The Whitepaper
Section 5 of the Bitcoin white paper defines the network's protocol specifications stipulating the one and only type of node found in Bitcoin. These nodes are often referred to as miners, and are characterised by an ability to produce blocks, distribute blocks to peers (other nodes), and validate received blocks.
Merely running the open source BitcoinSV node software does not make a machine a Bitcoin node. If the system is not upholding the consensus mechanism of the network based on block publication and proof-of-work, it’s not a node.
In Bitcoin’s initial stages, a home computer could act as a node producing valid blocks by performing the Proof of Work (PoW) process using a desktop grade CPU. As the difficulty of the PoW increased, GPUs and then Application Specific Integrated Circuits (ASICs) became necessary equipment to remain competitive.
As bitcoin scales, the difficulty of the PoW and transaction throughput of the network increases. This makes it necessary to invest in specialised hardware and systems including server grade systems and high bandwidth network interfaces to validate the transactions that are included in each block, as well as large numbers of networked ASIC hashing machines to perform the energy intensive process of Proof of Work process.
Most nodes typically run software called "bitcoind" however there is no requirement to use any specific software. Nodes can run whatever software allows them to participate in the network by producing valid blocks. More details about the system architecture of the Bitcoin SV node can be found here: https://bitcoinsv.io/documentation/miners/system-architecture/
Read more about the Bitcoin network here: https://wiki.bitcoinsv.io/index.php/The_Bitcoin_Network
The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work. This timestamping function is the main role of nodes on the network. It is their job to collate, validate, process and store all of the actions taking place on the network globally and in real-time by placing them into blocks which are then added to the chain via the competitive proof-of-work process. With each block added to the chain, winning participants are awarded payment.
Bitcoin uses a proof of work system in the process of mining. In order for a block to be accepted, the broadcasting node must demonstrate valid proof of work which covers all of the data in the block.
The proof of work algorithm attempts to solve a puzzle with a low probability of success per trial.
A Miner uses a candidate block header as the input hashes it, then checks whether the hash value is below a target. If it's not, the Miner changes the nonce in the block header and hashes it again. Once the Miner finds a hash value below the target, validates the block, distributes the block to the rest of the miners on the network, and then those miners start the proof-of-work process again referencing this blockhash in their new header template, the block has been successfully mined.
The difficulty of this process is adjusted to limit the rate at which new blocks can be generated by the network. Due to the very low probability of successful generation, it is impossible to predict which node will generate the next block.
The low probability of successfully finding valid proof of work solutions reduces the likelihood that two or more Miners generate a block around the same time.
Proof of work is a function of a node operator’s ability to invest in the network and acts as a means for other nodes to ensure that the information they are receiving was validly generated by another node. In this, it acts as a gating function applying an up-front cost to any attempt to suggest a new block.
This cost incentivises nodes to participate honestly; only proposing honest blocks.
Importantly, proof of work does not prevent anyone from spinning up a node, or trying to extend the chain. However, it means that anyone wanting to participate must invest in the network and the infrastructure needed to maximise their chance of success.
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