Dive into the captivating realm of blockchain consensus algorithms and unravel the secrets behind how computer nodes achieve unanimity in the digital realm! From the groundbreaking Proof of Work (PoW), where miners race to crack complex puzzles and the longest chain prevails, to the ingenious Proof of Stake (PoS), where validators back transactions with coins and energy-intensive mining becomes a thing of the past. Ethereum 2.0 and Polkadot have already harnessed this innovation, all while guarding against mischievous actors. But wait, there's more! Experience the intrigue of Proof of Authority, where reputation reigns supreme, Solana's groundbreaking Proof of History, and the Trust Environment's mighty Proof of Elapsed Time. Brace yourself for a journey into the diverse and exhilarating future of blockchain – where distinct consensus algorithms flourish, each boasting unique strengths and security paradigms. The stage is set, the future is here, and the world of blockchain has never been more electrifying!
Bitcoin works through a system in which it’s possible for a group of people to reach a consensus and agree on a single valid history of transactions by including them in the blockchain.
Bitcoin miners are users who seek a business opportunity by purchasing powerful computers to solve complicated mathematical equations through what is known as proof of work.
The miners are responsible for listening to and reporting all transactions that happen on the network. Miners record the transactions by adding them in batches called blocks.
The mining analogy to gold is misleading. The purpose of mining is not to create Bitcoin but rather to process everyone’s transactions and update the database.
Bitcoin is the first successful decentralized digital currency because it was the first to solve the double-spending problem of spending the same money twice.
Double-spend attacks can happen through a 51% attack, where a hacker captures 51% of the hash power of the network. So far no such attack has occurred due to the difficulty of mining, cost of hardware, and electricity required.