What is a Consensus Mechanism in Ethereum?
A consensus mechanism is a protocol used within blockchain networks to achieve agreement on a single data value among distributed processes or systems. In Ethereum, the primary consensus mechanism has transitioned from Proof of Work (PoW) to Proof of Stake (PoS) with the Ethereum 2.0 upgrade.
Proof of Work (PoW): Initially, Ethereum utilized PoW, where miners competed to solve complex mathematical puzzles. This process required significant computational power and energy consumption, leading to scalability issues and environmental concerns.
Proof of Stake (PoS): With Ethereum 2.0, PoS was introduced as a more efficient and eco-friendly alternative. In this mechanism, validators are chosen to create new blocks based on the amount of cryptocurrency they hold and are willing to "stake" as collateral. This reduces the competition among miners and enhances transaction speeds while minimizing energy usage.
Overall, the consensus mechanism is crucial in ensuring the integrity, security, and decentralization of the Ethereum network, fostering trust among users and developers while enabling seamless transactions and smart contract deployment.