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What is a consensus mechanism?

September 14, 2021

"Blockchain technologies like Bitcoin and Ethereum are at a base level distributed databases that are hosted by nodes. A consensus mechanism allows the distributed network of nodes to reach an agreement of the current state of the network, work together in sync and stay secure. For Ethereum and Bitcoin, the consensus mechanism is Proof of Work (PoW) where GPU-Miners compete to form new blocks with completed transactions that will be shared with the network and  added to the chain. The winner is the fastest to solve complex math equations and is rewarded the underlying token of the network (i.e. ETH, BTC). 

There are many consensus mechanisms but the two most popular ones are Proof of Work and Proof of Stake."

-Harsharn Singh, Investment Associate @ Ember Fund

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