Courtroom Insights on Consensus Mechanisms and Blockchain-Powered Transactions

SEC v. Binance Court Filing, retrieved on June 5, 2023 is part of . You can jump to any part in this filing . This is part 12 of 69. HackerNoon’s Legal PDF Series here BACKGROUND II. BACKGROUND ON CRYPTO ASSETS AND CRYPTO TRADING PLATFORMS B. Consensus Mechanisms and Validation of Transactions on a Blockchain 66. Blockchains typically employ a “consensus” mechanism that, among other things, aims to achieve agreement among users to a data value or on the state of the ledger. 67. A consensus mechanism describes the particular protocol used by a blockchain to agree on, among other things, which ledger transactions are valid, when and how to update the blockchain, and potentially to compensate certain participants for validating transactions and adding new blocks. There can be multiple sources for compensation under the terms of the blockchain protocol, including from fees charged to those transacting on the blockchain, or through the creation or “minting” of additional amounts of the blockchain’s native crypto asset. 68. “Proof of work” and “proof of stake” are the two major consensus mechanisms used by blockchains. Proof of work, the mechanism used by the Bitcoin blockchain, involves computers, known as “validator nodes,” attempting to “mine” a “block” of transactions, in part by solving a complex mathematical problem. The first miner to successfully solve the problem earns the right to update the blockchain and is rewarded with the blockchain’s native crypto asset. Proof of stake, the consensus mechanism currently used by the Ethereum blockchain, involves the blockchain protocol selecting block validators from crypto asset holders who have committed or “staked” a minimum number of crypto assets as part of the validation process. Continue Reading . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case 1:23-cv-01599 retrieved on September 6, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. docdroid.net

Courtroom Insights on Consensus Mechanisms and Blockchain-Powered Transactions

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