A group of generals have surrounded an enemy city.

They have to attack or retreat, but must wait to see what their commanding officer will order them to do.

In order for the mission to succeed, it is imperative that a consensus exists among all the generals.

Correspondence between the commanding officer and the generals is done through insecure and vulnerable mediums.

What’s more, a number of generals or perhaps even the commanding officer could turn out to be traitors.

As long as the commander remains loyal, and the number of traitors is less than 1/3 of all the generals, then consensus may be reached to attack or retreat.

Naturally, a loyal general would receive contradictory messages from the commander and from a general who happens to be a traitor.

In this scenario, it is not possible to achieve more than 50% consensus.

The reason it’s important to understand the Byzantine Generals Problem is because the Bitcoin system faces a similar issue as it also transmits information through an insecure medium (i.e. the internet).

This is why Nakamoto introduced the proof-of-work concept, in order to bypass it.

When sending a message, the message is hashed and a nonce is sent to all nodes to verify the proof-of-work.

Unlike the Byzantine example, the transmission of transactions or blocks (i.e. the “correspondence”) is therefore done through more secure and near-invulnerable methods.

Every message (that is, every block) is chained; as a result it is almost impossible to tamper with it.

Cryptocurrency has no central server

Distributed System – In computer networks there are mainly two architectures: client server and peer-to-peer.

We have already covered P2P, which is the main foundation for Nakamoto’s Bitcoin network – and it was clear from the start that Bitcoin will not be based on a clientserver protocol, as that is a centralised environment where the applications, files and other resources are stored on a central computer, the server.

So, what did Nakamoto do to replace the second main architect model?

He came up with a relatively innovative alternative: the distributed system.

The Bitcoin network follows this distributed application model, wherein the work load is spread among the participated nodes (or computers) – without a central server.

In order to maintain reliability in the network, a consensus must be reached among the participating computers.

Although 100% consensus is ideal, it is not feasible every time.

When “digging” into computer networks, one will come across the Byzantine Generals Problem.

What is the Future of Bitcoin?

The current situation of bitcoin is that a number of countries still prohibit the buying, selling and trading of it.

In other countries the use of bitcoin is still disputed and under very careful scrutiny by their respective governments.

The reason for this fragile state of the bitcoin is that governments fear losing control.

This creates a panic that in the future, this lack of control may open doors to unforeseen problems where governments and regulatory bodies will not be able to step in and draft, plan and execute monetary policies that can fix the problem.

With that said, however, many countries have adopted bitcoin as a legitimate form of currency and have accepted that it’s here to stay in some shape or form.

While some may have a more conservative approach with regards to the new digital currency, it is clear that Bitcoin technology has already taken root.

Even if bitcoin the currency loses all of its value one day – depending on market action and how future regulations treat it – it is clear that the Bitcoin network and the technology that the currency was built on will have a long life.

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