Homework on Consensus - Questions

Blockchain and Bitcoin 101
#5386
  1. What does it mean when we say that in blockchain, consensus determine the truth?

After a transaction in a blockchain network the network of computers have to verify if the transaction is valid or invalid considering various factors like does the payee has sufficient balance for the transaction or not, if the payee is double spending or not, and so on. Consensus is achieved after majority of the computers agree on a particular thing hence it also determines the truth as it is verified by the network of computers.

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

In case of a central database all the power is with the central authority, the entity itself can add, remove and manipulate the data and a lot of trust is involved on how the truth is determined.

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#5387

4.Through the consensus mechanism truth is incentivised and dishonesty is penalised with the help of multiple participants validating the transaction.
5. A centralised system relies on a central authority to determine the truth

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#5388

1. What does it mean when we say that in blockchain, consensus determine the truth?
For a blockchain, a record will require agreement in the network to be added to the ledger.

2. How is this different from how truth is determined in a central database?
A traditional database usually does not require consensus from multiple stakeholders and is added to the database upon a transaction.

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#5389
  1. Enough nodes will confirm, so any bad actors will have to overcome the entire network in order to commit fraud.
  2. In a central database, the owner can make changes and everyone has to trust the owner.
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#5390

  1. Nodes verifying transactions. Accept good and ignore false.

  2. Consensus is determined by the blockchain with no third parties engage.

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#5391
  1. What does it mean when we say that in blockchain, consensus determine the truth?

Consensus determines whether the transaction is added onto blockchain and this is achieved by network of computers running nodes of a use case, for example Bitcoin. In currencies this works - one BTC transaction is one BTC transaction. However, we might need oracles to verify that the data being added is correct. In the the video example a hay company and farm might be using blockchain, but they could be in a scheme together and claim that the “hay is the best of quality”. However, adding more nodes to verify the quality of the hay before it’s logged on blockchain would quickly reveal the scheme.

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

In central database the data can be tampered with, by owner or unlawful actors. This means that even though the hay going to the farm for cows to eat would actually be best of quality, a record of this in the supply chain could say “bad hay”.

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#5392

Consensus means to determine the true agreement in a decentralised blockchain.

Truth in a centralised database can be corrupted.

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#5393
  1. Consensus determines the truth because the network relies on validators to confirm or deny transactions. The validators are financially incentivized to find and act upon the truth, preventing fraud.
  2. In a centralized database there is no open network of validators and no way of knowing if the system is corrupt and being manipulated from the inside.
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#5394

  1. What does it mean when we say that in blockchain, consensus determines the truth?
    It means several parties have arrived to a common decision, removing the need for blind trust in the system, since a network of computers has verified that the transaction is truthful and not fraudulent. This is what achieves decentralization. For consensus to work, there has to be an economic incentive to play by the rules and to be honest.

  2. How is this different from how truth is determined in a central database?
    In a central database one principal authority has control over the network and the decision power, thereby allowing it to modify the data as it wishes.

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#5395
  1. What does it mean when we say that in blockchain, consensus determines the truth?
    consensus, validates new data added to the blockchain as the truth.
  2. How is this different from how truth is determined in a central database?
    central databases are designed by one firm that decides what the truth is. If their truth differs from the actual truth, then you don’t have much of a truth anymore. consensus in the blockchain is decentralized, removing trust and requiring validation for incentives.
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#5396

  • What does it mean when we say that in blockchain, consensus determine the truth? Trust is removed and is replaced with verifying, which determines the truth.

  • How is this different from how truth is determined in a central database? A central database is controlled by one or a few entities that have the ability to delete/edit/add information as they see fit.

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#5397
  • Because the vast majority of the network wants to play by the rules, and any transaction that has a wrong motive and tries to cheat the system will be rejected by the other participants, Participants in blockchain transactions (i.e. miners with proof-of-work) are incentivized to “tell the truth” and bring a correct transaction to the blockchain, because by doing so they will make money, and most people want to make money, and if they don’t play by the rules they won’t, and they will even lose money (for instance electricity costs with proof-of-work).
  • In a central database, truth would be determined by a central authority, by the top, although in blockchain it is determined by consensus, where the different nodes of the network need to agree whether a transaction is valid or not.
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#5398
  1. What does it mean when we say that in blockchain, consensus determines the truth?
    Consensus is a mechanism to proof the right transaction on the ledger when all the computers agree with the result. When the result is right then it is written in the blockchain and it can’t be changed. If all the computers agrees with the result then it is the truth. If not then the transaction is rejected by the network.
  2. How is this different from how truth is determined in a central database?
    One truth by one subject without the chance to verifying it by other subjects in the network. Easy to manipulate.
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#5399

  1. It means that only when there’s a consensus in the network about a transaction, we can know it is true / we can trust it. Consensus is the means to achieve trust / verification.

  2. In a central database, the central authority determines truth and may be dishonest, but in the bitcoin network the structure incentivizes honest conduct and therefore consensus acts as verification.

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#5400

Questions:
. This means that people involved in the network decide on whether a transaction is valid. Consensus also exists as people have an incentive to follow the rules so that they can make money through transactions.
. There is no central authority in Blockchain to verify transactions so it is a group of people with no full control over the network, who decide on transactions in the database.

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#5401

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

Becouse consensus it represents the honesty of a network achieved by incentives.Every part of the network is paid to be honest.

2 How is this different from how truth is determined in a central database?
In a central data base the truth can’t be verified.

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#5402
  1. all these ledgers can track if the new information is valid by confirming it from a source.
  2. the central database is harder to verify because the information is probably harder to trace.
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#5403

  1. In a decentralized system that no one controls, agreeing to updates is achieved through a mechanism called Proof of Work, in order to make all participants agree on what is the truth about the current state of the blockchain

  2. In a central database that a central authority owns a consensus mechanism is actually not needed, because what the central authority decide is the truth, that will be the truth. Its more efficient, but all other participants has to trust the central authority

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#5404
  1. What does it mean when we say that in blockchain, consensus determine the truth? Whatever the majority of network agrees is true gets into the blockchain (so, it’s being confirmed as truth). The rest is being rejected.
  2. How is this different from how truth is determined in a central database? The owner/manager of the centralized db can decide what’s true and what’s not.
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#5405

  1. In a blockchain truth is determined via unanimous agreement (consensus) by all the verifying parties involved in the blockchain.

  2. In a central database truth is suspect - one has to rely on faith that the data is truthful. In a blockchain one can assume that the data is trustworthy because whatever data is in the blockchain has been vetted via consensus by the verifying parties.

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