What Is Nakamoto Consensus Bitcoin


One of Bitcoin’s most unique features is its consensus algorithm, which set the precedent for a Byzantine Fault Tolerant (BFT) peer-to-peer currency system. The most common definition of Bitcoin’s consensus algorithm, more specifically, the definition that most online sources point to, is proof-of-work (PoW), the consensus mechanism that relies on participants solving cryptographic puzzles in order to validate new information. While PoW is a significant part of Bitcoin’s overall consensus model, it does not encompass the entirety of how new blocks are added to the blockchain. Rather, PoW is part of a larger consensus algorithm that is commonly known as “Nakamoto Consensus,” named after the pseudonymous creator of Bitcoin itself. Nakamoto Consensus is what made Bitcoin different from the countless digital currency implementations that came before it, such as DigiCash or b-money. Bitcoin’s unique consensus model allowed it to be the first BFT (Byzantine fault tolerant) system that could scale in an organic way, and thus, set the precedent for subsequent cryptocurrencies that continue to use a variation of Nakamoto Consensus to power their protocols.

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