What is the heart of blockchain technology?

There is no doubt that blockchain technology is complicated. However, it fascinates me that someone could develop the concept and even make it work in the real world. The use cases of the technology are far and wide. It can be used in any industry. It can also improve efficiency in the segments that are heavily nominated by centralised entities and intermediaries. 

One of the major roles of marketing is to educate consumers about products, services and industries. The logic is simple – if people do not understand what you do, it would be impossible for them to get on board. When an adoption or a usage is low, there is no future for the product. I would argue that blockchain is a technology that needs a lot of educational push. It is a great technology that could (and will) change the world. It could (and will) eliminate most if not all middlemen in every industry. 

One of the challenges of blockchain technology is it’s complicated to understand. In addition, one of the major use cases, cryptocurrency, took over the scene with all of the good and the bad perceptions. When I told my family about cryptocurrency, the only thing I heard was concerns and concerns. I told them the same thing I am about to tell everyone here that I think blockchain technology is fascinating, and it can offer more to the world than the misperceptions flying around.   

I talked about blockchain technology in my previous post. Today, I will talk about the heart of this technology. What is the core concept of blockchain? And, it’s actually not as complex as everyone thinks. 

The Two Generals’ Problem

To better understand how blockchain works, we need to understand the problem it tries to solve first. The Two Generals’ Problem is a classic unsolvable problem in distributed systems that concerns reaching consensus over a lossy network. Imagine there are two generals in an ancient time. They don’t have a mobile phone or the internet to communicate with each other. Their job is to attack a city, and they set up their army on the opposite sides of the city. To successfully attack the city, they have to take an agreed action simultaneously, meaning they have to work in sync. Because they can only communicate by using a horseman, the risk is he could be captured during the delivery. The message could be tempered, resulting in both generals getting different messages. 

Remember, this problem only involves two parties. The situation would become even more complex if there were multiple parties with greater distance. How could they coordinate and reach the same consensus? One or more of the generals could be a traitor, meaning they could lie about their choice. The complex version of this problem is called “The Byzantine General Problem”

What is Byzantine Fault Tolerance (BFT)?

The short answer is BFT is a solution to the Byzantine General Problem. As mentioned earlier, multiple people are involved in trying to achieve a specific goal (i.e. successfully attacking the same enemy). The core idea of BFT is that the system can continue operating even if some of the nodes (or Generals in this example) fail or act maliciously. It can be done by setting up a system with at least ⅔ or more reliable and honest network nodes to proceed with the task (or reaching the same consensus). The flip side of this logic is that if the majority of the nodes decide to act maliciously, the system is susceptible to failures and attacks. 

When applied to blockchain technology, Byzantine Fault Tolerance is a mechanism that enables a decentralised, trustless network to function even in the presence of malfunctioning or malicious nodes. For a trustless network to operate successfully, participants adhere to a predetermined consensus mechanism. However, some nodes will likely fail, misbehave, or act maliciously, resulting in conflicting information to different parts of the network. Byzantine Fault Tolerance (BFT) allows a network to continue functioning as long as two-thirds of the network remains compliant.

Final Thoughts

Blockchains are decentralised ledgers which by definition, are not controlled by the central authority. Due to the value stored in these ledgers, bad actors have massive incentives to try and cause faults. The big breakthrough of blockchain technology was when Satoshi Nakamoto introduced Proof of Work as a consensus mechanism for Bitcoin in 2008. The solution that blockchains offer could change the world by removing all centralised entities and intermediaries. As I said in my previous post, blockchain technology is not a Ponzi scheme, and cryptocurrency is just one of its many use cases. We will see more and more technology adoption in the very near future. 

Until next time…


Leave a Reply