Understand the fundamentals
A shared transaction record
Bitcoin is a network of computers that follow shared rules for recording transfers of bitcoin. A transaction is a proposed transfer. A block is a group of transactions, plus information that links it to the block before it. Together, the blocks form a history that other computers can check. This history matters because the same funds must never be spent twice.
A node is a computer running software that checks those rules. A full node checks every transaction and block for itself. A miner cannot make a rule-breaking transaction valid just by using more electricity. Every proposed block must still pass the rules that nodes check.
Visual explanation
How one block refers to the one before it
- Transactions
- Transfers are collected into a proposed block.
- Previous-block reference
- Each new block records the identifying code (hash) of the block before it.
- Independent validation
- Full nodes check that a proposed block follows the rules and has valid proof of work before accepting it.
The links keep the blocks in order, and proof of work makes that history costly to replace. Valid proof of work cannot make a rule-breaking block acceptable.
See how it works
Why producing a block takes work
Many participants could propose different next blocks. Bitcoin handles this with proof of work: evidence that a large amount of computing work was done. Proof of work makes producing a block costly. It also gives nodes a way to measure and compare competing valid histories. Miners calculate over and over until one result meets a numerical requirement set by the rules. Finding that result takes a huge number of tries on average. Checking the result is quick and easy.
The linked blocks form a chain. When there are competing valid chains, nodes follow the one with the most total proof of work. Changing an old block would change its identifying code and break the link to every block after it. An attacker would have to redo the work for that block and every later block. They would also have to work faster than the honest network, which keeps adding new blocks. All the work already built into the chain is what makes rewriting its history so hard.
Connect it to the field
What this means on the mining floor
The machines you look after do calculations that help find valid blocks. Whoever produces a block that the network accepts can claim the block subsidy (new bitcoin allowed by the rules) plus the transaction fees in that block. Many machines mine through a pool, a service that combines many miners’ work. In that case, the pool’s rules decide how miners are paid. As a Miner Technician, you help keep that computing work running reliably. You do not approve anyone’s bitcoin payments.
Picture a rack of miners (a shelf unit holding several machines) that loses its internet connection. The machines may stay powered on, but they can no longer get new work from the pool or send back results. So using electricity does not prove that a machine is doing useful work. The job links three things: computing, communications and the Bitcoin rules.
Terms used in this lesson
- Transaction
- A proposed transfer of bitcoin.
- Block
- A group of transactions, linked to the block before it.
- Full node
- A computer that independently checks transactions and blocks against Bitcoin’s rules.
Optional references & further reading
Use current manufacturer instructions for the exact equipment and your site’s approved procedures. Course levels do not grant task authorization.