Homework on Consensus - Questions

Blockchain and Bitcoin 101
#1065

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

All in the network must agree on every transaction if it is true or not based on their own current copy of the blockchain in the public ledger. When a decision is made you know the network all together agree on the transaction, witch makes it decentralised and trustless.

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

In a centralized database there are no incentives to ensure the truth. Also, the truth is controlled by one an authority and this makes it easy to manipulate as they alone determine what is the truth.

#1066

  1. Consensus by definition requires multiple parties to agree for a transaction will be accepted in the blockchain. In this way it is decentralised and helps to build a trustless system. Consensus financially incentivises people to play by the rules and tell the truth as we all want to make money and if you dont follow this principle the network will not accept your transaction or part of the supply chain you may fulfill.

  2. A central authority has the power to determine what will be accepted as truth, they have the ability to manipulate it and make it work in their favour as all they have to do is prove they are an authority on the matter.

#1067
  1. What does it mean when we say that in blockchain, consensus determine the truth?
    There are many instances of the same blockchain and the majority must be in agreement before a new transaction can added. I have yet to determine how majority is determined, looking forward to finding out more in the next lesson. I’m guessing it has to do with the phrases “proof of work” and “proof of stake”.
  2. How is this different from how truth is determined in a central database?
    In a traditional databases there is only one source of “truth” and there are many ways this can be corrupted, altered or defrauded.
    Blockchain databases can be verified as there are many copies and the protocol enforces that these remain in agreement.
#1068
  1. Consensus determines the truth – meaning that it takes a network of interconnected entities to verify what is valid from false.
  2. A centralized database can be the sole owner of “truth.” It’s very easy for a centralized source of information to simply lie.
#1069
  1. Requires multiple nodes to agree before xaction block is verified.
  2. Centralized would necessitate an authoritative, thus trusted, actor.
#1070
  • What does it mean when we say that in blockchain, consensus determine the truth?

Consensus is achieved when the network of computers comes to an agreement that a transaction is valid and therefore adds it to the ledger. They determine this by checking to ensure that the transaction came from a verified source. If at any point, the supply chain can’t be verified, it is rejected. but those making the transactions are incentivized to be honest, because they want to make money, so they will make honest transactions. In this way, the transaction is verified from all points in the supply chain, therefore it is carved in stone as the truth.

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

A central database is capable of being altered - information is included, then can be changed or overwritten. Generally, there is a central authority who determines what is the truth, and everyone else must trust that they are acting in good faith, or audit the database to determine if it is accurate. That takes time, is inefficient, and not accurate. No consensus. Hard to validate. And open to corruption.

#1071

Consensus -
When a decision is being made by the community simultaneously, and agreed upon by the network. With a blockchain the network can use mathematics to achieve consensus on a decentralized platform to create a trust less environment.
Difference between centralized & decentralized networks or databases -
Centralized databases require permission from a third party or the controller of the network / programming or code of the database.

#1072

  1. When we say that in blockchain, consensus determines the truth we mean that a network has verified the validity of each transaction.

  2. It is different from how truth is determined in a central database because there is no network verification. It relies on trust.

#1073
  • What does it mean when we say that in blockchain, consensus determine the truth?

Agreement between majority of network participants whether the data point can progress to the database or not, whether it is compliant with the other previously accepted database records or not. If not, the data point cannot be accepted, therefore it’s not true.

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

In a central database, a single company/user with appropriate permissions can accept the data in the database or not - prone to error, and can be reverted. With consensus, multiple nodes must agree upon accepting the data point, and once it’s accepted, it cannot be reverted without consensus of the network, or without adding another record into the network (A to B, then B to A instead of deleting A to B from the database), removing the risk of tampering with data or hiding stuff.

#1074
  1. What does it mean when we say that in blockchain, consensus determine the truth?
    all blockchain nodes “agree” to the say transaction or account
  2. How is this different from how truth is determined in a central database?
    central bank have no consensus and can be hacked or corrupted
#1075

  1. It means that the transaction it’s valid and validated for several members of the network, so it can be considered true.

  2. Because in a central database, the information could be modified, and no other entity has the authority to validate the integrity of the information that relay inside. So in the end, you have to trust in them.

#1076

What do you mean by that?
Everyone just has the same blockchain and needs to follow the same consensus rules. If 1 node has a different blockchain or something, it will get rejected by the network.

1 Like
#1077

It depends on wich system. Mostly it is a database on some centralized servers with a group of administers who can control what is truth or not.

#1078
  1. Different parties collaboratively reaffirm transaction. Requires multiple decision makers.
  2. Only requires proof of authority. Difficult to independently audit.
#1079

  1. In blockchain, consensus must be reached between individual nodes in a network regarding the veracity of a transaction. If a consensus is reached, then the transaction gets added to the blockchain. Incentives, including financial gain, are given to ensure that nodes are telling the truth.

  2. In a central database, truth is determined by the central authority, who could potentially remove or alter data.

1 Like
#1080
  1. In blockchain, consensus determines the truth, because the people of the network have incentives for telling the truth. They earn money if they tell the truth.
  2. Consensus connects all the people in the world because everyone want to earn money. In a central database there is a central entity who decide what is truth or false, so we can’t verify.
1 Like
#1081

  1. In Blockchain, consensus determines the truth. This means a network of computers all make a decision together to validate a transaction or data. Consensus is incentivised and therefore encourages trust.

  2. In a central database, truth is more often based on position of power and central authority.

1 Like
#1082
  1. In order to achieve a consensus, where the majority of the networks must agree on the transaction, it creates a verified environment (trustless) completely decentralized. Bitcoin transactions for instance are being validated by the Miners, who are incentivized to validate and tell the truth.
  2. Truth in central database is determined by an organization based on interests behind, while blockchain is based on a decentralized network consensus decision, the system verify the truth, not a single person or organization.
1 Like
#1083

  1. In blockchain, truth is determined by a network of independent verifiers therefore incentivising all parties to provide the truth

  2. A central database can only be verified by a central authority which cannot be fully trusted

2 Likes
#1084
  1. As soon as the whole network agrees on sth it becomes the truth.
  2. A central database can basically write it’s own truth or at least checking it’s trueness is much harder.
1 Like