<blockquote>
  <p>how could it be that there are no collisions ?</p>
</blockquote>

<p>There are.</p>

<blockquote>
  <p>I wonder how effective this process is ?</p>
</blockquote>

<p>Very ineffective. ~$10 natural cost for securing one transaction :)</p>

CC BY-SA 3.0
2017-09-27T08:46:28.977Z
so why everybody uses blockchain. Isn't it possible to use paxos + proof of work + verification of the work ? Efficiency would be much better. Why blockchain is so massively used, it is the worst algorithm I have seen.
Nulik
CC BY-SA 3.0
2017-09-27T08:53:10.747Z
ups, found an answer to the comment above:
https://www.quora.com/Why-would-you-use-blockchain-over-a-distributed-consensus-protocol-like-Paxos-or-Raft
Nulik
CC BY-SA 3.0
2017-09-27T08:53:36.727Z
Two main factors are scalability and presence byzantine faults. Much effort has been put into making Paxos and its many variants scale, but the truth is it could never scale to the size of a blockchain based consensus, not in the Internet, at least. As for byzantine failures, the Paxos versions that supports it scale even less.
Nulik
CC BY-SA 3.0
2017-09-27T09:07:04.043Z
>>> Why blockchain is so massively used <<< People do strange things. Blockchain is not "used" today. Everything bitcoin-related is pyramid-scheme bubbles
amaclin
CC BY-SA 3.0
2017-09-27T09:15:12.367Z
while it has speculative money in the price it is not a pyramid-scheme because some useful work is done. The problem of course is with the true value of this work, but don't worry, markets are rational and will correct themselves, and they usually do it with a lag.
Nulik
CC BY-SA 3.0
2017-09-27T09:21:11.457Z
It can not be "useful work" for $10 per transaction because we have much more effective ways to do such work. Okay, show me the "useful work" :)
amaclin
CC BY-SA 3.0
2017-09-27T10:35:50.380Z
you mean a `distributed ledger without the problem of double spending and centralization` ? I would like to see this technology. AFAIK there is no such thing. That's why everyone uses blockchain. Because otherwise you have to have centralized authority, which is nobody wants. You are seeing $10 in transaction but you are forgetting 3% inflation every year and the cost of bank rescue which increases country's debt. Such things would be 0 with cryptocurrencies.
Nulik
CC BY-SA 3.0
2017-09-27T10:35:54.770Z
For example, if you earn 100K per year, you are wasting $3,000 money because of inflation. If you divide this by 365 you will get 8.91 per day, without even using banking services. Include the debt and you will be shocked. So. ... $10 per transaction is not expensive.
Nulik
CC BY-SA 3.0
2017-09-27T10:37:25.707Z
with multiple inputs and multiple outputs you can write a single transaction to pay for all your bills once in a month.
Nulik
CC BY-SA 3.0
2017-09-27T10:39:46.303Z
also, where did you get that number $10 per transaction, it is very strange that this is the real cost, too expensive. how can you spend $10 on one transaction
Nulik
CC BY-SA 3.0
2017-09-27T11:31:47.340Z
>>> where did you get that number $10 per transaction <<< Take the hashrate here: https://bitcoinwisdom.com/bitcoin/difficulty ~7000000000 GH/s, calculate how many asics are working, take the sum of electricity spent per day and divide by the number of daily transactions
amaclin
CC BY-SA 3.0
2017-09-30T21:45:39.780Z
@amaclin: If you believe Bitcoin is a pyramid scheme, why are you active on bitcoin.se?
Meni Rosenfeld
CC BY-SA 3.0
2017-10-02T04:34:13.003Z
@MeniRosenfeld because I'm not a coward like Satoshi Nakamoto
amaclin
CC BY-SA 3.0
2017-09-27T08:19:06.507Z
2017-09-27T08:19:06.507Z
amaclin
<p>Every miner tries to mine a <em>different</em> block. One reason is that the reward payment address (which pays the miner for their work) is naturally different for each miner. Therefore, no two miners are competing to mine the same block.</p>

<p>Similarly, each individual miner changes other things in blocks to make sure that each of their mining rigs is not duplicating work too.</p>

CC BY-SA 3.0
2017-09-28T05:57:54.457Z
I am sorry, my last sentence was unclear, I was referring to the fact that all of them are trying to produce the next block all at once. But you are making a good point.
Nulik
CC BY-SA 3.0
2017-09-27T19:28:00.203Z
2017-09-27T19:28:00.203Z
Greg Hewgill
<p>Your understanding of the way blocks are assigned is incorrect.  There is no guarantee (initially) that all nodes will unilaterally agree on the same next block to be added to the chain.  Dispute situations are relatively common, and stem from multiple miners solving the next block close enough to simultaneously in order for some nodes to receive one candidate for the next block from one of the miners, and other nodes to receive a different suggestion.</p>

<p>The longest chain solution solves this dilemma by reverting the entire chain to the suggested block + any further blocks added, once one of the disputing chains has been mined at a faster rate than the other and so becomes longer.</p>

<p>So there are “collisions”, however the system inherently deals with these situations algorithmically.</p>

<p>How effective this system is.. well in 9 years there hasn’t been an instance of system failure, because of this potential threat, or any other.  The mathematical security built into blockchain as a whole is far superior to any previous digital currency conceptions, which all had issues with one or more of these potential threats which they could not solve.  Blockchain is a highly complete solution, not just to trustless decentralised value transfer, but to many other applications which are only really possible because of a few key securing features, such as the longest chain concept, digital signing etc</p>

CC BY-SA 3.0
2017-10-02T20:47:05.780Z
2017-10-02T20:55:15.017Z
2017-10-02T20:55:15.017Z
DanielSon
<p>I found a study about inefficiency of blockchain here</p>

<p><a href="https://www.p2pfisy.com/wp-content/uploads/2017/05/Pappalardo_p.pdf" rel="nofollow noreferrer">https://www.p2pfisy.com/wp-content/uploads/2017/05/Pappalardo_p.pdf</a></p>

<p>Blockchain Inefficiency
The Bitcoin Peers Network
Giuseppe Pappalardo 1
,
2 Guido Caldarelli 2 Tomaso Aste1
1University College London</p>

CC BY-SA 3.0
2017-09-27T09:12:53.473Z
2017-09-27T09:12:53.473Z
Nulik
<p>The blockchain algorithm is not intended to be efficient. It's intended to be secure and immutable.</p>

CC BY-SA 3.0
2017-09-27T16:15:05.223Z
immutable is not free. it exists only while you are paying the natural costs
amaclin
CC BY-SA 3.0
2017-09-27T16:17:42.243Z
Yes. That's my point. If you want billions of fast transactions use Visa.
erols
CC BY-SA 3.0
2017-09-27T14:40:35.213Z
2017-09-27T14:40:35.213Z
erols
<p>Bitcoin blocks average one per 10 minutes. A block takes a few (let's say 10) seconds to propagate in the network, and then miners are working on the new block. So this leaves you with about 1/60 chance each time that a miner will find a block that gets orphaned.</p>

<p>This also means that 1.7% of the hashrate gets wasted, but that's pretty insignificant.</p>

<p>The way these orphan blocks are handled are the heart of Bitcoin's innovation. The "Longest Chain" rule is its defining feature - it seems from your question that you are not aware of it, which suggests you do not understand the protocol.</p>

<p>Anyway, if we try to shorten the time between blocks, orphaning becomes a more significant problem. That's why Aviv Zohar et al have been working on alternative protocols which are immune to this problem, GHOST and now SPECTRE.</p>

CC BY-SA 3.0
2017-09-30T21:44:15.920Z
2017-09-30T21:44:15.920Z
Meni Rosenfeld
<p>I am studying the algorithm of Bitcoin and I don't understand one thing. If all miners are mining the next block at the same time, and there are thousands of nodes, how could it be that there are no collisions (two blocks found at the same time)? I wonder how effective this process is? As I understood the algorithm, the mining must be sequential (with order), and this can only be done if all miners mine the next block at the same time, because hash of the previous block must go within the next block. But if they mine it at the same time, there must be a lot of collisions. However I can't find anything about collisions or low effectiveness of this blockchain algorithm. </p>

<blockchain><mining-theory>
How effective is the blockchain algorithm?
Nulik
# How effective is the blockchain algorithm?

(Asked by: username_0 on 2017-09-27)

I am studying the algorithm of Bitcoin and I don't understand one thing. If all miners are mining the next block at the same time, and there are thousands of nodes, how could it be that there are no collisions (two blocks found at the same time)? I wonder how effective this process is? As I understood the algorithm, the mining must be sequential (with order), and this can only be done if all miners mine the next block at the same time, because hash of the previous block must go within the next block. But if they mine it at the same time, there must be a lot of collisions. However I can't find anything about collisions or low effectiveness of this blockchain algorithm.

**Tags:** blockchain, mining-theory


---

## 6 answers

### Answer by username_1 on 2017-09-27. Score: 2 | Accepted answer

> how could it be that there are no collisions ?

There are.

> I wonder how effective this process is ?

Very ineffective. ~$10 natural cost for securing one transaction :)

> **Comments:**
> **username_0**: so why everybody uses blockchain. Isn't it possible to use paxos + proof of work + verification of the work ? Efficiency would be much better. Why blockchain is so massively used, it is the worst algorithm I have seen.  
> **username_0**: ups, found an answer to the comment above: https://www.quora.com/Why-would-you-use-blockchain-over-a-distributed-consensus-protocol-like-Paxos-or-Raft  
> **username_0**: Two main factors are scalability and presence byzantine faults. Much effort has been put into making Paxos and its many variants scale, but the truth is it could never scale to the size of a blockchain based consensus, not in the Internet, at least. As for byzantine failures, the Paxos versions that supports it scale even less.  
> **username_1**: >>> Why blockchain is so massively used <<< People do strange things. Blockchain is not "used" today. Everything bitcoin-related is pyramid-scheme bubbles  
> **username_0**: while it has speculative money in the price it is not a pyramid-scheme because some useful work is done. The problem of course is with the true value of this work, but don't worry, markets are rational and will correct themselves, and they usually do it with a lag.  
> **username_1**: It can not be "useful work" for $10 per transaction because we have much more effective ways to do such work. Okay, show me the "useful work" :)  
> **username_0**: you mean a `distributed ledger without the problem of double spending and centralization` ? I would like to see this technology. AFAIK there is no such thing. That's why everyone uses blockchain. Because otherwise you have to have centralized authority, which is nobody wants. You are seeing $10 in transaction but you are forgetting 3% inflation every year and the cost of bank rescue which increases country's debt. Such things would be 0 with cryptocurrencies.  
> **username_0**: For example, if you earn 100K per year, you are wasting $3,000 money because of inflation. If you divide this by 365 you will get 8.91 per day, without even using banking services. Include the debt and you will be shocked. So. ... $10 per transaction is not expensive.  
> **username_0**: with multiple inputs and multiple outputs you can write a single transaction to pay for all your bills once in a month.  
> **username_0**: also, where did you get that number $10 per transaction, it is very strange that this is the real cost, too expensive. how can you spend $10 on one transaction  
> **username_1**: >>> where did you get that number $10 per transaction <<< Take the hashrate here: https://bitcoinwisdom.com/bitcoin/difficulty ~7000000000 GH/s, calculate how many asics are working, take the sum of electricity spent per day and divide by the number of daily transactions  
> **username_2**: @username_1: If you believe Bitcoin is a pyramid scheme, why are you active on bitcoin.se?  
> **username_1**: @username_2 because I'm not a coward like Satoshi Nakamoto  

---

### Answer by username_3 on 2017-09-27. Score: 1

Every miner tries to mine a *different* block. One reason is that the reward payment address (which pays the miner for their work) is naturally different for each miner. Therefore, no two miners are competing to mine the same block.

Similarly, each individual miner changes other things in blocks to make sure that each of their mining rigs is not duplicating work too.

> **Comments:**
> **username_0**: I am sorry, my last sentence was unclear, I was referring to the fact that all of them are trying to produce the next block all at once. But you are making a good point.  

---

### Answer by username_4 on 2017-10-02. Score: 0

Your understanding of the way blocks are assigned is incorrect. There is no guarantee (initially) that all nodes will unilaterally agree on the same next block to be added to the chain. Dispute situations are relatively common, and stem from multiple miners solving the next block close enough to simultaneously in order for some nodes to receive one candidate for the next block from one of the miners, and other nodes to receive a different suggestion.

The longest chain solution solves this dilemma by reverting the entire chain to the suggested block + any further blocks added, once one of the disputing chains has been mined at a faster rate than the other and so becomes longer.

So there are “collisions”, however the system inherently deals with these situations algorithmically.

How effective this system is.. well in 9 years there hasn’t been an instance of system failure, because of this potential threat, or any other. The mathematical security built into blockchain as a whole is far superior to any previous digital currency conceptions, which all had issues with one or more of these potential threats which they could not solve. Blockchain is a highly complete solution, not just to trustless decentralised value transfer, but to many other applications which are only really possible because of a few key securing features, such as the longest chain concept, digital signing etc


---

### Answer by username_0 on 2017-09-27. Score: 0

I found a study about inefficiency of blockchain here

<https://www.p2pfisy.com/wp-content/uploads/2017/05/Pappalardo_p.pdf>

Blockchain Inefficiency
The Bitcoin Peers Network
Giuseppe Pappalardo 1
,
2 Guido Caldarelli 2 Tomaso Aste1
1University College London


---

### Answer by username_5 on 2017-09-27. Score: 0

The blockchain algorithm is not intended to be efficient. It's intended to be secure and immutable.

> **Comments:**
> **username_1**: immutable is not free. it exists only while you are paying the natural costs  
> **username_5**: Yes. That's my point. If you want billions of fast transactions use Visa.  

---

### Answer by username_2 on 2017-09-30. Score: 0

Bitcoin blocks average one per 10 minutes. A block takes a few (let's say 10) seconds to propagate in the network, and then miners are working on the new block. So this leaves you with about 1/60 chance each time that a miner will find a block that gets orphaned.

This also means that 1.7% of the hashrate gets wasted, but that's pretty insignificant.

The way these orphan blocks are handled are the heart of Bitcoin's innovation. The "Longest Chain" rule is its defining feature - it seems from your question that you are not aware of it, which suggests you do not understand the protocol.

Anyway, if we try to shorten the time between blocks, orphaning becomes a more significant problem. That's why Aviv Zohar et al have been working on alternative protocols which are immune to this problem, GHOST and now SPECTRE.


---

