How is Proof of Work a consensus algorithm?
I keep seeing reference to consensus algorithms, but isn't proof of work just a miner solving a mathematical equation? What verifies that the transactions that are added to his/her block are valid? How would another miner know that although a fellow miner won the race to create a block, that the information in it is valid? How did the transactions get to the miner in the first place? Can invalid transactions (wherever they come from and wherever they are found) exist? Thank you for an explanation.
Dear Marc, Transactions are actually checked by nodes, before being added to the transaction pool. From there transactions get grouped and settled within a block by miners. I would say that nodes validate transactions, but miners confirm them by adding them to blocks and broadcast the block to the rest of the network, thus reaching consensus. By the way, all miners are automatically full nodes if I remember correctly. Hope this helps.
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