The Tech Behind IOTA — Part 2 (Consensus)

The full article was originally published by Luka Stanisic on Medium. Read the full article here.

The Tech Behind IOTA — Part 2 (Consensus)

I’ve long thought how to structure these tech series. It’s hard to chose a technical level of proficiency that everyone can follow, because everyone comes from a different background.

If you’re new, take a look at the first article of the series to get a general idea how the Tangle works and how it’s different from a blockchain. (here)

Going further, I will use some technical terms, but you should be able to follow without any problems.

The idea of the consensus algorithm is to structure the Tangle in such a way that every observer can come to a conclusion what’s valid and what’s not, just by observing the Tangle. Once the Tangle is structured in such a way, nodes calculate finality locally.

The consensus can be broken down like this:

-A node receives a transaction;
-It checks locally to see if it’s valid;
-If the node thinks the transaction is valid, it appends it to its copy of the Tangle and broadcasts it to its neighbors;
-It includes it in its tip selection algorithm (those are tips(transactions) that the node likes);
-If a node detects a conflict (2 transactions trying to spend the same funds) it reports it;
-If a conflict is reported, nodes vote to resolve the conflict;
-At this point, the node either still thinks the transaction is valid or it knows that it’s a double spend;
-All nodes do this;
-They continue issuing transactions referencing the ones from the tip selection algorithm (those are transactions that they like);
-If a transaction is voted as invalid by FPC (explained below), the tip selection algorithm won’t select it;
-The node calculates locally how many nodes have referenced the transaction;
-When it reaches a certain threshold, it confirms it as final and irreversible;
-This is done for all transactions.

Read the full Article

The full article was originally published by Luka Stanisic on Medium, where people are continuing the conversation by highlighting and responding to this story.

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