How do nodes interact with each other on the network and what role do they play in verifying transactions and maintaining consensus among users?

Nodes on the IOTA network interact with each other by forming a directed acyclic graph (DAG) of transactions.

This DAG is called the Tangle and it is used to store and validate transactions. Nodes are responsible for verifying transactions and maintaining consensus among users by validating two randomly chosen previous transactions in order to approve a new transaction. This process is called “tip selection” and it ensures that all transactions are valid and that no double-spending occurs.

In order to verify a transaction, nodes must first validate the two previous transactions, which involves checking that they have not been previously spent, that they are correctly signed, and that they contain valid data. Once these checks have been completed, the node can then approve the new transaction by signing it with its own private key. This process is repeated for every new transaction on the network, ensuring that all transactions are valid and secure.

The consensus mechanism used by IOTA is called “Proof of Work” (PoW). In PoW, nodes must solve a cryptographic puzzle in order to approve a transaction. This puzzle requires computing power which is provided by miners who are rewarded with tokens for their work.

The more computing power a miner has, the more likely they are to solve the puzzle first and receive the reward. By using PoW as its consensus mechanism, IOTA ensures that all nodes on its network agree on which transactions are valid and which ones should be rejected. This helps maintain trust among users as well as preventing double-spending or other malicious activities from occurring on the network.