Proof-of-Work

We learn the name of the complex “mining” process that we discussed earlier. Proof-of-Work is the system that creates the competitive process of nodes working to earn the block reward and transaction fees associated with finding a block.

We are also introduced to the important philosophy behind Bitcoin: that decision-making is done by CPU power. This is where nodes in the network are represented not by majority of IP addresses, but by the majority of computing power. This solidifies the economic foundation behind Bitcoin - investment in nodes infrastructure and hardware grants that node a competitive advantage over other nodes in the network. Because these nodes have a vested interest in the network, attackers with little investment in the network are not easily able to disrupt it.