Consensus Mechanism
The method by which a decentralized blockchain network reaches agreement on the current state of the ledger and which transactions are valid. Consensus mechanisms solve the problem of coordinating untrusting parties without a central authority. Major types include Proof of Work, Proof of Stake, Delegated Proof of Stake, and Proof of Authority.
“Bitcoin uses Proof of Work consensus where miners expend energy to validate blocks, while Ethereum uses Proof of Stake where validators stake ETH as collateral.”
Proof of Work (PoW)
A consensus mechanism where miners compete to solve computationally difficult cryptographic puzzles (finding a hash below a target difficulty) to validate transactions and create new blocks. The first miner to find a valid solution broadcasts it to the network and earns the block reward. PoW's security comes from the immense cost of computation — attacking the network requires controlling 51%+ of the total hash rate, which is prohibitively expensive for major chains.
Proof of Stake (PoS)
A consensus mechanism where validators are selected to propose and attest to new blocks based on the amount of cryptocurrency they have staked as collateral. PoS replaces energy-intensive computational competition (PoW) with economic stake as the security mechanism — validators risk losing their staked tokens (slashing) if they act maliciously. PoS is significantly more energy-efficient than PoW and is used by Ethereum, Solana, Cardano, and most modern blockchains.
Validator
A network participant in a Proof of Stake blockchain that is responsible for proposing new blocks, attesting to the validity of blocks proposed by others, and maintaining the integrity of the network. Validators must stake a minimum amount of the native token as collateral and run node software continuously. They earn rewards for honest participation and face slashing penalties for misbehavior.
Decentralization
The distribution of control, authority, and data processing across a network of participants rather than concentrating it in a single entity. In blockchain, decentralization means no single party controls the network, making it censorship-resistant and reducing single points of failure.