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What Does Consensus Mean in Blockchain?

BitForex Editor
Sep 29, 2020

Blockchain has been able to remain sustainable and functional since its creation in 2008. Despite its disruptive tendencies and use in major systems of the world, it has a big problem –Consensus.

Consensus has and is still a fundamental problem of public distributed ledger systems and has been even before Satoshi birthed Blockchain and bitcoin. While there have also been several, consensus protocols designed under various assumptions, none have adequately tackled the problem. Reaching an agreement on the block is difficult as most protocols work for a block, but cannot transcend the chain.

Blockchain is the primary technology that bitcoin relies upon. It is how a series of network computers or systems organize and verify transactions made on a distributed ledger system. Now, Blockchain has garnered attention over the year because of its transparency, stability, security, value appreciation, non-modifiability, and decentralization. For the block to remain in sync with the next on the chain, it requires some form of consensus with the structural framework to help maintain its efficiency and safety. However, with so many consensuses algorithm protocols designed which one will keep the performance in top shape.

Although Blockchain is used in many areas, its most common use is bitcoin – the cryptocurrency. As a distributed ledger, consensus ensures that the peer to peer nodes on the network is working properly. The biggest problem that can affect the consensus of the Blockchain is the Byzantine Generals. This means that if more 51% of the Blockchain is attacked simultaneously; then Blockchain loses its reliability and security. The 51% attack is that person with up to this number of stake on the Blockchain can decide to be malicious and scatter the existing framework if things do not go their way.

To combat the 51% attack, Blockchain has come up with numerous consensus protocols to ensure that no one has a 51% stake on the block at any particular time. One consensus algorithm cannot efficiently handle the problem of the Byzantine Generals as each has its strength and weakness. The consensus algorithm is based on the activities carried out on the Blockchain at that moment. What we are trying to say is, if Proof of Work works in a particular block, it may not necessarily be as efficient.

Furthermore, the cost of securing up to 51% of the Blockchain stake is so expensive that without a consensus in place, the chain remains yet unreliable.

Byzantine Generals' Problem

To solve the issue of the BZ, Paul Baran in his paper titled “On Distributed Communication Network” proposed cryptographic signatures. This was a way of ordering and authenticating users when data and files are added, amended, or updated on the Blockchain. The protocol worked well until 20 years later when three researchers Leslie Lamport, Robert Shostak, and Pease Marshall came into the picture. They used thought theory to analyze the Byzantine Generals and its attack strategy to the block (or city). The report published in the Microsoft Research journal claimed that there will always be an attack on the Blockchain. However, the only way for it to remain efficient is to agree on a battle plan that will maintain the system regardless of the traitors. It claimed that the strategy was to develop a consensus mechanism that will allow the Blockchain to work as a unified system, regardless of the continuous harmful effect on the structural framework.

So what was the solution?

The Practical Byzantine Fault Tolerance Algorithm

This was the first solution after the trio of scholars presented their analysis to the world. The PBFT was designed in 1999 by Miguel Castro and Barbara Liskov. With this consensus protocol, millions of peer to peer messages could be processed on the Blockchain with minimal impact on the block. This algorithm allows for private development of consensus mechanism but also becomes the basis for the several consensuses that followed afterward.

Proof of Work - PoW

This was the first consensus algorithm developed off the practical byzantine fault tolerance. It functions by enabling users to run repeated algorithm protocols to validate the authenticity of other participants on the network. Proof of Work remains the most successful consensus to date and most used on the Blockchain. Despite a central control system, Proof of Work can maintain control of at least half of the Byzantine Generals to ensure a smooth-running system node to node.

Proof of Stake - PoS

This was developed in 2012 and like the police on the Blockchain. The Proof of Stake mechanism melted down consequences on nodes that refuse to follow existing consensus. In this case, users pre-define the outcome of a consensus by placing bets with bitcoins on a node.

If the results tally with the consensus, they win. If it does not win, the rebellious general (node) losses the asset as punishment for disobedience

Delegated Proof of Stake

Now each general’s camp is represented by a node. In DPOS, every single soldier can be a general and take control, but there is a consensus voting (a democracy). In this process, the armies in the camp choose a delegate that will help in creating and running the node.

This reduces power and computational consumption and ensures flow in the system. So if any delegate fails to create a block during its reign, it is booted out and replaced with a competent one.

Conclusion

Overall, there are potentials for having a distributed decentralized ledger system like the Blockchain technology for broader use in the economy. However, without a consensus protocol in place, there is will node disagreement on value, and the system will be another unreliable network. To cap it all, with a consensus mechanism, Blockchain cannot offer a guarantee of stable and transparent operation.

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