In distributed computing, the challenge of reaching agreement in a group that cannot exclude malicious agents from participating is called the Byzantine Agreement Problem. All cryptocurrency payment networks must include code that solves the Byzantine Agreement Problem.
All cryptocurrencies rely on a distributed network of equivalent nodes to cooperatively agree on the validity and ordering of transactions. MobileCoin has developed a high-performance, byzantine fault tolerant protocol for distributed agreement called the MobileCoin Consensus Protocol (MCP), based on the "federated byzantine agreement" described by David Mazieres.
The redacted transactions that are written to the public MobileCoin hide the links between buyers and sellers that are used in CryptoNote, but the complete transactions still need to be validated and checked for attempted double spending and counterfeiting.
Rather than agreeing on sets of transactions, validator nodes agree on the cryptographic hash of encrypted sets of transactions. This allows the consensus algorithm to operate independently of the MobileCoin Ledger protocol validation code so that the potential attack surface is minimized.
The MobileCoin Consensus Protocol solves the Byzantine Agreement Problem by requiring each validator node to specify a set of peers that they trust, called a quorum. Quorums are based on the real-life trust relationships between individuals, businesses, and other organizations that compose the MobileCoin Network. Each node operator independently controls their own quorom configuration of trusted set of peers. Sensitive data, even in an encrypted form, is never shared beyond the web of trust defined by these quorums.
There is no central authority in the MobileCoin Network. Users accept statements about the blockchain ledger when their quorum convinces them that these statements are true. While the algorithmic design of MCP is based on the Stellar Consensus Protocol, the MobileCoin Network is not interoperable with the Stellar payment network.
The MobileCoin Consensus Protocol avoids the environmentally-damaging mathematical “work” required by Proof-of-Work (PoW) consensus protocols like Bitcoin and realizes a much higher transaction rate than the Bitcoin consensus protocol. In contrast to Proof-of-Stake (PoS) consensus protocols, practical control of governance in MCP is ceded to the users who are trusted the most by the extended MobileCoin community, rather than to the wealthiest users who control the largest financial stakes.
MCP ensures that all operators agree on the sequence of valid payments that are completed. New transactions are grouped in blocks and published approximately once every five seconds to the MobileCoin Ledger.