Bitcoin Mining

The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin wallet software. Transactions are recorded into a distributed, replicated public database known as the block chain, with consensus achieved by a proof-of-work system called "mining". The block chain is distributed internationally using peer-to-peer filesharing technology similar to BitTorrent. The protocol was designed in 2008 and released in 2009 as open source software by "Satoshi Nakamoto", the name or pseudonym of the original developer/developer group.

The network timestamps transactions by including them in blocks that link to form a chain called the block chain. Such blocks cannot be changed without redoing the work that created each block down the chain from the modified block. The chain serves as proof of the sequence of events and that this sequence was verified by a majority of the bitcoin network's computing power. As long as a majority of computing power is controlled by nodes that are not cooperating to attack the network, they will outpace attackers. This provides a means of providing security not found in other protocols.

The network requires minimal structure to share transactions. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will. Upon reconnection, a node downloads and verifies new blocks from other nodes to complete its local copy of the block chain.