What is Fraud Proof?

In this post “What is Fraud Proof?”, you’d learn about fraud proof in blockchain platform using Optimistic Rollups (ORs). This post will also cover state transition, fraud proof advantage, and many more.

What Is Fraud Proof?

Fraud is classified as wrongdoing conducted with the intent of getting an upper hand by stripping the subject of a privilege. Tax evasion, financial crimes, bank fraud, and a variety of other types of fraud are just a few instances. A mere individual, a bunch of users, or an entire corporation may engage in deceptive practices.

Fraud Proof in Blockchain Platform

In the field of blockchain technology, the word fraud proofs refers to a technological mechanism for assuring that on-chain data is accessible and accurate. This is while permitting on-chain scalability (for instance, via sharding or bigger blocks), Optimistic Rollups (ORs) are used in fraud proofs and satisfy two purposes. They minimize expenses and delay for decentralized apps on a blockchain platform.

A sequencer needed to process ORs must present a fraud-proof alongside their job to be rewarded for excellent behavior. Sequencers are rewarded monetarily for following the consensus guidelines while performing rollups, and they are punished financially if they violate them by losing their fraudulent evidence.

State Transition Fraud Proofs

State transition proof of fraud are effective, but they are predicated on the premise that full block data is accessible. If a block miner just releases the block header alone without right facts, it is hard to prove that it is inaccurate.
Moreover, even if 99 percent of the data is provided. We may need the leftover 1% to check the correctness of a block since we demand total data availability. Data may be unavailable for a number of reasons, not only malicious nodes, necessitating stringent block validation. The right answer is to make data unavailability harder for a rogue node.

Proof of Fraud and erasure codes are required for establishing public blockchain platforms. They enable light nodes to choose which blocks to discard without having to depend on a large number of reliable full nodes.
However if short lived zero-knowledge proofs could be used to verify accurateness. An intruder getting away with promoting unreachable blocks and having them added to the original chain is still a major issue. Since it limits all other validators from completely calculating the state. Or creating blocks that interact with the part of the state that is no longer viable. A state transition was done wrongly, according to fraud proofs.

Fraud Proof Advantage

The main advantage is that they are only needed when disaster strikes. Rather than for every state change. As a consequence, they use less computer requirements and are ideally equipped to environments with limited scalability. The involvement of these protocols is their major flaw: they create a ‘conversation’ between a large number of people. A discourse, engagement, or conversation requires the attendance of all participants. Notably the person claiming fraud, and allows other participants to interrupt the discussion in a range of methods.

Finally, here is a list of more related topics you might be interested in:
  1. Blockchain Technology
  2. Defi
  3. NFTs
  4. DAOs
  5. Crypto
  6. Web 3.0
  7. Altcoin Tokenomics
  8. Metaverse
  9. Smart Contracts

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