How Blockchain solves the Byzantine Generals Problem?

The Byzantine Generals Problem is one of the primary game theories used in the development of a blockchain. It serves as the foundation for Byzantine Fault Tolerance (BFT) and algorithms built around it. Although Satoshi Nakamoto did not use BFT in his implementation of Bitcoin, the concept of the Proof-of-Work (PoW) consensus mechanism is based on it. Let’s examine what it is and how blockchain manages to solve this problem.

What is Byzantine Generals Problem?

The Byzantine Generals Problem was formulated in 1982 by Marshall Pease, Robert Shostak, and Leslie Lamport. It is a game theory problem that describes how difficult it is for decentralized parties to come to a consensus when there is no trusted central party. 

In this problem, the Byzantine army is divided into numerous battalions, each of which is commanded by a different general. The generals need to reach an agreement (consensus) on whether to carry out the attack or not. 

However, generals face several problems while reaching a consensus. The armies are separated by a distance because they are not directly adjacent to one another. Coordination is required for the attack plan to be carried out. They have to use messengers to communicate to decide on a common course of action in which all battalions work together and launch simultaneous attacks from all directions in order to be successful. 

Additionally, there is no assurance that the message will arrive at its intended location, and the messengers cannot be trusted either. Traitors will likely attempt to foil their plan by intercepting or altering the messages. This challenge's goal is for all of the loyal commanders to come to an agreement without any interference from the imposters.

Why do we need distributed systems for payments? 

Although the form of money has changed over time, from metal to paper to digital, its significance has remained the same throughout human history. Currently, a recognized centralized party is in charge of maintaining our monetary system. The central party chosen by the people is responsible for ensuring that the value of money is the same throughout society. However, it was later discovered that those central parties, no matter how qualified they were, were not completely trustworthy because it was so easy for them to manipulate the data.

The fundamental problem with centralized systems is that they are vulnerable to corruption, which means that the data can be manipulated by anyone who has access to the database because the centralized system concentrates all power in the hands of a single central decision-maker.

Furthermore, centralized systems do not address the byzantine generals problem, which requires that truth be verified in an explicitly transparent manner. They avoid dealing with the issue entirely by foregoing transparency to achieve efficiency quickly. Thus, centralized systems provide no transparency, increasing the possibility of data corruption.

Distributed systems have many inherent advantages, but, they are vulnerable to the byzantine generals problem because they lack a reliable source of information and have no way of verifying information received from other network users. The system must be completely secure, as transactions are going to take place between strangers who do not know or trust one another.

As a result, Bitcoin was created to decentralize the money system by utilizing blockchain technology to make money verifiable, counterfeit-resistant, trustless, and independent of a central agency. Instead of an opaque centralized party, the work is carried through the network nodes. Nodes approve the transactions by reaching a consensus.

How Blockchain solved the Byzantine Generals Problem?

A blockchain can be used to solve the byzantine general problem. Each person acts as a general, waiting for orders to attack or defend their position. There are no middlemen or messengers to arbitrate the attack; the general must make his decision entirely on his own.

Blockchain creates a layer that can be trusted without requiring each individual to be trusted. This is accomplished by bringing together a large network of nodes to agree on the piece of information before it is recorded. In the context of byzantine generals, a single value that is passed must be agreed upon by all the generals in this problem. If the general is unsure about the content of the communication, the other generals can confirm it using what they already know to be true.

The position of the byzantine army can be seen in computer networks. The divisions can be thought of as computer nodes in a network, and the commanders as programs running a ledger that records transactions and events in the order they happen. The ledgers are the same for all systems, and if one of them is changed, the other ledgers are updated as well if the changes are verified, so all distributed ledgers should agree.

However, reaching an agreement is difficult because generals are unaware of the decisions of other generals. So, once one node has recorded it, a copy is sent to all the other nodes in the network. A consensus algorithm such as proof-of-work is employed to accomplish this agreement process. This algorithm helps in validating a given value or information. 

Also, bad actors will continue to try to defraud the system, the information isn't always accurate. To solve this problem, a blockchain has fault-tolerant mechanisms and security in place because it was designed to be used by the general public. Cryptography was required in this scenario to ensure that the messages could not be altered. The system provides key pairs for digitally signing a communication to verify identity and prove that it was sent by the intended recipient. Messages are recorded after they have been authenticated for transparency and historical accountability.

In a nutshell, Blockchain solved the byzantine generals problem in a distributed system by treating generals as network nodes and applying a consensus algorithm that helps the generals to verify the information. For further security, blockchain uses cryptography which ensures that the information is not altered at any stage. Let's use the instance of Bitcoin to examine this in greater depth.

The Byzantine generals problem and Bitcoin’s Proof-of-Work (PoW)

In October 2008, Satoshi Nakamoto published the famous Bitcoin whitepaper. Despite the absence of the term "Byzantine Generals Problem" in this document, Bitcoin was the first realized solution to the Byzantine Generals Problem in terms of money. Before Bitcoin, many projects attempted to create money that was independent of the central authority or government, but they all failed in some way.

As a monetary system, Bitcoin has the ability to handle ownership and avoid double-spending. To accomplish this in a trustless manner, Bitcoin employs a blockchain, which stores a history of all transactions. All nodes in the Bitcoin network are able to agree on which transactions occurred when and in what order, verifying Bitcoin ownership and creating a working, trustless monetary system without the need for a centralized authority.

Bitcoin address the Byzantine general problem in a digital electronic network using cryptographic security and public-key encryption. Cryptographic security employs hashing, an encoding process, to prevent data tampering. A network user's identity is verified using public key encryption.

In cryptographic security, information is secured in a block that is linked to other blocks by its hash value. Every valid block in the network is originated from the first block, also known as the genesis block. All hashes can be traced back to the genesis block, which is the root of all hashes. It uses a Merkle Tree to validate hashes generated by the genesis block. 

Bitcoin established a clear, objective rulebook for the blockchain by employing a proof-of-work consensus mechanism. Proof of work (PoW) is a method of adding new blocks of transactions or information to a cryptocurrency's blockchain. PoW requires network participants to present proof of their work in the form of a valid hash for their block, i.e. piece of information, to be considered valid. Miners validate blocks and compete with one another to solve cryptographic puzzles to create blocks.

However, this process forces miners to expend significant amounts of energy and money to generate blocks. So, they are incentivized with rewards in the form of Bitcoin for broadcasting accurate information and thus protecting the network. When the miner who solved the puzzle broadcasts the solution to the network, all other miners must validate the value or deny it if it is incorrect. 

Blockchain is immutable, which implies that once a block is added to the blockchain, it is extremely difficult to change or remove. As a result, blockchain network participants always agree on the state of the blockchain and all transactions within it. Each node verifies whether blocks satisfy the proof-of-work criterion and whether transactions satisfy additional criteria.

If a network member attempts to broadcast false information, all nodes on the network will recognize it as objectively invalid and disregard it. There is no need to trust other Bitcoin network members because each node can verify all information on the network, making Bitcoin a trustless system.

Byzantine Fault Tolerance

While the consensus process is being carried out, it is discovered that not all nodes are honest; there are bad actors, and some nodes may fail too. In the Byzantine analogy, some generals may disagree on attacking the city, leading to a critical system failure, and the mission is not accomplished due to disagreement by unreliable actors. However, in reality, the failure of some nodes, and the presence of bad actors do not affect the system's performance. This is possible due to Byzantine Fault Tolerance

Byzantine Fault Tolerance aims to develop algorithms that allow systems to make uniform, reliable decisions despite the presence of corrupt elements in the network. Here are some of the key characteristics of a Byzantine Fault Tolerance algorithm in the blockchain.

1. BFT occurs when a certain percentage of the network nodes can agree or reach a consensus while the system continues to function properly.

2. The algorithm should strive for the highest level of group agreement possible. 

3. Each participant's vote should be given equal weight.

4. People in the network should be allowed to participate in the consensus process to ensure that it meets the true majority condition.

5. Furthermore, the algorithm should encourage collaboration among all participants to achieve the best possible solution for everyone.

The BFT is quite essential to build a decentralized network. The most popular consensus protocols for blockchain networks, such as proof-of-work and proof-of-stake, have some BFT characteristics. 

More creative approaches to designing BFT systems will be discovered and implemented as more individuals and businesses investigate distributed and decentralized systems. BFT-based systems are also used in industries other than blockchains, such as nuclear power, space exploration, and aviation.

Conclusion

The application of blockchain technology can provide an effective solution to the Byzantine Generals' Problem. It all comes down to providing a way to communicate securely and with trust in a highly uncertain environment. It's quite fascinating that most transactions take place between strangers who do not know or trust one another. Each person is like a general, waiting for orders to attack or defend. 

Since the system was designed to be used by the general public, there are fault-tolerant measures and security in place. Because information is not always perfect, bad actors will try to affect the system. Cryptography is required  to ensure that tampering with the messages is not allowed. The system also provides key pairs for digitally signing a message to verify identity as proof that it is from the person or entity it claims to be. Once messages have been validated, they are recorded for transparency, providing historical evidence for accountability.

Hopefully, you were able to grasp the procedures that enable blockchain to include security features in its functioning. Moving from a centralized security system, such as banks, to the crypto world of sophisticated computing requires a collaborative effort and transparency to reduce corruption.