# Consensus Mechanism aka **Consensus Alogirthm** *Not To Be Confused With: Social consensus (often used in discussion among developers to indicate that most people agree with a particular plan) || [[Consensus Rules|Consensus rules]] (the rules that allow nodes to maintain consensus).* ___ 1. When a transaction is made, all [[Node(s)|nodes]] on the network verify that it is valid on the [[Blockchain|blockchain]] and if so, they have a consensus. 2. The consensus algorithm is part of the [[blockchain]] protocol that defines the rules on how consensus is reached on that blockchain. In order to participate, entities on the blockchain must obey and follow the same consensus algorithm. 2. Consensus, as the name suggests, is when all of the participants of a particular network come to an agreement in regards to the system’s overall order and content. 3. In the [[blockchain]] industry, the process by which distinct sections of a [[network]] determine a single truth. Blockchain networks use consensus algorithms to establish agreement regarding which [[Block(s)|blocks]] are to be added to the chain and which nodes are valid. 4. All members of the [[Blockchain]] network are striving for it in order to ensure the information identity at all network sites. 5. When several [[Node(s)|nodes]] (usually most nodes on the network) all have the same [[Block(s)|blocks]] in their locally-validated best [[Blockchain|blockchain]]. 7. A fundamental problem in [[Distributed (network)|distributed computing]] is to achieve overall system reliability in the presence of a number of faulty processes. This often requires processes to agree on some data value that is needed during computation. The consensus problem requires agreement among a number of processes for a single data value. Some of the processes may fail or be unreliable in other ways, so consensus protocols must be fault tolerant. The processes must somehow put forth their candidate values, communicate with one another, and agree on a single consensus value. The [[Bitcoin (blockchain)|bitcoin]] [[Blockchain|blockchain]] uses electricity to ensure the security of the system. It creates an economic system where you can only participate by incurring costs, [[Proof of Work (PoW)]]. You do that for the possibility of [[Block Reward|reward]]/bitcoin. If you spend money, and you play fair by the rules, you get money back. If you cheat, you lose money. It doesn’t pay to cheat. This simple game theoretical equilibrium is the core of the bitcoin consensus algorithm Consensus (Bitcoin’s Process Consensus) Developers suggest bitcoin improvements/modifications, small or big, proposals on Github, Bitcointalk, Reddit, mailing lists, etc. Discussion on this level is critical to enable smooth runtime consensus transitions. Modifications with reference implementations get tested on the [[Testnet|testnet]]. After successful testing developers implement the changes into the Bitcoin software. Who has a say in the consensus process?: (1) Software Developers (do the reference implementations), (2) [[Miner(s)|Miners]] (Runtime consensus for [[Mining|mining]] blocks), (3) Exchanges (They run nodes that validate transactions), (4) [[Wallet|Wallet]] companies (create transactions run on nodes), (5) Merchants (Merchant processing also through nodes). 9. A process, encoded in software, by which computers in a network, called [[Node(s)|nodes]], reach an agreement about a set of data. In the context of blockchains, the consensus algorithm is often used to agree on a [[Block(s)|block]] of [[Transaction(s)|transactions]] that should be appended to the [[Blockchain|blockchain]]. 11. Consensus is achieved when all participants of the network agree on the validity of the transactions, ensuring that the [[Ledger|ledgers]] are exact copies of each other. 13. When a majority of participants of a network agree on the validity of a transaction. 15. An automated mechanism that allows [[Blockchain|blockchain]] participants to agree on which transactions happened and in which order. This agreement is known as a [[Trustless|trustless]] consensus. 17. A process, encoded in software, by which computers in a network, called [[Node(s)|nodes]], reach an agreement about a set of data. 19. Consensus Process is a group of peers responsible for maintaining a [[Distributed Ledger Technology (DLT)|distributed ledger]] use to reach consensus on the ledger’s contents. 21. Consensus algorithms ensure convergence towards a single, [[Immutable|immutable]] version of the [[Ledger|ledger]]. they allow actors on the network to agree on the content recorded on the [[Blockchain|blockchain]], taking into consideration the fact that some actors can be faulty or malicious. this can be achieved by various means depending on the specific needs. The most famous consensus algorithms include [[Proof of Work (PoW)|Proof-of-Work]], [[Proof of Stake (PoS)|Proof-of-Stake]], and [[Proof of Authority (PoA)|Proof-of-Authority]]. 22. A consensus mechanism is an algorithm that participants in a [[blockchain]] network use to reach an agreement on the state of the blockchain ledger, including the order of transactions. Popular consensus algorithms include [[Proof of Work (PoW)]], [[Proof of Stake (PoS)]], and [[Delegated Proof of Stake (DPoS)]]. 23. On a [[decentralized]] [[Peer-to-Peer (P2P)|P2P network]], clashing information will make coming to a complete and total agreement on anything quite difficult. This is particularly true if false information is added into the mix. A consensus algorithm is designed to take a large quantity of information and only allow what matches to be processed. 24. Consensus is an important process in the [[blockchain]] industry that is essential for helping different sections of a [[network]] in determining a single source of truth. Blockchain networks depend on consensus algorithms for reaching an agreement in terms of the blogs eligible for addition to the chain and the validity of [[Node(s)|nodes]].