A consensus algorithm is a mechanism that enables computers in a blockchain network to agree on the validity of transactions without needing to trust each other.
A consensus algorithm defines how participants in a network propose, validate, and confirm new transactions. The specific rules vary by mechanism, but the general process follows a similar pattern across most implementations.
Participants (called miners, validators, or nodes depending on the system) broadcast transactions to the network. The algorithm determines which participant gets to propose the next batch of transactions, how other participants verify that proposal, and what happens if someone submits an invalid or conflicting transaction.
The algorithm typically requires a majority of participants to agree before a transaction is considered final. This makes it difficult for any single party to rewrite the ledger, since they would need to control a large portion of the network to do so.
In PoS, participants called validators take turns proposing blocks based on the amount of cryptocurrency they have locked up as a stake. Validators are incentivized to act honestly because dishonest behavior can result in losing their staked funds. PoS generally requires less energy than PoW and is used by several major smart contract platforms.
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