Decentralized networks use consensus mechanisms, also known as consensus algorithms or protocols, to establish verifiable, legitimate, and unified databases. Individual nodes in a peer-to-peer network perform a series of actions in order to authorize data. The type of method utilized determines these tasks. For performing consensus tasks, bitcoin blockchains reward certain nodes – sometimes known as validators or miners – with native cryptocurrency. These algorithms rely on nodes to show ownership of valuable resources such as processing power or large holdings in a coin. The Proof of Work and Proof of Stake algorithms are the two most common types of consensus techniques. Other approaches include the Delegated Proof of Stake mechanism, the Proof of Authority mechanism, and the Proof of Activity mechanism. Consensus mechanisms guard against some forms of economic threats, such as 51% attacks.
