The mechanism by which members come to an agreement about the authenticity of a transaction is referred to as the "Consensus Mechanism". Consensus formation ensures the involvement of multiple validators in a systematic and predetermined manner, ensuring decentralization and objectivity of decision making.

It ensures implementation of the key features of the Blockchain platform like increased trust, immutability of the transactions, and maintenance of integrity of the platform. It is the soul of the Blockchain platform and will help members in reaching right decisions at all times. Sanctity of Blockchain applications depends on the strength and reliability of consensus mechanism used by it.

Bitcoin and the earlier version of the public Ethereum client follows "Proofof-Work (POW)" Consensus mechanisms where miners or validators compete with each other and burn valuable resources like computing power and enormous amounts of electricity to guess the right Nonce (number used only once) and create a targeted hash to win the race to create a block. Ethereum platform will soon shift to a "Proof of Stake" (POS) based consensus, which involves negligible energy consumption.

Some new generation public platforms use variations of "POW" and "POS"-based consensus algorithms like PoET (Proof of Elapsed Time) and DPOS (Delegated Proof of Stake) to minimize resource utilization and wastage. Enterprise Blockchains like Hyperledger and others use energy-efficient algorithms like "Proof of Authority" (POA), "Practical Byzantine Fault-Tolerant" (PBFT), "Node to Node" (N2N) and their variations to arrive at a deterministic consensus. Consensus mechanisms aim is to ensure that all participants have identical copies of distributed database files.