How does consensus work in a cryptocurrency network?

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Consensus in a cryptocurrency network is a mechanism that allows participants in the network to agree on a single version of the blockchain. In order for transactions to be confirmed and added to the blockchain, all nodes must reach an agreement on the validity of the new data. The most popular consensus algorithms include Proof of Work (PoW), Proof of Stake (PoS), and their variations. PoW requires computational efforts to confirm transactions, while PoS is based on the amount of cryptocurrency locked by users. Consensus protects the network from attacks and ensures its decentralized operation.

This material was prepared by Khachatur Davtyan, developed and translated by artificial intelligence.