CONSENSUS in blockchain is known as Agreement. This is achieved when at least 51% of the nodes on the blockchain reaches an agreement on a certain truth before execution.
PROOF OF WORK CONSENSUS MECHANISM
This is the first method of achieving consensus adopted by bitcoin in a blockchain network, it is dependent on miners.
Miners are set of individuals responsible for maintaining the network by running of nodes.
The whole idea of proof of work relies on the competition between miners by solving mathematical puzzles. The first miner to solve the problem adds a block of transaction to the blockchain, thereby obtaining rewards.
To participate in consensus i.e. creation and verification of blocks is dependent on the computational power and quantity of your nodes which in turn causes large energy consumption, thereby making the network more “centralized” i.e. only those with the most sophisticated equipment’s can participate in consensus.
PROOF OF STAKE CONSENSUS MECHANISM
Is another method of achieving consensus, adopted by algorand blockchain it is dependent on Validators.
Validators are individuals responsible for maintaining the network and verifying transactions by running of nodes.
The idea behind proof of stake is to allow a crypto currency holders to stake coins and run a validator node i.e. The bigger your stake the better your chances of verifying the next block.
If a validator wants to participate in consensus, he or she has to stake the native token, thereby making the network more decentralized i.e. any body can be chosen to verify a block. Here there’s no need to create mining farms and spend so much on electricity.