ĐẠI HỌC NGÂN HÀNG THÀNH PHỐ HỒ CHÍ MINH

Chapter 3

CONSENSUS PROTOCOL
AND
MINING
TP. HCM 2022
 OVERVIEW

§ The Byzantine Generals Problem

§ Proof of Works
§ Proof of Stakes
§ Crypto currency mining

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 THE BYZANTINE GENERALS PROBLEM

The abstract problem:

§ Each division of Byzantine army is directed by its own general.
§ There are n Generals, some of which are traitors.
§ All armies are camped outside enemy castle, observing enemy.
§ Communicate with each other by messengers.
§ Requirements:
o G1: All loyal generals decide upon the same plan of action
o G2: A small number of traitors cannot cause the loyal generals to
adopt a bad plan
§ Note: We do not have to identify the traitors.
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THE BYZANTINE GENERALS PROBLEM

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 SOLUTION I: ORAL MESSAGES

A commanding general must send an order to his n-1

lieutenant generals such that:
Ø All loyal lieutenants obey the same order
Ø If the commanding general is loyal, then every loyal
lieutenant obeys the order he sends

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L. Lamport, R. Shostak, and M. Pease, “The Byzantine generals problem,” ACM TOPLAS, vol. 4, pp. 382–401, July 1982.
 SOLUTION I: ORAL MESSAGES

COMMANDER

v v
v

v x
LEUTENANT 1 LEUTENANT 2 LEUTENANT 3
v v
traitor

Final decision = majority(v,v,x) = v

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L. Lamport, R. Shostak, and M. Pease, “The Byzantine generals problem,” ACM TOPLAS, vol. 4, pp. 382–401, July 1982.
 SOLUTION I: ORAL MESSAGES
traitor
COMMANDER

x z
y

x z
LEUTENANT 1 LEUTENANT 2 LEUTENANT 3
y y

Final decision = majority(x,y,z) = default decision (retreat)

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L. Lamport, R. Shostak, and M. Pease, “The Byzantine generals problem,” ACM TOPLAS, vol. 4, pp. 382–401, July 1982.
 SOLUTION II: SIGNED MESSAGES

A signed message satisfies all the conditions of

oral message, plus two extra conditions:
§ Signature cannot be forged. Forged message
are detected and discarded by loyal generals.
§ Anyone can verify its authenticity of a
signature.
Signed messages improve resilience.
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 SOLUTION II: SIGNED MESSAGES

COMMANDER
COMMANDER

traitor

1{0} 1{0}
1{0} 0{0}

0{0,2}
traitor 0{0,2}

LEUTENANT 1 LEUTENANT 2 1{0,1}

LEUTENANT 1 LEUTENANT 2

discard

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 SOLUTION II: SIGNED MESSAGES
SIGNATURE PATH

v{0}
1
4
0 v{0,1}
v{0,1,5,4}
v{0,1,5}
5
6

v{0,1,5,4,6}

2 v{0,1,5,4,6,3}

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BLOCKHAIN CONSENSUS – PROOF OF WORK

difficulty

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 BLOCKHAIN CONSENSUS – PROOF OF WORK

difficulty

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 BLOCKHAIN CONSENSUS – PROOF OF WORK

Pros Cons
Better ability to be Slower transaction
decentralized speeds

Higher costs to
Better security
validate transactions

Higher energy
consumption
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BLOCKHAIN CONSENSUS – PROOF OF STAKE

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BLOCKHAIN CONSENSUS – PROOF OF STAKE

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 BLOCKHAIN CONSENSUS – PROOF OF STAKE

Pros Cons
Less energy Harder to truly
consumption decentralize the
network
Less security than
Financial opportunities
PoW

Faster transaction
speeds
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BLOCKHAIN CONSENSUS

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BLOCKHAIN CONSENSUS

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 BITCOIN PROOF OF WORK DIFFICULTY

§ Targets 10 minute average block generation time

§ Defined by the # of leading zeros Hash output requires to solve PoW
§ Adjusts every 2016 blocks - about every two weeks
§ Currently, > 18 leading zeros (out of 64 hexadecimal characters)

§ Block 749,952 (08/26/2022)- 19 leading zeros

00000000000000000007edd9a88903ad4f948bf3def71a520635ec769065429a
§ Genesis Block (1/3/09) – 10 leading zeros, though only required 8
000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f

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https://www.blockchain.com/
 BITCOIN PROOF OF WORK DIFFICULTY

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https://btc.com/stats/diff
 EVOLUTION OF BITCOIN MINING

GPU ASIC
2009 2010 2010 2013 2014
CPU Mining pools Mining farms

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BITCOIN MINING

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BITCOIN MINING

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 BITCOIN MINING REWARDS

Starts at 50 BTC / mined block Current: 6.25 BTC / mined

block
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Halves every 210,000 blocks
 BITCOIN NETWORK

§ Full Nodes – Store full Blockchain & able to Validate all Transactions
§ Pruning Nodes – Prune transactions after validation and aging
§ Lightweight Nodes - Simplified Payment Verification (SPV) nodes –
Store Blockchain Headers only
§ Miners – Performs Proof of Work & Create new Blocks - Do not need
to be a Full Node Mining Pool Operators
§ Wallets – Store, View, Send and Receive Transactions & Create Key
Pairs
§ Mempool – Pool of unconfirmed (yet validated) Transactions

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 READINGS

1. Narayanan, A., & Clark, J. (2017). Bitcoin's academic

pedigree. Communications of the ACM, 60(12), 36-
45. https://doi.org/10.1145/3132259
2. Ethereum white paper

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DISCUSSION

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