is by the fact that one would need over 51% of the native cryptocurrency of the network in order to defraud the blockchain. Furthermore, your staked crypto will be slashed (taken away) for engaging in malicious behavior, this incentivizes validators to engage in trustworthy behavior.