Ouroboros (Proof-of-Stake)
How Cardano utilizes the Ouroboros protocol to achieve secure and energy-efficient consensus.
The Problem of Consensus
Because a blockchain is operated decentralizedly by thousands of computers worldwide, they all must agree on which data block is allowed to be appended to the chains next. Bitcoin solves this through Proof-of-Work (PoW) (computing power), which is secure but enormously energy-intensive. Cardano uses Proof-of-Stake (PoS) instead.
Ouroboros: The Scientific Proof-of-Stake
Cardano's consensus protocol is named Ouroboros (named after the ancient symbol of the snake biting its own tail). It was the very first PoS protocol that could be mathematically proven to guarantee the same level of security as Bitcoin.
With Ouroboros, computing power and graphics cards do not decide who produces blocks, but rather the amount of ADA that a node represents in the network – its "stake". The more stake a validator (Stake Pool) has, the higher the probability that it will be selected by the protocol to write the next block.
The Lottery Mechanism
You can imagine the system like a lottery. Every ADA corresponds to a lottery ticket. The Ouroboros protocol internally conducts a cryptographic draw for every single slot (second) in the network to find a slot leader (block producer). Since this "rolling of the dice" happens decentralized and based on stake, the system is extremely secure against external manipulation.
Energy Efficiency
Since Ouroboros does not require solving pointless complex mathematical puzzles (hashing) like Bitcoin, the entire Cardano network is dramatically more energy-efficient. The Cardano network consumes about as much energy as a small neighborhood of a small town and is countless times more sustainable than Proof-of-Work based networks.