HBC Blockchain 101 – Part 5: What is consensus?

What is Consensus?

In simple terms, consensus is the agreement between all parties in a system on a specific state of affairs. In the context of a blockchain, it means that all participants must agree on who owns which assets and how these are transferred.

Consensus in the Physical and Digital World

In the physical world, consensus is relatively easy to achieve. For example, if we buy a sandwich with a five-euro bill, it is clear that the bill cannot be simultaneously in our wallet and in the store’s cash register.

In the digital world, however, the situation is more complex. Information about who owns which assets is often stored in a ledger that exists only in the minds of the participants in the system. For this reason, a mechanism is needed to ensure that the ledger is accurate and reliable.

Decentralized Systems and Consensus

Blockchains are decentralized systems, meaning there is no central authority to trust for managing the ledger. Consensus, therefore, becomes essential for ensuring that all participants have the same view of the “truth”, such as who owns how many Bitcoin.

The “Double Spend” Problem

One of the main problems that blockchains must address is the “double spend”. This occurs when a user tries to spend the same Bitcoin twice. Consensus helps prevent this problem by ensuring that all participants are aware of all transactions that occur on the blockchain.

Conclusion

In future videos, Dr. Finlow-Bates will delve deeper into the various techniques and mechanisms used to achieve consensus in blockchains. If you are interested in learning more, we invite you to watch the next videos in the series.