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.

Bitcoin Relay Networks

While the bitcoin P2P network serves the general needs of a broad variety of node types, it exhibits too high network latency for the specialized needs of bitcoin mining nodes.

Bitcoin miners are engaged in a time-sensitive competition to solve the Proof-of-Work problem and extend the blockchain. While participating in this competition, bitcoin miners must minimize the time between the propagation of a winning block and the beginning of the next round of competition. In mining, network latency is directly related to profit margins.

Bitcoin Relay Network is a network that attempts to minimize the latency in the transmission of blocks between miners. The original Bitcoin Relay Network was created by core developer Matt Corallo in 2015 to enable fast synchronization of blocks between miners with very low latency. The network consisted of several specialized nodes hosted on the Amazon Web Services infrastructure around the world and served to connect the majority of miners and mining pools.

The original Bitcoin Relay Network was replaced in 2016 with the introduction of the Fast Internet Bitcoin Relay Engine or FIBRE, also created by core developer Matt Corallo. FIBRE is a UDP-based relay network that relays blocks within a network of nodes. FIBRE implements compact block optimization to further reduce the amount of data transmitted and the network latency.

Relay networks are not replacements for bitcoin's P2P network. Instead they are overlay networks that provide additional connectivity between nodes with specialized needs. Like freeways are not replacements for rural roads, but rather shortcuts between two points with heavy traffic, you still need small roads to connect to the freeways.