Define “Nakamoto Consensus.”
Nakamoto Consensus is the name given to the set of rules and mechanisms that allow a decentralized network (like Bitcoin) to agree on a single, canonical order of transactions and prevent double-spending. It combines Proof-of-Work (PoW) for block creation and the "longest chain rule" for conflict resolution, ensuring a probabilistic finality to the ledger.
Glossar
Canonical Order
Definition ⎊ Canonical order refers to the standardized, deterministic sequence in which transactions are processed and recorded within a blockchain network.
Block Creation
Genesis ⎊ Block creation, within cryptocurrency systems, represents the initial block of a blockchain, hardcoded into the software protocol and serving as the foundational element for all subsequent blocks.
Longest Chain Rule
Consensus Rule ⎊ Longest Chain Rule is the fundamental protocol mechanism dictating that in the event of a temporary fork, the chain exhibiting the greatest cumulative proof of work or stake is recognized as the canonical and valid history, thus finalizing transactions.
Probabilistic Finality
Certainty ⎊ Probabilistic finality within cryptocurrency and derivatives represents a quantified assessment of settlement irreversibility, diverging from traditional absolute finality models.