Homework on Consensus - Questions

Blockchain and Bitcoin 101
#2191

Hi @LTL! :slight_smile: Welcome to the forum! :smiley:

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#2192

1). In a blockchain the agreement of the multiple computers on a particular transaction or activity is considered as a truth. consensus, is when all the computers on the network have an agreement on a subject.

2). A central database has no counter party to check or verify an activity. A decentralized network is filled with counterparts that congregate on a subject to determine it as a go or not.

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#2193

What does it mean when we say that in blockchain, consensus determine the truth?
That the only one truth in the Bitcoin network is determined though a consensus mechanism where participating actors in the Bitcoin network all work together to reach consensus about what the truth actually are. Simply put is that every participating actor in the network get to check the transactions and “vote” if they accept it as valid or not to continue to build on. If a majority of actors then play by the rules and are not corrupt then the network is secured and a consensus are reached quickly with every attempt from a single corrupt actor not being accepted as the truth.

Consensus is driven by economic incentives where the actors that participating in the network all have economic incentives to continue to play by the rules.

How is this different from how truth is determined in a central database?
In a central database the truth is only verified often in one place by one actor. This makes it convenient and fast when only one actor determines the one and only truth but requires every outside actor to trust that central actor. It is impossible for outside actors to verify that the database isn’t corrupt in that it has been changed in a way that isn’t correct. The truth is also very unsecured in that it has a single point of failure, where it is prone to not just corrupt actions inside the central actor but outside attackers against it or mistakes internally that makes the truth corrupt.

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#2194
  1. A transaction can only be added to the blockchain by being verified as possible and logical by the blockchain network. Likewise, alterations to data will not be allowed as they will not make sense to the rest of the network and will therefore be rejected. This removes the ability to lie about the validity of a past transaction or about the the amount of currency one has.
  2. In a centralized database, the totality of the data is stored as one so it is vulnerable to hacking or corruption or just errors. One successful breach or one computational error and the source for all future use of that data is incorrect.
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#2195
  1. Determine the truth because we can verify the data from our supplier in the supply chain or network.
  2. It’s different because we can’t verify the database from our supplier.
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#2196
  1. What does it mean when we say that in blockchain, consensus determines the truth?
    That means that the version of the blockchain which most nodes in the Bitcoin network have stored is the valid one
  2. How is this different from how truth is determined in a central database?
    In a central database, a central authority can edit the transaction history or it can be hacked if the hacker has enough patience and resources to do so. That means that a central database is not trustless, but a blockchain consensus may be trustless if there is no 51% attack. In Bitcoin it is unlikely to have this kind of hack since it will cost too much money to perform such a feat.
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#2197
  1. When everyone has a record of something and can validate on their own by looking at the ledger, they will reach consensus about whether a new transaction/claim is valid or not.
  2. In a central database there is no way for each individual to independently verify a fact/transaction, they would need to rely on truthfulness of the records and basically trust the central database. In blockchain, one is able to verify facts/statements/transactions on his own and hence no need to trust anyone else.
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#2198
  1. Consensuses determines the truth in blockchain because it has been incentivised to be trustless, it runs on verification and not trust. All the blocks agree to do the same thing.

2.The incentive is in a decentralized blockchain. Truth is only determined by verification and not trust.

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#2199

  1. By using a distributed Ledger to confirm transactions anything that isn’t truthful will be rejected by the computers that make up the decentralized ledger. This creates a trestles system

  2. A centralized system can be manipulated by the central party and truth cannot be confirmed as there are no legitimate checks on it. Consensus create truth in a trustless way. Additionally, incentives creates participation by consensus as they are paid to verify the validity of transactions.

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#2200

  1. Consensus determines truth in the blockchain because without consensus no transactions or transfers will ever be approved. And since consensus is encouraged by financial award it further guarantees the validity and trustless nature of blockchain.

  2. A centralized database is a singular entity which creates the very real possibility of fraud or error. Blockchain on the otherhand is decentralized, public, and verified through numerous machines before reaching a consensus. Incentivized consensus inherent to Blockchain creates a system that awards truth through financial gain therefor guaranteeing reliable and trustworthy results.

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#2201
  1. Consensus determines the truth in blockchain because everyone is incentivized to be honest, and everyone must agree for something to be added to the blockchain.
  2. Whoever controls the database determines truth in a central database.
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#2202

1.- A network chain verifies that the block added followed by the rules is the truth.
2.- In a central database it can be manipulated and the truth is compromised.

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#2203

  • What does it mean when we say that in blockchain, consensus determine the truth?
    Every transaction is verified by multiple parties.

  • How is this different from how truth is determined in a central database?
    It is decentralised (multiple entities instead of one) and does not require trust in the person who entered the data, because it can be independently verified. People are incentivised to tell the truth and penalised for not telling the truth.

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#2204

  1. The network needs to agree on what they need to add next. It needs to be trust-less.
    The nodes communicate between them to verify the authenticity of what another node claims to be true.
    If you play by the rules you get a reward whereas if you are dishonest you will be punished by the network.

  2. In a central database, the central authority makes all the rules and decides what is true or not. It can easily be manipulated because no one else can check the authenticity of their claim. Which is very sad!

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#2205

  1. With consensus there are several parties involved in making decisions within the blockchain. This creates a trustless environment where verification takes precedence over trust.

  2. In a central database the truth is determined by whoever is in charge, may that be an owner or an authority. This can lead to manipulation of the data.

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#2206
  1. What does it mean when we say that in blockchain, consensus determine the truth?
    Consensus is a mechanism to define truth/validation among participants in a blockchain data infrastructure. For the consensus in bitcoin, mining and hash power validates bitcoin transactions and the longest chain dictates the truth because it concentrates with the most hash power. The mining mechanism incentivize people to mine honestly and have the same copy of the bitcoin blockchain instead of making fraudulent transactions.
  2. How is this different from how truth is determined in a central database?
    Central database does not need a consensus because there is no punishment for lying or data manipulation.
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#2207

@marsrvr nice answer and cool graphics. May I know what software you used to do this?

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#2208
  1. Consensus is the agreement of all the nodes that transcation is true or false
  2. Single individual or Company choose what the truth is. Difficult or impossible to independatly audit.
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#2209

  1. To confirm each transaction, nodes work together by agreeing collectively whether the transaction is true or not.

  2. A normal database is centralized and can be manipulated at every step of the process, therefore requiring trust (and frequent inspections) where blockchain, with its transparent network eliminates trust from the equation.

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#2210
    • Truth is determined by consensus because there are various parties that check blockchain transactions and agree they are correct. All transactions are verifiable and can be checked at any time in the blockchain, and so there are no chance to cheat.
    • Truth in a centralised database can be altered as there is no verification beyond the party that creates its database, thus can be manipulated
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