The Byzantine Generals Problem describes the challenge of achieving consensus without a trusted central authority. At the core, economists view this issue as a game-theory problem of how members of a group can collectively agree on a subject matter.
For example, picture an army of soldiers surrounding the Byzantine Empire. These soldiers are ready to attack, but the generals must first decide on a common plan of action. If all generals attack at the same time, victory is guaranteed. But if they attack at different times, then the battle is lost.
These generals have no secure communication channels amongst themselves; the enemy could intercept or tamper with any messages. This begs the question: What can they do to ensure all generals attack at the same time?
This issue was first conceptualised by the SRI International Research Institute in 1982. According to the researchers, a system that can avoid failure is demonstrated to be possible, but with the condition that at least two-thirds of the generals must be loyal.
The Byzantine Generals Problem is a highly relevant issue for cryptocurrencies, as they are a distributed computer system without a central authority. Like the generals trying to reach a consensus, these computers, also known as nodes, have the job of achieving consensus on the transactions.
In the case of a blockchain, the first to propose a solution to this issue was Bitcoin through the Proof of Work (PoW) consensus mechanism. Other forms of consensus mechanisms include Proof of Stake (PoS), Proof of Burn (PoB), and Proof of Authority (PoA). These mechanisms make a network Byzantine Fault Tolerant (BFT).
