Why do nodes trust other nodes to approve their transactions?

Question

I know that the blockchain technology works so well, because everybody has basically a copy of the last ledger.

Therefore, if a transaction happens, everybody inside the network has to "approve" the transaction to do it.

These other participants are then seen as trusted sources.

However, what makes them into trusted sources? Let's say there are only three participants, two make a transaction and one has to decide if the transaction is acceptable or not (does the clearing). What makes him a trusted source?

Are these thoughts right or where am I wrong?

I appreciate your replies!

Answer 1

I know that the blockchain technologie works so well, because everybody has basically a copy of the last ledger.

Yes, every full bitcoin node has a copy of the blockchain (aka ledger).

Therefore, if a transaction happens, everybody inside the network has to "approve" the transaction to do it.

Correct, every transaction is propagated to all bitcoin nodes and it is validated by each one of them. Some of those nodes also do mining and they will include this transaction to a block. If they mine the block successfully (before any others mine their blocks successfully) they propagate their block to all the other bitcoin nodes which validate the block and all the transactions within. Thus, transactions are validated a second time.

These other participants are then seen as trusted sources.

However, what makes them to trusted sources. Let`s say there are only three participants, two make a transaction and one has to decide if the transaction is ok or not(does the clearing). What makes him a trusted source?

No one is considered a trusted source. Bitcoin enables trustless transactions. If we have 1000 bitcoin nodes in the network and user A makes a transaction that sends some coins to user B all 1000 bitcoin nodes will validate the transaction. Then, when the mined block is propagated all 1000 nodes will validate it again. Note, that users A and B may or may not run a full bitcoin node themselves.

Hopefully, that clarifies things a bit.

Answer 2

everybody inside the network has to "approve" the transaction to do it.

I think "approve" is not the best choice of words. They only check whether a transaction is valid or not, no approval is necessary.

To explain with your example with three participants:

Alice, Bob, and Charlie each have a copy of the blockchain. Alice wants to send bitcoins to Bob.
Two conditions apply:

• Alice has to have sufficient bitcoins to fund the transaction.
• The transaction has to have a valid signature.

When Alice broadcasts her transaction, everyone (Alice, Bob and Charlie) can check whether the money is available, because the transaction specifies which coins are being spent.
Also, everyone can check whether the signature is valid because it can only be produced by the owner of said bitcoins. Each user by themselves will immediately dismiss a transaction if the signature is invalid or when there are insufficient funds.

Next, whenever anyone mines a block, it will include a set of valid transactions to confirm them. When found, the block is broadcasted to the network. Everyone checks that the block is valid and that it only contains valid transactions. Since everyone builds the database from the same blockchain, they all end up having the same state in the database, and therefore will be in agreement which balances are available for spending.

In other words, you can trust your own copy of the blockchain, because you checked every piece of it for validity. However, others may not. Yet, nobody else has to trust your copy of the blockchain, because you can send them the pieces so they can build their own and check the work themselves.

Answer 3

First of all you need to understand that the use of Bitcoin is not controlled by anyone at all, therefor there is no way to check the integrity of anyone using the Bitcoin technology. With that in mind one should always be cautious when making transactions. People who make a lot of transactions succesfully are considered trustworthy (technically) but there is always a chance this will change. It's actually the same as in real life, like when you mail-order something you rely on trust. The more people order from the same company the higher the trust will be but as with Bitcoin, that trust can be broken for many reasons. The time we live in is truly a sick period in mankind's history. So many people try to scam each other any which way they can including governments, banks etc. So in short : you can not trust anyone 100%, so forget about trust and be cautious when sending large amounts of bitcoins. If you need to make a big transaction to someone you don't know you should try and find some transaction history of that person. You could check the blockchain info for that persons transactions to get a more accurate estimate on how trustworthy that person might be. I hope this answer clarified your questions.