Homework on Consensus - Questions

Blockchain and Bitcoin 101
#2772

  1. Different nodes on the blockchain must come to an agreement that a transaction is valid.

  2. Truth is determined via a central database based on trust that each party involved is telling the truth. By utilizing blockchain consensus trust can be removed and replaced with irrefutable data from the blockchain.

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#2773

  1. The different nodes in this decentralized network have to agree, the decisions are made together. They are being double-checked by all participants in this network. All participants are incentivized (financially) to tell the truth.

  2. The truth has to be verified by an outsider/auditor. Until verification the content cannot be trusted.

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#2774

  1. the network nodes work in collaboration to decide the truth and are incentivized to do so.

  2. In a central database a central Authority decides the truth therefore it can be corrupt.

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#2775

  1. When you have the agreement of 51% or more of the computers on the network that a transaction is valid you have consensus.

  2. Truth in a central database is achieved by only allowing users with the appropriate credentials is allowed to make changes. IE the employee how is making the change is trusted. Central DB requires trust in people while blockchain moves that trust to a network of computers and enforces it with computer code.

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#2776

  1. Verification. When a network’s nodes achieve consensus, they have verified that a transaction is what it says it is. If something is off, say a person doesn’t have the money to support a transaction, then, by a process of verification, the network will determine that there is this problem and stop the transaction from ever happening.

  2. A bank is centralized. there are tellers, officers, and managers. At each level of this hierarchy, employees are responsible for the amount of help they can provide a customer. A thief who is cognizant of this hierarchy can manipulate it, going to the employee that is a perfect mark for a phony loan or to cash a bad check. In the traditional banking model, truth is relative to the look of the suit you are wearing.

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#2777

  1. Truth is what the network AGREES can be added. Once a transaction has been added it is considered a part of the SHARED truth of the HISTORY of the system. Consensus has spoken.

  2. Truth is Data. Data is Truth. It changes and can be retrieved. This is the Way. That is the central use case of traditional databases. If that invariant holds true, the old-school database is successful. The concept of consensus is foreign to old-school databases.

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#2778
  1. Transactions are verified thru tested, mathematical, computer programs, and all nodes must agree that said transaction is verified before it is posted to the ledger, thus achieving consensus.
  2. An unknown number of transactions can be entered into a data base by an unknown number of people, and anyone of the transactions can be flawed, incorrect, or altered by the data entry individual, which may or may not be caught by an audit done by yet another individual…
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#2779

-it means that all validators/nodes work together to achieve a common decision, and everyone get incentives to tell the truth in form of money

-the difference is that in a centralized database a single person or a group of people make decisions and the truth could be alterated so no one can verify.

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#2780
  1. What does it mean when we say that in blockchain, consensus determine the truth?

Only once there is agreement between nodes on a transaction it is added to the blockchain. People are incentivised to reflect the truth and can only be attained through consensus.

  1. How is this different from how truth is determined in a central database?

A central database can be modified without reaching consensus with other parties. Any entity with the required permissions can modify the truth thus requiring trust to be deemed as the truth. With blockchain trust is not required for the truth to be the truth.

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#2781

1- For a block to be added to the block chain, there must be a consensus between the different computers.
2- Central databases do not use these types of security measures

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#2782

  1. Because it is when several people or parties checks the information in a decentralized transaction between ledgers that is good and trustworthy.

  2. Consensus without provenance would be difficult to cheat, and that’s why consensus incentivizes the legers to transact honestly and transparent.

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#2783
  1. Consensus mechanism is a fault-tolerant mechanism that is used in blockchain for achieving the necessary agreement on a transaction or a single state of the network among distributed ledger.
    Thus, any false transaction or state appears in the network , all distributed ledger or nodes reject and records the true transaction.
  2. In central database any malicious person can change the records for his/her benefit showing the wrong figures such as Financial organisation or banks, supply chain management.
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#2784

  1. What does it mean when we say that in blockchain, consensus determine the truth?
    Because all decisions were double checked on a public blockchain about all the information given are correct.

  2. How is this different from how truth is determined in a central database?
    In a central database the information could be modified, there’s lack of verification, it’s easy to cheat.

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#2785

That the blockhain network uses an algorithm, the consensus, to verify the chain of entries. Therefore it is this procedure that will ‘determie the truth’.

The consensus relies on a network that has to agree. No one node can corrupt the network alone.

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#2786

Q1: What does it mean when we say that in blockchain, consensus determine the truth?

A1: When decisions are made and agreed fully together by all parties involved in the blockchain.

Q2: How is this different from how truth is determined in a central database?

A2: In contrast, in a centralised database/system, decisions can be made dependently by a single entity without agreement, consultation and/or being validated by any other party.

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#2787

  1. What does it mean when we say that in blockchain, consensus determine the truth?
    Answer: the computers that form the network that runs the blockchain will verify information before adding a new transaction/data to the blockchain. They must all agree about the ligitimacy of the information.

  2. How is this different from how truth is determined in a central database?
    Answer: In centralized database if there is any verifications of information prior to inserting the data into the database that happens by the input validations of that single computer/application.
    Also when information is read from a single source (the centralized database) it cannot be cross-checked against other sources. So it can happen that incorrect information is stored in a centralized database and often information will be legitimized by the fact that it is contained there, but does not guarantee that it was correct in the first place when it was added to the central database.

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#2788

  1. Unless someone/group controls enough of the network to provide proof of false information, consensus allows for peace-of-mind that the data in the ledger is in-fact valid, thus making it trustless. Otherwise, we would have to “trust the word” of the entity without there being multiple, independently incentivised actors mathematically validating each transaction before verifying it as valid.

  2. The major difference is the elimination of trust with consensus and replacing it with verifiable mathematical data from independently incentivised and verifiable sources.

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#2789

  1. We can monitor the blockchain to see if the information that is put there seems reasonable. If it looks suspicious and information is put there that we know is not true we can question it and not let it be verified as a transaction. It is only when information is inline with the consensus of the network is put in a transaction that it will be accepted by the validators/ miners.

  2. It is different in a fundamental way. A central database can be altered at will, by one person or a group of people that might or might not be malicious. This can not happen in a blockchain unless you have more then 51% of the hashpower in the network.

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#2790

Homework on Consensus - Questions

  1. What does it mean when we say that in blockchain, consensus determine the truth?
  • Consensus determines the truth means that the chain that can be verified by the most miners is the chain that is followed from that point on.
  1. How is this different from how truth is determined in a central database?
  • The truth in a central database is determined by Trust. Both parties in a transaction need to trust the central database. In blockchain the truth is also incentivized with rewards.
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#2791

  1. Consensus determines the truth through a multi-level verification process. Multiple nodes will validate a certain transaction. This will determine the person or company is, in fact, doing what they claim they are doing.

  2. There is a similar procedure taking place within the central database. Companies use other companies as back up to strengthen whatever claim they are making. The difference between blockchain and central database is that the companies/persons responsible for validating are able to be traced by the public to determine whether or not these are reliable sources. The same would hold true if a person or company disagreed with a claim.

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