Proof of Work and the Byzantine Generals Problem
Even though I previously wrote about the breakthrough technology of the blockchain, it is Proof of Work that truly turned the world of money upside down and created a revolution by connecting abstract technology with the real world. Proof of Work (PoW) finally solved the mathematical concept known as the “Byzantine Generals Problem,” which was a fundamental challenge in decentralized communication.
What is the Byzantine Generals Problem?
Imagine a group of Byzantine generals preparing to attack a city. The generals are positioned around the city and can communicate with each other only through messengers.
- If all generals attack at the same time, they win.
- If all generals retreat at the same time, they save their armies.
- If some attack while others retreat, they lose.
The core issue is trust in the messengers. What if someone intercepts a messenger and the information never reaches everyone? What if someone sends false information? How can we ensure that the truthful message reaches all generals?
How did Proof of Work solve it?
Proof of Work solved this problem. How? A big part of the credit goes to miners. Bitcoin miners solve a difficult mathematical task (a hashed piece of information) that is extremely hard to find, yet very easy for everyone else to verify once it is found.
Think of a safe that opens only when you enter the correct four-digit code. How do you find it? There is no shortcut—you can only try: 0001, 0002, 0003… until the lock opens. 6577! After a long search, we found the desired code: 6577.
How can everyone verify that I’m telling the truth? Simple: they enter 6577 and confirm the safe opens. In a very simplified way, this is how Bitcoin miners search for the “right number.”
The winner—the miner who finds it first—broadcasts this information to the entire network. Verifying it is trivial. If the result is valid, the network creates a new block linked to that proof.
Because this is not just a four-digit number, finding it is computationally extremely demanding. In other words, it consumes an enormous amount of electricity. The miner is compensated for this effort with a reward in the form of newly mined bitcoins.
If a miner tried to cheat, they would burn a lot of electricity—at a significant financial cost—and still would not be entitled to any reward. After a block is closed, the competition starts again: miners search for the next proof so the next block can be created. This is how miners secure the network through Proof of Work. In that sense, Proof of Work is the real hero.