Nakamoto Consensus refers to the method used in blockchain networks, such as Bitcoin, to achieve consensus on the state of the ledger. It is named after the pseudonymous creator of Bitcoin, Satoshi Nakamoto.
In Nakamoto Consensus, network participants, or nodes, compete to solve complex mathematical puzzles in a process known as mining. The first node to solve the puzzle and add a new block of transactions to the blockchain is rewarded with newly minted cryptocurrency and transaction fees.
This process ensures that all nodes agree on the order of transactions and the validity of the ledger without the need for a central authority. By making it economically unfeasible for any single entity to control the majority of the network’s mining power, Nakamoto Consensus helps to prevent double-spending and other fraudulent activities.
Overall, Nakamoto Consensus is a decentralized and trustless way to maintain the integrity of a blockchain network through a system of incentives and competition among nodes.
