016. A consensus algorithm:
Is a protocol used to achieve consensus among nodes in a blockchain network. It ensures that all nodes agree on the state of the blockchain, including transactions and blocks. Common consensus algorithms include;
1. Proof of Work (PoW): Nodes compete to solve a mathematical puzzle, requiring significant computational power.
2. Proof of Stake (PoS): Nodes are chosen to validate transactions based on their stake (holdings) in the network.
3. Delegated Proof of Stake (DPoS): Nodes vote for validators, who create new blocks.
4. Byzantine Fault Tolerance (BFT): Nodes agree on the state of the blockchain through a voting process.
5. Leader-Based: A leader node is chosen to create new blocks and manage the network.
6. Federated Consensus: A group of trusted nodes (federators) manage the network and create new blocks.
7. Directed Acyclic Graph (DAG): A consensus algorithm used in some blockchain networks, like $IOTA .
Consensus algorithm characteristics:
1. Security: Resistance to attacks and network manipulation.
2. Scalability: Ability to handle increasing network traffic and transactions.
3. Energy efficiency: Minimizing energy consumption and environmental impact.
4. Decentralization: Maintaining a decentralized network with no single point of control.
5. Fault tolerance: Ability to function even if some nodes fail or behave maliciously.
Thus consensus algorithms are the backbone of blockchain technology, enabling nodes to agree on the state of the network and ensuring the integrity, security, and decentralization of the blockchain. $BTC $ETH
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