Mining and consensus mechanisms from "summary" of The Basics of Bitcoins and Blockchains by Antony Lewis
Mining is the process by which transactions are confirmed and added to the public ledger known as the blockchain. Miners compete to solve a complex mathematical problem, and the first one to solve it can add a new block of transactions to the blockchain. This process requires a lot of computational power and energy, as miners need to make numerous calculations in a short amount of time. The incentive for miners to participate in this process is the reward they receive in the form of new bitcoins. In addition to the newly created bitcoins, miners also receive transaction fees for the transactions they include in the block. This reward system is designed to encourage miners to continue securing the network and processing transactions. Consensus mechanisms are protocols that ensure all participants in a blockchain network agree on the validity of transactions and the state of the blockchain. The most common consensus mechanism used in blockchain networks is Proof of Work (PoW). In PoW, miners compete to solve a mathematical puzzle, and the first one to solve it can add a block to the blockchain. Another consensus mechanism is Proof of Stake (PoS), where validators are chosen to create new blocks based on the number of coins they hold. PoS is considered to be more energy-efficient compared to PoW, as it doesn't require miners to solve complex mathematical problems. In addition to PoW and PoS, there are other consensus mechanisms such as Delegated Proof of Stake (DPoS) and Practical Byzantine Fault Tolerance (PBFT). Each consensus mechanism has its own advantages and disadvantages, and the choice of mechanism depends on the specific requirements of the blockchain network.- Mining and consensus mechanisms play a crucial role in maintaining the security and integrity of blockchain networks. By incentivizing miners to participate in the mining process and ensuring consensus among network participants, blockchain networks can operate in a decentralized and secure manner.
