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The 4 Security Keys of ETC: Full Replication, Proof of Work, Verification, the Coordination Problem

Donald McIntyre

You can listen to or watch this video here:


People usually think of “security” in a blockchain as Ethereum Classic (ETC) as the mining hashrate, the proof of work (POW) consensus mechanism, or the strength of cryptography.

These things are true, but we thought a more complete list of the higher level security components should be laid out and explained.

In this post we will talk about what is the meaning of security in the first place, and then explain the four keys to ETC’s safety which are:

  • Full replication
  • Proof of work
  • The function of verification
  • The coordination problem

What Do We Mean By Security in the First Place?

In our post “What Does Security Mean in Ethereum Classic?” we wrote the following:

“So, the meaning of security in Ethereum Classic will be this: It will be a refuge for those escaping centralization on a global scale, arbitrary confiscation, persecution, and tyranny.”

“Security” in this context does not mean avoiding natural events, wild animals, or burglars. It means to avoid the risks of the trusted third parties we have been relying upon for hundreds of years.

These trusted third parties are banks, central banks, governments, corporations, and technology companies amongst many others.

In essence, then, security in ETC means trust minimization, which is to depend the least possible on these trusted entities.

And, if trust minimization is the goal, then ETC must be as decentralized as possible!

What Is Full Replication?

The object of the Cypherpunks’ focus during the nineties and early two thousands was how to achieve a peer-to-peer network with as little trust as possible in any central administrator.

The main problem of computer science with regard to networks at the time was that they had a seemingly insurmountable problem which was called the “Byzantine Generals Problem”. That was that with 1/3 of the nodes in the network attackers could corrupt it.

However, Cypherpunks had established that, in theory, a fully replicated property titles design could be the base for a monetary system that could be programmable such as is today Ethereum Classic.

When Bitcoin was launched in 2009, the vision of this fully replicated database of property titles had been finally achieved.

Full replication in ETC, which follows the security model of Bitcoin, means that all the accounts, balances, and smart contracts in the system are identically replicated in all participating computers in the system.

What Is Proof of Work?

However, what took them so long to crack the puzzle of this fully replicated property titles network was that they didn’t have a safe consensus mechanism to make all computers around the world; owned by complete strangers in different continents, nations, cultures, and languages; share the information to be totally synchronized with regard to the accounts, balances, and smart contracts of the database.

The solution was the proof of work consensus mechanism, also known as Nakamoto Consensus, which finally provided a signaling system between the nodes so that they could be totally coordinated with the exact same copy of the database every ten minutes in the case of Bitcoin, or every thirteen seconds in the case of ETC, with a higher fault tolerance than before.

Proof of work seals each new block in the network with a cryptographic stamp that serves as all the information that computers in the system need to know which is the correct block in each round.

This was the amazing invention by Satoshi Nakamoto!

What Is Verification?

However, Bitcoin and ETC are more complex than just replicating information. They are ledgers with accounts and balances (and smart contracts in the case of ETC) that constantly receive new transactions to move money from one place to another.

Not only this, but the miners that do the proof of work actually get paid in these cryptocurrencies for their contribution. So, the question was, who will supervise the work of miners and make sure that they stay honest?

The answer to this was the role of the rest of the nodes in the network that were not miners. These computers are called full nodes, economic nodes, or just “nodes” for simplicity.

What they do is actually receive and verify all the blocks built by miners, including each transaction in the blocks, to make sure that a) the blocks are properly built doing a lot of work, and b) that each transaction included is correct and legitimate.

This function of verification establishes a division of power that keeps the network balanced and the miners in check.

What Is The Coordination Problem?

Once the components explained above are in place in a system as ETC, what could go wrong?

Well, people could go crazy and start changing the rules of the system!

This means that there is no ruleset in computer networks that cannot be changed. If all the owners of a peer-to-peer blockchain such a Bitcoin or ETC decide to agree on a nefarious change, such as increasing the supply of their coins for example, then they could actually do it.

But here is where a lot of people fail to see the full implications of going through such an effort.

The truth is that, once a blockchain is truly decentralized, this means that strangers around the worlds are participating in it with their computers. As we wrote above, these strangers live in different countries and continents, speak different languages, and have different cultural beliefs and religions. It would be extremely difficult to make thousands of participants in Bitcoin or ETC to implement egregious changes that would damage the value of the system and go against their own interests.

This difficulty is called “the coordination problem”.

And, something that makes the coordination problem even stronger is that any group of nodes in these systems may split from the network whenever they wish. This potential loss of liquidity strongly deters the introduction of bad changes to these systems.

The Benefit of the 4 Securities Keys in ETC

Full replication in ETC ensures the decentralization of the information in a way that makes it very difficult to tamper with. This model not only protects the system from aggressors and dishonest trusted third parties, but also against natural disasters and even nuclear war!

Proof of work in ETC ensures that all participants in the network can be synchronized, with the exact same state of the information, every thirteen seconds in a fully decentralized manner.

Verification of the blocks and transactions in ETC makes sure that the work of the proof of work miners is correct and puts a check on their power so that they cannot abuse the system.

The coordination problem in Ethereum Classic solves the potential change of rules to the worse as it is extremely difficult to get all participants in the world to agree on changes that would go against their own interests. This is enhanced by the fact that in blockchains such as ETC and Bitcoin, any group of participants can split and form their networks whenever they want.

Thank you for reading this article!

To learn more about ETC please go to: https://ethereumclassic.org

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