Consensus Mechanisms

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We know blockchains generate coins in a secure way. But, have you ever wonder how they do this? How the different blockchains generates coins, whilst keeping the security and the validity of the system? To answer this questions, we need to learn about consensus mechanisms.


This may sound too technical, or too vague… here we’ve made a succinct compilation of the most important things to know, all of it extracted from Ethereum official documentation.


We have choosen Ethereum because their documentation is backed by a large community, which makes sure it’s accurate, and because its characteristics can be applied to many other cryptocurrencies.

Consensus mechanisms are -like its name indicates- ways of reach agreements. The agreements are the blockchain way of ‘govern’ itself.


Consensus is the mechanism/protocol/algorithm to reach agreement between the network of computers running Ethereum, on the current state of the system. These computers -the so-called nodes- are in different locations around the world, have different brands, different specifications, and many other differences.



Consensus mechanisms are not a cryptocurrency invention, they already existed in other areas (e.g., databases, servers running applications, enterprises operating across countries) However, because cryptocurrency unique challenges, they have pushed for new levels of refinement. A very important feature of the consensus applied to crypto is the protection against an attack to the blockchain, from a group that controls the 51% of the network of computers (known as “51% attack”)



Main types of consensus mechanisms


Proof of Work (PoW)


  • PoW and thus the creation of blocks (new coins) is done by the miners (check our previous post on mining). They keep safe the cryptographic link between the blocks in the blockchain.

  • If a group controls 51% of the network resources, it has the power to cheat the blockchain. This is highly unlikely but possible.


Proof of Stake (PoS)


  • PoS is carried out by validators. Validators are chosen at random to create new blocks. The only requirement to be chosen is to have staked ETH.

  • You would need 51% of the total amount of ETH to cheat the blockchain.

  • Your staked ETH is taken from you if you behave maliciously as validator.



We know consensus mechanisms is a complex and sometimes difficult to understand subject. We hope you have enjoyed this first approach and you don't miss our upcoming posts, where we go deeper into it.



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