L2 Exchange | briefing of consensus mechanisms are protocols

In brief, consensus mechanisms are protocols, that is sets of rules in the blockchain, that make it possible for all the nodes to agree on validity of transactions.💡 Let's explore some of the consensus mechanisms set in blockchains. Proof of Work (POW) is a consensus mechanism deployed in the first ever blockchain - Bitcoin. This protocol uses computational power to validate transactions and produce new blocks to the chain.🔋

The creators of blocks are called miners. They have to compete with each other to confirm transactions and receive certain fees for creating blocks.🎛 Ten years ago, when Bitcoin just came about, the transactions required little computational power, so a simple central processing unit on a computer could easily mine blocks. However, today miners use Application-Specific Integrated Circuit, designed specifically to mine cryptocurrency or engage in mining pools or cloud mining.🏪