Homework on Consensus - Questions

Blockchain and Bitcoin 101
#2934
  1. What does it mean when we say that in blockchain, consensus determine the truth?

That everybody in the network agrees. The parties on the network are financially insentivized to tell the truth so everyone is more than likely to agree on the truth.

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

What the central party says is the truth, is the truth. But with no neutral party to verify it and the fact that the central party could benefit more from a lie… nobody outside of the central party knows what’s true or not for certain.

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#2935

  1. This means that the consensus is reached through incentives. It is in the interest of the network validators to determine whether the new data is valid or not.

  2. A central database can be manipulated, as only one person decides what to do with the new data. Only a decentralized network provides trustlessness.

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#2936
  1. What does it mean when we say that in blockchain, consensus determine the truth?

As everyone in the network is financially incentivized when telling the truth, it is in the interest of everyone to tell the truth. Like this the network is finding a consensus which leads to the truth.

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

Everyone trusts each other on the information they receive, however, it is not clear if you can trust the information or not.

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#2937
  1. Because the nodes must come to a consensus in order for a transaction to be accepted on the blockchain…this creates trustlessness.
  2. A central database or central person in control can be compromised and thus cause the data to be as well.
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#2938

  1. a group determines the truth

  2. In a central database, one can determine the truth

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#2939
  • What does it mean when we say that in blockchain, consensus determine the truth?
    Consensus makes impossible to fake a statement where everyone in the network needs
    to be agreed. Always majority of members will tell the real fact since they are incentivised for it.
  • How is this different from how truth is determined in a central database?
    A central entity determines the truth on a central database , which makes impossible that
    others could verify this and have the real fact. So others will have to TRUST this central
    entity.
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#2940
  1. To say that consensus determines the truth, is just to say that if enough nodes agree that a transaction has been sent and that the transaction is possible, if one node disagrees with all the others then it’s work will get rejected. This is trustless as the nodes are given an economic incentive and as a group have no agenda and cannot be manipulated. Or at least it is more difficult to manipulate the higher the hashrate.
  2. In a centralised database the information can be changed by anyone who has access to it.
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#2941

  1. A certain number of decentralised computers need to be in agreement in order to approve the transaction.

  2. In a central database one person can control the database and therefore create a breach in the system’s security.

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#2942

The truth in blockchain is established by the consensus of all participants in the network. Only if there is agreement that the sender has coverage for the transaction will a new transaction be logged.

A central database is controlled by a single entity, be it a person or an organization. Therefore this single entity also controls whats stored in the database. Changes can be made without the approval from others.

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#2943
  1. When we say in blockchain the consensus determines the truth, that essentially means everybody(the computers) has to be in agreement about the information at hand in order for it to be true. Therefore through consensus, information is now verifiable and traceable.
  2. This is different from a central database because these centralized databases do not communicate with each other like they do in the blockchain. So there is no way to tell if the information they are provided is true or false, we assume it is the truth through trust. While with consensus, there is no trust, it is trustless.
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#2944

  1. What does it mean when we say that in blockchain, consensus determine the truth?
    Everyone has access to verify the information is correct and have incentive to tell the truth

  2. How is this different from how truth is determined in a central database?
    Not everyone has access to the information and there be financial incentive to cheat

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#2945
  1. Before something appears in the Blockchain it comes to an agreement by the consensus on the public ledger. There is no central authority saying it’s the truth.
  2. In a central database a single party can decide the truth for example with ingredients in food.
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#2946

Homework on Consensus - Questions

  1. What does it mean when we say that in blockchain, consensus determine the truth?
    It means that all (at least the majority of) participants in the decentralized network have agree that the data to be added is the true.

  2. How is this different from how truth is determined in a central database?
    It is different because in a decentralized network there is no central authority that claims to be truthful.

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#2947

#1. The consensus (in agreement) is achieved via participants (nodes) looking at a new transaction and then comparing it to the blocks already recorded. This is a method to validate whether this transaction is possible (true) or not possible (false) Example: if I create a transaction and I claim that I have 10 bitcoin and I want to pay or send these bitcoin to Ivan Tech. Then network nodes will look at this new transaction and then look into previous blocks. The nodes would find that I have never accumulated 10 bitcoin therefore the new transaction would be (false) this transaction would be ignored as not true and Ivan Tech would not receive the value of 10 bitcoin. This transaction would be ignored and not written into a new block. If however, I had accumulated 10 bitcoin the nodes would agree that this transaction was true and the new transaction would be written into the next block and it would be recorded that Ivan Tech received a value of 10 bitcoin from me.

#2. A central database is generally controlled by one entity. This entity has the ability to manipulate the database to show what ever value is desired. It is extremely easy to lie through a database when you are the one controlling it. Transactions, amounts and dates can all be changed and manipulated at any time.

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#2948

  • What does it mean when we say that in blockchain, consensus determine the truth?
    consensus is an agreement of the whole network, the decision is collective, there is only one truth

  • How is this different from how truth is determined in a central database?
    a central database is maintained by one authority which can be trusted or not; limited access from outside; the truth can be manipulated

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#2949

  1. What does it mean when we say that in blockchain, consensus determines the truth?
    When the network reaches consensus it means that the majority of the network has validated an entry in the ledger as truth.

  2. How is this different from how truth is determined in a central database?
    On a central database, the controlling party can determine anything they want as truth.

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#2950

For a bitcoin transactions or a block, it all has to follow the certain set of consensus rules. If 1 node breaks the rules, the node will get punished and will be rejected from the network for a while.

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#2951
  1. Consensus is determined when nodes connected to the network verify that the information is accurate. Once confirmed this information is added to the blockchain. The nodes are incentivized to tell the truth by following the rules of the network so that no false information can be added. This creates a trustless environment where information is verified as accurate rather than being trusted to be accurate.
  2. Centralized databases can be manipulated by a single entity that has control over being able to change the information held within the database without verification.
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#2952

  1. What does it mean when we say that in blockchain, consensus determine the truth?
    Whatever 51% of all participants (nodes) in this Blockchain defines as consensus, is the truth!

  2. How is this different from how truth is determined in a central database?
    At a central database is no consensus needed, since determination and decision-making power is centralized. The owner makes the truth.

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#2953
  1. What does it mean when we say that in blockchain, consensus determines the truth?

On the blockchain a consensus needs to be reached so a transaction can be approved and processed. Because a consensus needs to be agreed by a network of decentralised node operators that are incentivised to tell the truth we can ensure that truth will prevail in a trustless way.

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

In a centralised database truth is determined by a few. With so few parties controlling the truth we can not trust they are not misleading the truth due to bias, mistake or corruption.

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