Consensus Algorithm

Consensus Algorithm

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general agreement.

“a consensus of opinion among judges”

synonyms:   agreement, harmony, concurrence, accord, unity, unanimity, solidarity;




noun: algorithm; plural noun: algorithms

a process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.

“a basic algorithm for division”


Consensus Algorithm is a process used to achieve an agreement on a single data of a distributed process or system. This is important to decentralized systems, it brings reliability to all the unreliable nodes.

Here are two examples of consensus algorithms used in cryptocurrency.

Proof of Work (POW): is an algorithm used to ensure secure transactions to a trustless network, by the works of a miner’s computer who use a software capable of solving algorithm problems. Miners choose transactions according to high or low prices and put them into blocks and are rewarded for doing that. The level of verification done by these miners guarantees legitimacy, so there can be no fake-consensus due to the number of nodes that are a part of this consensus. Changing information in every node would be basically impossible, because it would require at least 51% of nodes to confirm its fake-transaction to be able to make it through.


Proof of Stake (POS): is another algorithm also used to validate the legitimacy of a transaction based on a distributed consensus. But in this case, there are no miners and no blocks reward for their mathematical-solving-problems, as there would be in POS.  In POS a creator of a new block is chosen by their wealth or stake. Which means whichever miner or validator as they like to call here, has more cryptos the more mining power they will have. Validators places bets on transactions they collect and once approved (validated by all nodes involved) they get rewarded according to their bets.


Blockchain depends on consensus algorithm like POW and POS.

Without consensus algorithms blockchain becomes nothing, a dangerous mess. So, whenever a miner picks up a transaction he must acquire a response or an approval from nodes in his network upon the specific transaction, which will confirm whether or not the transaction is valid. Transactions in the blockchain carry a hash distributed to acquire a consensus algorithm that will determine the legitimacy of each transaction.

In case of fraudulent alterations, there has to be an assurance that at least 51% will record and respond to these alterations, which is basically impossible and this is what validates this distributed consensus process, making it more secure and reliable.


“In order for a 51% attack to be successful in a Proof-of-Work system, the attacker must keep their alternative chain secret. Once they have locked in the profits from their first spend, they can broadcast the longer secret block chain which will invalidate the original transaction. Keeping solved blocks secret is also used in the selfish-mining attack which can be effective with much less than 51% of the hashing power.

In order to prevent this kind of behavior we must make it impractical for miners to maintain secret block chains. If every transaction that is broadcast contains the hash of a recent block and the block chain enforces the rule that the transaction can only be included in block chains that build off of that block then no one will be able to build secret block chains that leverage the coin-days-destroyed of transactions in the public chain.” —

Winco’s Token is upon an Ethereum platform which used to use POW algorithm, but has recently changed to POS. Check out our blog on “Ethereum’s Platform Update



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