A blockchain consensus mechanism is a process that ensures all participants in a network agree on the current state of the blockchain. This is crucial because blockchains operate in a decentralized manner, where no single entity controls the entire network. Different consensus mechanisms have been developed to validate transactions and maintain security.

Two of the most popular are Proof of Work (PoW) and Proof of Stake (PoS). In PoW, participants, called miners, solve complex mathematical problems to validate transactions and create new blocks. This requires significant computational power and energy. In PoS, validators are chosen to create new blocks based on the number of coins they hold and are willing to “stake” as collateral.

This method is often seen as more energy-efficient. Both mechanisms aim to prevent fraud and attacks, ensuring that all validated transactions are accurate and secure. By establishing a consensus, trust is maintained among participants, allowing decentralized systems to function effectively without a central authority.