𝗣𝗿𝗼𝗼𝗳-𝗼𝗳-𝗪𝗼𝗿𝗸

The mechanism for implementing a secure timestamp server in a decentralized peer-to-peer network is called proof-of-work. Like all work, it’s an energy-intensive process. Network participants compete to find a specific value that, when hashed using a cryptographic function, results in a hash starting with a defined number of zeros. This can only be found by guess-and-check, but is trivial to verify once found.

Proof-of-work serves two key purposes:

1. It makes generating timestamps resource-intensive, which prevents manipulation.

2. It establishes a fair process for adding transactions to Bitcoin’s blockchain.

The proof-of-work process involves finding a special number called a "nonce" within a data block. The nonce is incrementally adjusted until, when combined with the block's data and hashed, it results in a hash with a specified number of zeros at the beginning. That hash is then embedded in a block, with each new block referencing the previous block’s hash, forming a chain.

This is often referred to as “mining”. Since most modern computers that are specifically built for this purpose are carrying out this process 𝘵𝘳𝘪𝘭𝘭𝘪𝘰𝘯𝘴 of times each second, they use a lot of energy. All that work acts like a shield, protecting everyone’s money, since it’s impossible to alter a block's contents without re-doing the work required to find it. And as more blocks are added, older blocks become exponentially harder to change.

To establish an automatic decision-making process to solve disputes with the blockchain, #Bitcoin uses computational power as a measure of representation, rather than relying on easily-manipulatable factors like the number of IP addresses on the network. The longest chain has the most work and is therefore the only valid chain, end of story.

As computing power enters or leaves the Bitcoin network, the amount of time it takes to find the next block increases or decreases. So Satoshi added the Difficulty Adjustment, which adjusts the difficulty of finding the next block, so the average time remains around 6 blocks per hour, or every 10 minutes. This adaptive mechanism ensures the network's stability and a certain predictability with transaction confirmation times.

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