Sharkproof Consensus Algorithm: Tenderbake Explained

Sharkproof Consensus Algorithm: Tenderbake Explained

On November 4th, Nomadic Labs devs added records on Tenderbake, a new consensus algorithm, to the main thread of Tezos Gitlab. Right now, they are testing it on Idiazabalnet. The update features speeded-up finalisation, enhanced security, and a lowered baking threshold.

In this feature, we explain why Tezos needs a new consensus algorithm, why Tenderbake is better than Emmy* used today, and how it will affect baking. All in layman terms and with a nice addition of sharks gnawing at optic fibre on the bottom of the Atlantic. If you are interested in a more technical approach, we suggest you watch the Nomadic Labs seminar or take a closer look at Tezos Gitlab.

Why Change the Consensus Algorithm?

Transaction finalisation rate is among the most important metrics of reliability in decentralised networks. It is the time/number of blocks after which one can be sure the included transaction can no longer be erased or edited. In Bitcoin, a transaction is final after six blocks, in Tron, after twenty. Note that the transaction is considered final but not necessarily is. The thing is that a blockchain always incorporates the longest chain of blocks, and there is a chance of a longer one that would replace the earlier one. Here’s how it can happen:

  1. The last block on a blockchain is N0.
  2. Alice is in the US. She sends a transaction and a local miner includes it in the X1 block based on N0 and then adds it to the blockchain.
  3. A shark in the Atlantic bites the cable connecting the US to Europe and causes a signal delay.
  4. The info on finding the block X1 is not in Europe yet. Meanwhile, a miner in France creates the block Y1 based on N0 that doesn’t contain Alice’s transaction.
  5. Miners start creating blocks based on X1 and Y1 depending on which block they got earlier.
  6. If miners create Y1-based blocks faster, a few blocks the network will abandon the entire X1-based chain. Alice’s transaction will disappear from the blockchain forever.

The chances of a shark-caused transaction cancellation are very small but never null. That is why Tezos protocol devs want to abandon the probabilistic algorithm, which is Emmy*, and replace it with the deterministic Tenderbake that guarantees to include transactions in the blockchain.

How Tenderbake Is Better Than Emmy*

Tenderbake’s top advantage is the deterministic approach. Transactions are final and can’t disappear. Backers can’t create several chains based on N0 and then abandon some transactions. It is guaranteed by a different block-creation approach during the asynchronous period when bakers can’t sync their actions. In Bitcoin and other Nakamoto-style consensus networks, miners keep working during the asynchronous period, which causes unintended forks.

Tenderbake assumes that the period ends sooner or later: a hacker will stop the DDoS attack, a CSP will reboot the equipment, and a shark will find better things to do. As the period of asynchronicity will inevitably end, all you have to do is wait. So, when bakers notice desynchronisation with the network, they just stop creating new blocks. Using the BFT algorithm implies that having two-thirds of nodes synchronised is enough. Therefore, a slow connection between America and Europe won’t pause the entire network as long as nodes in Europe and Asia communicate at a normal speed.

As a result, a blockchain with Tenderbake will always have only one chain based on the last created block. Guaranteed finalisation of transactions will only require one block N1 based on N0.

How Tenderbake Will Influence Baking

The Tezos network will be able to lower the baking threshold from 8,000 to 6,000 tez as proposed by Nomadic Labs, or even more. One won’t have to wait until the fork probability is null. Bakers will get rewards right after signing or confirming a block instead of 5 cycles (12-13 days) later.

Finally, the network will penalise inactive bakers who hurt synchronisation and the BFT consensus. In order to get a reward for block confirmation, a node will have to confirm over 50% of its slots, which would incentivise bakers to update their equipment and look after its operation.

This will make Tezos transactions faster and more reliable.

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