Which consensus mechanism is commonly used in blockchain networks?

Proof of Stake is a widely recognized consensus mechanism employed in various blockchain networks. It functions by allowing participants to validate transactions and create new blocks based on the number of coins they hold and are willing to "stake" as collateral. This mechanism contrasts with Proof of Work, which requires significant computational power and energy consumption to solve complex mathematical puzzles.

By utilizing Proof of Stake, blockchain networks can achieve greater scalability and reduce energy consumption, leading to faster transaction processing times and lower environmental impact. Participants are incentivized to act honestly, as they have a financial stake in the system, and dishonest behavior could lead to a loss of their staked assets.

Additional options highlight concepts that do not serve as consensus mechanisms in blockchain environments. Random Selection lacks the structured approach needed for consensus and could lead to unpredictable decisions without accountability. The Conventional Banking System and Purely Centralized Approval are fundamentally different from decentralized blockchain principles, as they rely on centralized entities for transaction validation and trust, contradicting the essence of blockchain technology which aims for transparency and disintermediation.