What’s So Different about Blockchain? — Blockchain is a Probabilistic State Machine

Abstract

Blockchain is a distributed timestamp server technology introduced for realization of Bitcoin, a digital cash system. It has been attracting much attention especially in the areas of financial and legal applications. But such applications would fail if they are designed without knowledge of the fundamental differences in blockchain from existing technology. We show that blockchain is a probabilistic state machine in which participants can never commit on decisions, we also show that this probabilistic nature is necessarily deduced from the condition where the number of participants remains unknown. This work provides useful abstractions to think about blockchain, and raises discussion for promoting the better use of the technology.