Whether it is a centralized or decentralized platform, it is important that everyone follows the rules, and there are mechanisms that play a role in the crypto network. Wanna know about this mechanism? The answer is a consensus mechanism, and this particular mechanism is important to run a decentralized system smoothly. Staking Solana or Ethereum, exploring the latest cryptocurrency, or even if you are trading BTC, consensus is there to make it possible.
We all know what is happening in the centralized finance world, and there are third parties, central authorities like financial firms and banks that manage and process these things. Unlike crypto, we have to depend on third parties and a middleman. In the crypto world, anyone can join it, and everything will be operated through a peer-to-peer system, and there is no third-party or single-party dominance. But here the question arises, and that is how all nodes know about it and follow it.
On that node issue, the consensus mechanism takes entry, and this particular mechanism operates things in such a way that multiple systems agree on a single source. That does not matter, the participants are anonymous and they are from any country or even suspicious.
Right now, the most famous consensus mechanism is POW, whose full form is proof of work. This mechanism is most famous because of Bitcoin, and BTC is the door to crypto world. How does this system work? Miners have to solve the difficult mathematical puzzles, and the winner will be the miner who does it first, and they will own the newly minted crypto. This process is consuming energy.
This is the best alternative to POW, and it is gaining more popularity because this particular mechanism is energy-efficient. This system depends on the stakeholders who stake their crypto, or in other words, who lock their crypto, and they become validators to run this beautiful system. For that, you have to stake more crypto, and every crypto has different rules. There is no need for electricity.
There is a third one which we are very familiar with because Hive blockchain relies on it, and that is the delegated proof of stake mechanism. This is unique, useful, and the best mechanism, and the underrated blockchain called Hive is successfully running on it. There is scalability in DPOS, fast and cheap transactions, more decentralization, high security and safety, and more. So this is a hidden hero that is running blockchain from the background, but if you understand blockchain with a little technical perspective, then you can understand all these types of mechanisms easily and their benefits too.
Crypto networks are nothing without a consensus mechanism. There are drawbacks and losses in the POW mechanism, and often this mechanism has faced criticism; it is obvious. What are your opinions, viewpoints, and objections? Let me know, and also focus on contributing to me.
"Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking." -Steve Jobs