In the constantly evolving world of blockchain technologies, Nakamoto's consensus represents a genuine revolution and marks a decisive turning point in the way data is managed and secured in decentralised networks. To fully understand the impact of this innovation, it is essential to look back at the history of consensus systems and examine how Nakamoto's consensus differs fundamentally from its predecessors.
Before the advent of blockchain and Nakamoto's consensus, IT systems relied mainly on centralised databases to store and verify information. These systems, while powerful, presented significant risks in terms of security and single points of failure. The need to decentralise and secure transactions efficiently led to the search for new consensus methods.
Early decentralised consensus systems, such as those used in Byzantine Fault Tolerance (BFT) networks, required agreement between a majority of participants to validate information. However, these systems were often limited to a small number of validators, which could lead to problems of scale and unintended centralisation.
The Nakamoto consensus, named after its anonymous creator Satoshi Nakamoto, was introduced with the publication of the Bitcoin white paper in 2008. The system is based on a process called "proof of work", which requires participants (miners) to solve complex cryptographic puzzles in order to validate transactions and create new blocks on the blockchain. The first miner to solve the puzzle receives a reward in the form of cryptocurrency, while adding a new block to the chain.
In the context of digital currencies before Bitcoin, the problem of double spending was a major challenge. This problem arises when the same digital currency unit is spent more than once. Traditional financial systems avoid this problem by using centralised intermediaries, such as banks, which check each transaction to ensure that the funds have not been spent previously.
By using proof of work and a public register (the blockchain), each transaction is verified and confirmed by a network of participants. Once a transaction is included in a block and the block is added to the blockchain, it becomes extremely difficult to modify or delete it without redoing the cryptographic work on all the subsequent blocks, which would require colossal computing power.
When a transaction is completed, it is transmitted to the network and placed in a pool of unconfirmed transactions. The miners select these transactions and attempt to create a new block to be added to the blockchain. For a block to be accepted by the network, it must include a valid proof of work, which guarantees that the effort required to confirm the transactions and include them in the blockchain has indeed been made. This makes tampering with the blockchain extremely difficult and costly in terms of computing power.
The Nakamoto Consensus has gone far beyond cryptocurrencies to influence other areas requiring security and decentralisation. For example, it is used to secure legal documents and ensure traceability in supply chains, thereby improving transparency and reducing fraud. In the financial sector, it enables faster and cheaper international transactions than traditional methods.
The Nakamoto consensus is considered revolutionary for several reasons.
Firstly, it eliminates the need for a trusted intermediary, thereby reducing costs and potential points of failure. Secondly, it offers enhanced security against malicious attacks and fraud by making the system resilient to manipulation by a small group of actors. Finally, its ability to operate transparently and immutably in a decentralised environment opens up vast possibilities for applications beyond digital currencies, including smart contracts and electronic voting systems.
The Nakamoto Consensus is much more than just a technology; it is an innovation that redefines the rules of the game in terms of digital security and decentralisation. Its impact will continue to be felt in many sectors, transforming not only finance, but also the way we manage information and validate transactions in a digital world.
