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Why is Proof-of-Work a Cornerstone of the Nakamoto Consensus Mechanism?
Delve into the Nakamoto consensus mechanism and its fundamental principles for maintaining blockchain integrity. Understand how proof-of-work secures the network, validates transactions, and prevents malicious attacks, forming the foundation of blockchain security.
Question
Describe the Nakamoto consensus mechanism and its role in maintaining blockchain integrity. What is a fundamental principle of the Nakamoto consensus?
A. The mechanism uses proof-of-work to secure the network.
B. Proof-of-stake is central to Nakamoto consensus.
C. Nakamoto consensus increases transaction privacy by default.
D. Transactions are validated by a single entity in Nakamoto consensus.
Answer
A. The mechanism uses proof-of-work to secure the network.
Explanation
Nakamoto consensus relies on proof-of-work to validate transactions and secure the blockchain. Nakamoto consensus, named after Bitcoin’s pseudonymous creator Satoshi Nakamoto, is a system that allows a decentralized network to agree on the state of a shared ledger. Its fundamental principle is the use of a Proof-of-Work (PoW) algorithm to achieve consensus, validate transactions, and secure the blockchain against attacks.
Proof-of-Work and Blockchain Integrity
The mechanism works by having network participants, known as miners, compete to solve a complex mathematical puzzle. This process requires significant computational power, which constitutes the “work” in proof-of-work.
- Transaction Validation: The first miner to solve the puzzle gets the right to create the next block of transactions and add it to the blockchain. By doing so, they validate the transactions within that block.
- Network Security: To alter a past transaction, an attacker would need to redo the proof-of-work for that block and all subsequent blocks, and do it faster than the rest of the network. This would require an immense, and practically infeasible, amount of computational power (known as a 51% attack), making the blockchain immutable and secure.
- Longest Chain Rule: Nakamoto consensus operates on the principle that the longest chain is the valid one, as it represents the greatest amount of computational work invested. This resolves any temporary disagreements or forks in the network, ensuring all participants eventually agree on a single history of transactions.
Analysis of Incorrect Options
B. Proof-of-stake is central to Nakamoto consensus. This is incorrect. Proof-of-Stake (PoS) is an alternative consensus mechanism where block creators are chosen based on the number of coins they hold or “stake”. While some modern blockchains use PoS, Nakamoto consensus is specifically defined by its reliance on Proof-of-Work.
C. Nakamoto consensus increases transaction privacy by default. This is misleading. While blockchain transactions use pseudonymous addresses instead of real-world identities, the ledger itself is public and transparent. All transactions are recorded and visible to anyone on the network, which does not inherently increase privacy.
D. Transactions are validated by a single entity in Nakamoto consensus. This is false. The core principle of Nakamoto consensus is decentralization. Validation is not performed by a single trusted entity but by a distributed network of competing miners. This removes single points of failure and censorship.
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