Are you tired of hearing about all these fancy blockchain terms like “consensus algorithm” and “proof-of-work”?

To kick things off: what is proof-of-work? It’s essentially a puzzle that miners (the people who keep the blockchain running) have to solve before they can add new transactions to the chain. The idea behind this is to prevent bad actors from spamming or manipulating the network by requiring them to put in some effort and resources to do so.

Now, consensus algorithms. This is how all the nodes (computers) on a blockchain agree on which version of the chain is correct. In proof-of-work systems like Bitcoin, each node competes to solve the puzzle first in order to add their transactions to the next block. The first one to do so gets rewarded with some cryptocurrency and the right to continue adding blocks (known as “mining”).

But what happens when two nodes try to add a new block at the same time? This is where consensus comes into play. Each node has its own copy of the chain, but they all have to agree on which version is correct. In proof-of-work systems, this is done by having each node compare their current chain with the one that just got added (known as a “block candidate”). If the new block’s puzzle was solved correctly and it has more total computational power backing it up than any other competing blocks, then it gets added to everyone’s copy of the chain.

Proof-of-work consensus algorithm in a nutshell. It might seem complicated at first, but once you understand the basics, it all starts to make sense. And hey, if you ever need more help or want to learn about other blockchain topics, feel free to reach out!