Mining and Consensus
Bitcoin makes heavy use of hashing, from addresses to transactions IDs and mining. This chapter introduces the mining process. Let's start with some background on the mining process by looking at the monetary aspects of mining, incentives, nodes, and transaction validation. Later, we will discuss some of the more technical aspects of mining.
Aggregating Transactions into Blocks
After validating transactions, a bitcoin node will add them to the memory pool, or transaction pool, where transactions await until they can be included (mined) into a block. Jing's node collects, validates, and relays new transactions just like any other node. Unlike other nodes, however, Jing's node will then aggregate these transactions into a candidate block.
Let's follow the blocks that were created during the time Alice bought a cup of coffee from Bob's Cafe. Alice's transaction was included in block 277,316. For the purpose of demonstrating the concepts in this chapter, let's assume that block was mined by Jing's mining system and follow Alice's transaction as it becomes part of this new block.
Jing's mining node maintains a local copy of the blockchain. By the time Alice buys the cup of coffee, Jing's node has assembled a chain up to block 277,314. Jing's node is listening for transactions, trying to mine a new block and also listening for blocks discovered by other nodes. As Jing's node is mining, it receives block 277,315 through the bitcoin network. The arrival of this block signifies the end of the competition for block 277,315 and the beginning of the competition to create block 277,316.
During the previous 10 minutes, while Jing's node was searching for a solution to block 277,315, it was also collecting transactions in preparation for the next block. By now it has collected a few hundred transactions in the memory pool. Upon receiving block 277,315 and validating it, Jing's node will also compare it against all the transactions in the memory pool and remove any that were included in block 277,315. Whatever transactions remain in the memory pool are unconfirmed and are waiting to be recorded in a new block.
Jing's node immediately constructs a new empty block, a candidate for block 277,316. This block is called a candidate block because it is not yet a valid block, as it does not contain a valid Proof-of-Work. The block becomes valid only if the miner succeeds in finding a solution to the Proof-of-Work algorithm.
When Jing's node aggregates all the transactions from the memory pool, the new candidate block has 418 transactions with total transaction fees of 0.09094928 bitcoin. You can see this block in the blockchain using the Bitcoin Core client command-line interface, as shown in Using the command line to retrieve block 277,316.
Example 3. Using the command line to retrieve block 277,316
$ bitcoin-cli getblockhash 277316 0000000000000001b6b9a13b095e96db41c4a928b97ef2d944a9b31b2cc7bdc4 $ bitcoin-cli getblock 0000000000000001b6b9a13b095e96db41c4a928b97ef2d9\ 44a9b31b2cc7bdc4
{
"hash" : "0000000000000001b6b9a13b095e96db41c4a928b97ef2d944a9b31b2cc7bdc4",
"confirmations" : 35561,
"size" : 218629,
"height" : 277316,
"version" : 2,
"merkleroot" : "c91c008c26e50763e9f548bb8b2fc323735f73577effbc55502c51eb4cc7cf2e",
"tx" : [
"d5ada064c6417ca25c4308bd158c34b77e1c0eca2a73cda16c737e7424afba2f",
"b268b45c59b39d759614757718b9918caf0ba9d97c56f3b91956ff877c503fbe",
... 417 more transactions ...
],
"time" : 1388185914,
"nonce" : 924591752,
"bits" : "1903a30c",
"difficulty" : 1180923195.25802612,
"chainwork" : "000000000000000000000000000000000000000000000934695e92aaf53afa1a",
"previousblockhash" : "0000000000000002a7bbd25a417c0374cc55261021e8a9ca74442b01284f0569"
}