Agreeing without a central authority.
WHAT THE PROBLEM IS
Distributed participants, some possibly dishonest, agreeing on one version of the record.
WHY IT IS HARD
Messages are delayed, participants may lie, and there is no arbiter.
WHAT A CONSENSUS MECHANISM PROVIDES
A rule determining which version is accepted, and a cost to attempting otherwise.
WHAT ALL MECHANISMS MUST ACHIEVE
Preventing the same funds being spent twice Determining block order Making dishonesty expensive relative to its reward
WHY COST MATTERS
Security rests on attack being more expensive than the gain.
WHAT THE MAIN FAMILIES ARE
- Work-based: proving computational effort was expended
- Stake-based: participants committing value that can be forfeited
- Authority-based: a known set of validators
Byzantine fault tolerant protocols, in permissioned settings
WHAT SECURITY DEPENDS ON IN EACH
- Work: the cost of acquiring computing power
- Stake: the cost of acquiring and risking holdings
- Authority: the honesty of named participants
WHAT A FIFTY-ONE PER CENT ATTACK IS
Controlling enough of the network to determine which blocks are accepted.
WHAT IT PERMITS
Reversing recent transactions and spending funds twice.
WHAT IT DOES NOT PERMIT
Creating funds, or spending others' holdings.
WHAT MAKES IT PRACTICAL
Small networks, where acquiring that share is affordable.
