Since the creation of Bitcoin in 2008, as a peer-to-peer electronic payment system, many other cryptocurrencies have been created, each with a particular operating mechanism. But one thing that almost all cryptocurrencies have in common is the blockchain, a central element of their architecture.

With few exceptions, blockchains are intentionally designed to be decentralized and operate as a digital ledger managed by a distributed network of computer nodes. In this context, blockchain technology enabled the creation of economic systems free of the need for trust, in which transparent and reliable financial transactions could be executed without the use of intermediaries. Cryptocurrencies are being adopted as a viable alternative to traditional banking and payment systems, which rely heavily on trust.

Just like most distributed computing systems, participants in a cryptocurrency network must very regularly agree on the state of the blockchain, this is called reaching consensus. . However, achieving consensus across distributed networks, in a secure and reliable manner, is far from an easy task.

So how can a distributed network of computer nodes agree on a decision if some of the nodes are likely to fail or act dishonestly? This is the fundamental question of the so-called Byzantine generals problem, which gave rise to the concept of Byzantine fault tolerance.


What's wrong with the Byzantine generals?

Simply put, the Byzantine Generals Problem was conceived in 1982 as a logical dilemma that describes how a group of Byzantine generals can have communication problems when trying to agree on their next strategic move.

The dilemma assumes that each general has his own army and that each armed group is located in different locations around a city they wish to besiege. The generals must agree to attack or retreat. Whether they attack or retreat, all generals must reach a consensus, that is, agree on a common decision in order to execute it in coordination.

Therefore, we can consider the following objectives:

  • Each general must make a decision: attack or retreat (yes or no);

  • Once the decision is made, it cannot be changed.

  • All generals must agree on the same decision and execute it in synchronization.

The aforementioned communication problems are linked to the fact that one general can only communicate with another through messages that are transmitted by an emissary. Therefore, the central challenge of the Byzantine generals problem is this: messages can be delayed, destroyed or lost.

Additionally, even if a message is successfully delivered, one or more generals may choose (for whatever reason) to act maliciously and send a fraudulent message in order to confuse the other generals, thus resulting in complete failure .

If we apply the dilemma to the context of blockchains, each general represents a network node and the nodes must reach a consensus on the current state of the system. In other words, the majority of participants in a distributed network must agree and perform the same action in order to avoid complete failure.

Therefore, the only way to achieve consensus in these types of distributed systems is to have at least ⅔ reliable and honest network nodes. This means that if the majority of the network decides to act maliciously, the system is prone to failures and attacks (like the 51% attack).


Byzantine Fault Tolerance (BFT)

In a nutshell, Byzantine Fault Tolerance (BFT) characterizes a system capable of withstanding the range of faults derived from the Byzantine Generals Problem. This means that a BFT system is able to continue operating even if some of the nodes fail or act maliciously.

There is more than one possible solution to the Byzantine generals problem and, therefore, multiple ways to construct a BFT system. Likewise, there are different approaches for a blockchain to achieve Byzantine fault tolerance, which leads us to consensus algorithms.


Blockchain consensus algorithms

We can define a consensus algorithm as a mechanism by which a blockchain network achieves consensus. The most common implementations are proof of work and proof of stake. But let's take the Bitcoin case as an example.

While the Bitcoin protocol prescribes the main rules of the system, it is the PoW consensus algorithm that defines how these rules will be followed in order to achieve consensus (for example, when verifying and validating transactions).

Although the concept of proof of work is older than cryptocurrencies, Satoshi Nakamoto developed a modified version of it as the BFT algorithm and system that enabled the creation of Bitcoin.

Note that the PoW algorithm is not 100% tolerant of Byzantine faults, but due to the expensive mining process and underlying cryptographic techniques, PoW has proven to be one of the most secure and reliable implementations. more reliable for blockchain networks. In this sense, the Proof of Work consensus algorithm, designed by Satoshi Nakamoto, is considered by many to be one of the most relevant solutions to Byzantine mistakes.


Conclusion

The Byzantine Generals Problem is an intriguing dilemma that ultimately gave rise to BFT systems, which are widely used in various scenarios. Beyond the blockchain sector, some use cases for BFT systems include the aviation, space, and nuclear energy sectors.

In the context of cryptocurrency, effective network communication coupled with a good consensus mechanism are essential for any blockchain ecosystem. Securing these systems is an ongoing effort and existing consensus algorithms still need to overcome some limitations (such as scalability). Nonetheless, PoW and PoS are very interesting approaches as BFT systems, and their potential applications certainly call for widespread innovation.