How blockchain consensus verify the transaction?

Question

So many blockchain documentation tell that the blockchain uses the consensus to verify transactions. But what I understand the consensus only generate the hash to create the new block. I don't know why the documentation says that the consensus verifies the transaction while the transaction has been created (made) before the consensus run for creating the new hash for new block. The consensus flow does not care about the input (group of transactions), it doesn't know the transactions group are valid or not. Why the blockchain documentation say that?

Answer 1

Before getting into details, I'd like to set some context.

First, what is blockchain - blockchain is a set of blocks where every next block depends on a pervious one. And we can extend the chain as long as every new block is correct from system's point of view.

An example of a block chain (starting from a special, genesis, block): A->B->C->D

Every block, other than A, depends on previous one - usually this is based on hashes and some other rules; but a blockchain creator may pick any set of rules.

Second, we need to agree on what is a consensus. In a blockchain world, the consensus is a process to agree on the chain of block. It could be several chains, but the system will get to a consensus on which one is the right one.

Here is why this is important: let's say we have the chain from above with last block being D. In a distributed environment it is totally possible that more than one VALID block will be generated at the same time; and since the system is distributed, several new chains may emerge:

• A->B->C->D->E1
• A->B->C->D->E2

The consensus in blockchains allows the.network as a whole to agree which of this chains is a valid one. Two important properties of a consensus:

• it is eventual, it will take a while before every node gets to the same page; which is the same as: if you will ask at the same time different nodes about which chain is the correct one - you may get different answers; but eventually, the.network will agree on the same one
• there are many different ways how one can pick the right chain, eg in bitcoin, the system eventually agrees on a longest valid chain.

Now we can address the original question: "blockchain uses the consensus to verify transactions". Blockchain (distributed one) uses consensus to agree on a chain and it uses a set of rules to validate that every block is correct. Since every node runs a software with the same set of rules, nodes will make same decision on every block correctness. But in distributed blockchain case, more than one chain may emerge...as described above.

To verify transactions blockchain is using set of rules applied locally to either accept or reject new blocks.

The documentation you mentioned does not sound right to me. Here is an example of a doc: https://www.investopedia.com/terms/c/consensus-mechanism-cryptocurrency.asp - I really like their first take away point: "A consensus mechanism refers to any number of methodologies used to achieve agreement, trust, and security across a decentralized computer.network." - and, as I mentioned about - it is always worth asking - what is consensus about - in distributed blockchains, the consensus is about the chain itself.