The Bitcoin Network

One of the core components of the Bitcoin system is the peer-to-peer network that it runs on. While peer-to-peer, or P2P, networks existed before Bitcoin, understanding what is happening on the Bitcoin P2P network is fundamental to understanding Bitcoin. 

To grasp what is happening on the Bitcoin network, read this chapter that discusses what the computers, or nodes, on the Bitcoin network are doing. It covers node functions such as running a wallet, mining, maintaining a copy of the blockchain, and routing. We'll get more in-depth on wallets and mining in later sections. Here you'll want to focus on the last two functions mentioned, maintaining a record of all transactions made on the network by keeping copies of all blocks in the blockchain and validating and propagating transaction data.

The Extended Bitcoin Network

The main bitcoin network, running the bitcoin P2P protocol, consists of between 5,000 and 8,000 listening nodes running various versions of the bitcoin reference client (Bitcoin Core) and a few hundred nodes running various other implementations of the bitcoin P2P protocol, such as Bitcoin Classic, Bitcoin Unlimited, BitcoinJ, Libbitcoin, btcd, and bcoin. A small percentage of the nodes on the bitcoin P2P network are also mining nodes, competing in the mining process, validating transactions, and creating new blocks. Various large companies interface with the bitcoin network by running full-node clients based on the Bitcoin Core client, with full copies of the blockchain and a network node, but without mining or wallet functions. These nodes act as network edge routers, allowing various other services (exchanges, wallets, block explorers, merchant payment processing) to be built on top.

The extended bitcoin network includes the network running the bitcoin P2P protocol, described earlier, as well as nodes running specialized protocols. Attached to the main bitcoin P2P network are a number of pool servers and protocol gateways that connect nodes running other protocols. These other protocol nodes are mostly pool mining nodes and lightweight wallet clients, which do not carry a full copy of the blockchain.

The extended bitcoin network showing various node types, gateways, and protocols shows the extended bitcoin network with the various types of nodes, gateway servers, edge routers, and wallet clients and the various protocols they use to connect to each other.

Figure 2. Different types of nodes on the extended bitcoin network

Figure 3. The extended bitcoin network showing various node types, gateways, and protocols