How does Bitcoin solve the Byzantine Generals Problem?

Within distributed computing, there is a significant issue called the Byzantine Generals Problem. This problem, in a nutshell,  is a problem that arises when multiple systems inside a network need to connect but communication channels and messages cannot be totally trusted. Why does this problem arise and how this can be solved? This article will explain the Byzantine Generals Problem and how does Bitcoin helps solve it.

The Byzantine Generals Problem

Assume you’re a general in the Byzantine Empire’s army.  Around an enemy city, there are several other armies camped and you’re all trying to figure out when to strike. Attack at the same time will benefit both parties. You will be successful in your retreat if both parties retreat together. If only one of you attack while others retreat, you’ll fail and lose a lot of people on your side. The issue is with the generals’ communication because to communicate with one another, each army utilizes the same messenger. The courier can only move between armies by sneaking past the enemy city, which renders the messenger untrustworthy because there is no way of knowing whether or not the message you are receiving is accurate. The messenger might be kidnapped, a general might be a traitor, or you might not get a piece of news at all. This situation is a crucial difficulty in distributed computing and multi-agent systems, in which numerous methods cannot reach a 100% confident agreement.

Byzantine Fault Tolerance

Byzantine Fault Tolerance is the term for the trait given above. It is one of the most problematic types of computing failures because it involves instances in which one portion of a system appears to be both working and failing to the rest of the system simultaneously. Money is an excellent example of the Byzantine generals dilemma. How can a community create a monetary system everyone believes in and accepts? For most of history, societies have utilized precious metals or other rare things as currency, such as shells or glass beads.  Because gold was trusted and recognized across decentralized institutions like international trade, it solved the problem of the Byzantine generals.

Bitcoin’s PoW: a solution to the Byzantine generals problem

Prior to Bitcoin, there were various attempts, such as Nick Szabo’s Bit Gold, to create decentralized digital money. They all failed, however, since they were unable to successfully implement a Byzantine generals fault-tolerant algorithm. Satoshi Nakamoto (the father of Bitcoin) solved this problem by incorporating a particular type of consensus mechanism known as ‘Nakamoto Consensus’ into the Bitcoin protocol. To put it another way, the nodes in the Nakamoto consensus system require some ‘skin in the game’ to encourage them to participate honestly in the system. Proof-of-work (POW),’ often known as ‘mining,’ is the Nakamoto consensus employed in Bitcoin.  The participants, known as ‘miners,’ in this system devote a significant amount of computational power to solving cryptographically complex challenges. This use of resources is referred to as ‘labor.’ This is the skin used by the miners in the game. Cryptographic security employs hashing, an encoding process, to prevent data manipulation. A network user’s identity is verified via public key encryption. In cryptographic security, a transaction is secured in a block that is linked to other blocks by its hash value. All hashes may be traced back to an initial block, which is the root of all hashes. The blockchain is a system that verifies hashes from a genesis block using a Merkle Tree. Because the rules are objective, there can be no disagreement or manipulation with the information on the Bitcoin network. Both the mechanism for determining who is eligible to generate new Bitcoin and the laws governing which transactions are valid or invalid are goals. Furthermore, once a block has been added to the blockchain, it is difficult to erase it, rendering Bitcoin’s history irreversible. As a result, miners who are akin to generals in Satoshi’s version of the blockchain solve the Byzantine generals problem.

Proof-of-stake (PoS): a novel solution to the Byzantine generals problem

Another blockchain consensus mechanism aimed at solving the Byzantine generals problem is PoS. The first time it was used was in 2012. Unlike PoW-based networks, PoS networks do not rely on cryptocurrency mining; instead, a method known as staking is used. This system is funded by users (known as validators). Validators with more currencies on a blockchain are able to validate more blocks and earn higher rewards. Users that try to validate erroneous transactions risk losing their money. In a PoW-based network, users can stake money using regular home computers rather than specialist devices. Several PoS-based networks have devised methods to avoid double-spending attacks and other security flaws induced by Byzantine failures.

Quick takeaways

Blockchain technology has been dubbed the ‘new internet of value,’ and it is expected to revolutionize the way we transact and interact with businesses. Through decentralized systems and distributed power, it is a method of obtaining consensus and reaching an agreement on a condition of affairs. Bitcoin and other cryptocurrencies are examples of how blockchain technology may be used. The potential of blockchain to build trust (without involving any third party) is its most valuable asset. Participants who may not trust each other can interact with the assurance that data shared between them will be verified and authenticated by a dispersed network. Blockchains are used in a variety of areas, including real estate, healthcare, education, finance, logistics. Cryptographic security, public-key encryption will revolutionize the world.

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