Proof of Work (PoW) vs Proof of Stake (PoS) What is a Consensus Mechanism? A consensus mechanism is how a blockchain network agrees on the state of the ledger — which transactions are valid and in what order — without a central authority. Proof of Work (PoW) How it works: Miners compete to solve complex cryptographic puzzles (hashing) by expending computational power and electricity. The first to solve the puzzle gets to add the next block and receive rewards. Used by: Bitcoin, Ethereum (until its transition to PoS), Litecoin. Pros: Very secure and battle-tested. Strong decentralization since anyone with hardware can mine. Proven resilience against attacks. Cons: Extremely energy-intensive and costly. Slower transaction speeds and lower scalability. Mining often centralized in regions with cheap electricity or by big mining pools. Proof of Stake (PoS) How it works: Validators are chosen to create new blocks based on the number of tokens t...