Consensus Mechanism

• Reliable, robust, efficient and secure

consensus mechanism

• Create fairness and equality in the

Blockchain network

• Validate and verify the data being

appended to the Blockchain is valid
 Types of Consensus Mechanism

Proof of Proof of
Work (POW) Stake (POS)
Proof of Work (POW)
1990s

Used by crypto projects

like Bitcoin & Ethereum

Uses computational power to solve

complex mathematical problems

Create new virtual coins

 Proof of Work & mining in Bitcoin Blockchain

Mempool - Transactions Average time for solving

1 bundled in a memory pool the puzzle is 10 minutes 5

Mining – Verification of transaction Puzzle gets revised

2 done by participating nodes after every 14 days. 6

Asymmetric Puzzles - Difficult to The first person who solves the

3 solve but very easy to verify puzzle is rewarded with newly minted 7
Bitcoins & network transaction fees

More computational power - better

The verified transactions
4 chances to solve the puzzle
form a block 8
Challenges with Proof of Work

Wastage of computing power

& electricity
Proof of Stake (POS)

• Bock validator is selected by a

randomized system

• Block creator is decided by the:

• Amount of cryptocurrency with a user
• Duration of the holding
Proof of Stake (POS)

• Directly proportional to the user’s holding

of the cryptocurrency

• In POS, Blocks are forged/minted

• Block creators are known as forgers

Forgers need to keep some of
their money at stake
Forgers need to keep some of
their money at stake
Forgers need to keep some of
their money at stake
• In POS, cryptocurrency units are created
initially at the time of launch

• Block validators are rewarded with the

transaction fees for creating new blocks