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LESSONS

A ledger everyone checks

Transactions are grouped into blocks and linked in a chain. Miners add blocks by doing real work, and nodes check every rule.

3 MIN READ
Four blocks in a chain, each containing the hash of the previous block.
LEVEL · Beginner
IN THIS LESSON · 4 OF 7
BY THE END YOU WILL BE ABLE TO ANSWER
  • Who enforces Bitcoin's rules?
  • Why is rewriting old history impractical?

Then prove it: a 2-question quiz. The lesson marks itself complete at 100%.

Bitcoin's ledger is a list of transactions grouped into blocks. Each block contains a fingerprint (a hash) of the block before it, so the blocks form a chain. Changing an old block would change its fingerprint and break every block after it.

Who adds the blocks?

Miners compete to add the next block, roughly one every ten minutes. To earn the right they must do a large amount of computing work, called proof of work. The winner is paid newly created bitcoin plus the fees from the transactions in the block.

Who enforces the rules?

Nodes: computers that keep a full copy of the ledger and check every block against the rules. If a miner breaks a rule, honest nodes reject the block, and the work is wasted.

Why this works

Rewriting history would mean redoing enormous amounts of work faster than everyone else combined. That cost is what makes the record hard to change.

One thing to remember

Miners propose, nodes verify, and cost keeps history in place. See how Bitcoin works for the detail.

How the Bitcoin network works · RiverWatch on YouTube ↗
CHECK YOURSELF
1/2 Who enforces Bitcoin's rules?
2/2 Why is rewriting old history impractical?
pick an answer for each question

SOURCES

  1. Bitcoin: A Peer-to-Peer Electronic Cash System (Satoshi Nakamoto, 2008)
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