The Byzantine Generals Problem is a classic computer science dilemma that describes the difficulty decentralized parties have in reaching a consensus without a central authority. The agreement on which transactions are valid and that the of the network (individual balance) is the fundamental problem that Bitcoin’s Proof-of-Work algorithm was designed to solve.
The biggest challenge to decentralized networks may also be the least understood. How do you reach an agreement when you can’t trust the communications you receive from others? This quandary is called the Byzantine Generals Problem, and while it predates the first blockchain, it is the reason cryptocurrency exists today.
Why Is It Called the Byzantine Generals Problem? #
First coined in a 1982 research paper, the term offers a colorful way to describe a complex coordination challenge.
Imagine several divisions of the Byzantine army camped outside an enemy city. Each division is commanded by its own general. The generals can only communicate with each other via messengers. To succeed, the generals must decide on a common plan of action: they must all attack at the same time or all retreat. A partial attack would result in a resounding defeat.
The problem arises because one or more of the generals may be a traitor. These traitors might send conflicting messages to different generals to prevent them from reaching a consensus .
Mathematically, the loyal generals can only guarantee a correct decision if more than two-thirds of the participants are honest. The challenge is to find an algorithm that ensures the loyal generals reach an agreement despite the presence of bad actors.
Applying the Concept to Blockchain #
In a blockchain context, simply replace the “generals” with nodes . In a decentralized network, there is no “General-in-Chief” to dictate the truth. Instead, the network must move ahead only when there is agreement that a block’s validity has been proven mathematically.
While the classic solution to the Byzantine Generals Problem (often referred to as Practical Byzantine Fault Tolerance or pBFT) requires that more than 2/3 (strictly $> 66.6\%$) of the participants be honest to reach a consensus, Bitcoin uses a different approach that lowers this threshold to > 1/2 (strictly $> 50\%$).
This difference exists because Bitcoin and classic BFT systems solve the problem in fundamentally different ways.
Comparison of Consensus Thresholds #
| Feature | Classic BFT (pBFT) | Bitcoin (Nakamoto Consensus) |
|---|---|---|
| Consensus Threshold | > 2/3 Honest Nodes | > 1/2 Honest Hash Power |
| Fault Tolerance | Can tolerate up to 1/3 malicious nodes. | Can tolerate up to 1/2 malicious hashing power. |
| Network Type | Closed/Permissioned (known participants). | Open/Permissionless (anyone can join). |
| Primary Mechanism | Multi-round voting and communication. | Proof-of-Work (PoW) and the “Longest Chain Rule.” |
| Finality | Instant/Deterministic: Once 2/3 agree, it’s final. | Probabilistic: The more blocks added, the more final it becomes. |
Bitcoin solves this by replacing blind trust with Proof-of-Work . For a new block to be added to the ledger , a miner must expend significant computational energy to solve a puzzle. This “cost to play” disincentivizes fraud; if a node broadcasts invalid information, the thousands of other validators on the network simply ignore it.
In centralized networks, consensus isn’t a problem at all. Instead, a central authority dictates which transactions are valid—a structure that introduces risks like censorship, debasement, and confiscation. Decentralized blockchains solve the censorship issue first, then use a consensus mechanism to solve the Byzantine Generals Problem.
Byzantine Fault Tolerance (BFT) #
A system that can reach an agreement even if some of its components fail or act maliciously is said to have Byzantine Fault Tolerance (BFT).
- In Centralized Systems: BFT isn’t an issue because a central authority (like a bank) dictates the state of the ledger.
- In Decentralized Systems: BFT is mandatory. While traditional BFT required nodes to vote directly (which doesn’t scale well), Bitcoin introduced “Nakamoto Consensus.” By using Proof-of-Work, Bitcoin allows thousands of anonymous nodes to reach agreement without the massive communication overhead of a manual vote.
