# Data Consensus Protocol

<figure><img src="https://3042747009-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaDUBtTPZKYj40o0zqoC8%2Fuploads%2FsA1tYhF5c5cfq8q4R9i7%2Fimage.png?alt=media&#x26;token=87f27624-1fb4-4702-98e9-be198d746eb5" alt=""><figcaption></figcaption></figure>

Most blockchains operate on a state machine model, and Bitcoin adheres to this framework as well, comprising three key elements:

1. **State (Sn)**: This represents the current state of the blockchain, such as account balances or the present state of smart contracts. In Bitcoin's case, it refers to the set of UTXOs (unspent transaction outputs).
2. **Transactions (Txs)** : The transactions are external inputs which trigger the State switch from current to the next. In Bitcoin's case, it refers to the new block data.
3. **State Transition Function f(x)**: This function describes how the blockchain’s state transitions from the current state to the next based on the new transactions. For Bitcoin, it encompasses all rules applied to UTXOs, such as the transfer rules.

exSat’s **Data Consensus Protocol** decentralizes and securely maps these three elements of Bitcoin onto the exSat network. This process includes:

1. **Storing Bitcoin's State Data**: Using exSat's RAM to fully store Bitcoin’s state ,which's the complete set of UTXO data.
2. **PoW + PoS for Block Updates**: [Synchronizers ](https://docs.exsat.network/guides-of-data-consensus/run-a-sychronizer)(mining pools) and [Validators ](https://docs.exsat.network/guides-of-data-consensus/run-a-btc-validator)upload and verify the latest Bitcoin blocks on exSat in a decentralized pattern.
3. **Transaction Parsing**: Each transaction from the uploaded Bitcoin blocks is parsed within exSat smart contract to update UTXO data. This parsing capability is also available to DApps, allowing them to filter their relevant Bitcoin transactions and build Bitcoin-based application databases directly on exSat.

<figure><img src="https://3042747009-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FaDUBtTPZKYj40o0zqoC8%2Fuploads%2F7gSaH6OkviyBxiGPQEAe%2Fimage.png?alt=media&#x26;token=df403c81-b84b-482a-a7f4-a978eaa7ac00" alt=""><figcaption></figcaption></figure>


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