Proof of work and the network

One CPU, one vote

Publishing the timestamp chain on a single server would bring the middleman back. Section 4 instead asks every block to carry a proof of work: a number found by trying again and again until the hash of the block starts with enough zeros. Finding it costs real computing effort; checking it costs almost nothing.

Voting by IP address would let anyone with many addresses take over. Proof of work makes the vote cost something real: the paper calls it one CPU one vote. The majority decision is the chain with the most work in it.

The six steps of the network

• New transactions are broadcast to all nodes.
• Each node collects new transactions into a block.
• Each node works on finding a proof of work for its block.
• When a node finds one, it broadcasts the block to all nodes.
• Nodes accept the block only if all its transactions are valid and not already spent.
• Nodes show they accept it by building the next block on top of it.

In the paper, every node also mines. Today the roles are mostly separate: miners produce blocks, and many more nodes check them without mining. Step 5, checking everything, is still done by every node.