Bitcoin: A Peer-to-Peer Electronic Cash System
5. Network
The steps to run the network are as follows:
1) New transactions are broadcast to all nodes.
2) Each node collects new transactions into a block.
3) Each node works on finding a difficult proof-of-work for its block.
4) When a node finds a proof-of-work, it broadcasts the block to all nodes.
5) Nodes accept the block only if all transactions in it are valid and not already spent.
6) Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
1) New transactions are broadcast to all nodes.
2) Each node collects new transactions into a block.
3) Each node works on finding a difficult proof-of-work for its block.
4) When a node finds a proof-of-work, it broadcasts the block to all nodes.
5) Nodes accept the block only if all transactions in it are valid and not already spent.
6) Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
Nodes always consider the longest chain to be the correct one and will keep working on extending it. If two nodes broadcast different versions of the next block simultaneously, some nodes may receive one or the other first. In that case, they work on the first one they received, but save the other branch in case it becomes longer. The tie will be broken when the next proof-of-work is found and one branch becomes longer; the nodes that were working on the other branch will then switch to the longer one.
💡 Key Concepts
📡 Broadcast System
New transactions and blocks are announced to all nodes in the network simultaneously, ensuring everyone has the same information.
🔗 Longest Chain Rule
When conflicts arise, the chain with the most cumulative work is accepted. This naturally resolves disputes without central coordination.
⚖️ Consensus Mechanism
The network agrees on transaction order through proof-of-work. No voting or central authority is needed - the math decides.
🔄 Self-Healing Network
If nodes temporarily disagree (fork), the network automatically converges on the longest chain, healing the split.
✅ Transaction Validation
Each node independently verifies all transactions. Invalid transactions are rejected, preventing fraud.