Consensus Mechanism in Blockchain Technology

[TheVeteranAngel]

Blockchain technology aims to enable decentralization. But how are transactions kept secure in a decentralized system?

Without a central authority, how are disputes resolved on the blockchain? Can all transactions be trusted to be valid? Is there a risk of users spending funds they don't own since there’s no one to validate transactions?

In blockchains, nodes replace central authorities. These nodes uphold the blockchain's integrity through consensus mechanisms, which are systems for reaching agreements on the network.

For example, Bitcoin, created by Satoshi, uses a consensus mechanism called Proof of Work (PoW). Before a transaction is added to the Bitcoin blockchain, nodes (powerful computers operated by people) solve complex computations to validate it. If a transaction is invalid, the nodes can reject it. Conversely, valid transactions are accepted.

While Proof of Work (PoW) and Proof of Stake (PoS) are the most well-known consensus mechanisms, others include Delegated Proof of Stake (DPoS), Proof of Authority, Proof of Activity, Proof of Capacity, Proof of Burn, and Proof of Elapsed Time.

[Mia Chloe]

Firstly it's important to understand that not all block chain networks are decentralised. Centralised networks such as that of Ethereum also exist bitcoin happens to be decentralised as a product of satoshi's enthusiasm towards the perfect P2P currency without a third party .

Decentralisation in block chain networks simply means that the network is not controlled by a central body (e.g the government) rather all users of the network have relatively equal rights.

Block chain networks make use of one of the safest form of data storage mechanism which is arrangement of data in a sequencial chain form. Now the reason it's safe is because In other for an anomaly to attack an old set of data they would have to first alter all recent ones before that particular data. And this can be very difficult meaning the older the data the more difficult it is to tamper.

For example, Bitcoin, created by Satoshi, uses a consensus mechanism called Proof of Work (PoW). Before a transaction is added to the Bitcoin blockchain, nodes (powerful computers operated by people) solve complex computations to validate it. If a transaction is invalid, the nodes can reject it. Conversely, valid transactions are accepted.

In simple terms , bitcoin POW gives every mined coin a data stamp of origin. This is to ensure that the coins can be spent in a transaction since miners have to confirm the coin has an authentic origin to avoid confirming a faked coin.

[BitMaxz]

I thought you were asking but you already answered them. Bitcoin has a set of consensus rules better read the bitcoin protocol to understand it a bit better.

Take note that the powerful computer that solves complex computations to validate transactions are ASIC miners. The one you currently reading is not updated and take note it is not the ones who validate the transaction first it should go to the nodes you don't need a powerful computer just to have or set a full node and they are responsible for validating the transaction and verify it's integrity and if it's following a consensus rule. Once the transaction is valid it will be sent to Bitcoin miners(ASIC miners) for verification through PoW to mine the block and validate it and it will go back to nodes to check its authenticity.

Look at this image


Source: https://www.researchgate.net/publication/339635806/figure/fig1/AS:865720778895361@1583415326368/alidation-and-verification-role-of-nodes-in-the-Bitcoin-transaction-life-cycle-see-red.jpg

[Felicity_Tide]

Blockchain technology aims to enable decentralization. But how are transactions kept secure in a decentralized system?

You see, unlike a centralized authority that is fully in charge of one's security, transactions on a decentralized system are made secure by the large number of nodes in the Bitcoin network, i.e the more the participating nodes, the higher the security. This also means that the more genuine nodes there are, the more secure our transactions become. Immutability is a practical name for it, as it describes how difficult it is for someone to rewrite, adjust or remove transaction data from the Bitcoin Blockchain. With the help of the Bitcoin consensus protocol, there will be a high resistance to change or manipulation of transactions.

Without a central authority, how are disputes resolved on the blockchain?

This is one of the key attributes of Bitcoin that makes me like it. First, let's relate this form of disputes to the Bitcoin network in general, with the Blockchain inclusive. There are cases where someone might propose an additional update to the Bitcoin network, but it ends up being declined. This clearly shows the power of decentralization, where the Bitcoin community tends to decide what to approve and what to reject. Also you should know that before suggesting an update to the community, it must be written in a BIP form. There are so many BIPs that have been rejected, while others were accepted just to improve the Bitcoin network. It's just about who is for and who is against, something like a voting system.
You can use this link to see examples of BIPs: https://github.com/bitcoin/bips/tree/master


Still a learner by the way, DYOR