What is a consensus protocol?
Consensus protocols are the rules by which a network operates. In the case of a blockchain network, the consensus protocol provides the rules by which a transaction on the network is verified as legitimate or fraudulent.
As the nature of blockchain technology is to provide a decentralised network with no central governing authority dictating what is real or fake like you see in traditional banks, anyone could submit information to be stored onto a blockchain so it is important that there is a consensus protocol in place to fulfill that role, verify this information and keep the network safe.
Consensus protocols come in many different forms. For Bitcoin, the consensus protocol is known as Proof of Work (PoW), the block mining process that confirms each transaction and protects against double spending. Other types of protocols include Proof of Stake, Proof of Activity, Proof of Elapsed Time and Proof of History.
Protocols or Algorithms – what’s the difference?
You may have come across articles referring to both consensus protocols and algorithms interchangeably.
A protocol is a set of rules that determine how a system or in our case, the blockchain network, functions. Look at the algorithm as a digital foreman who tells the system what to do. The protocol sets out the rules, the algorithm enforces them.