Beginner's Guide to Nakamoto Consensus
This guide explains how Nakamoto Consensus uses proof of work, difficulty adjustments, economic incentives, and decentralization to enable an open blockchain network to confirm transactions and maintain a consistent state without a centralized institution. It also describes its security benefits and its energy and scalability challenges.
Core Concepts and Components
Nakamoto Consensus is a protocol through which a blockchain network agrees on the state of the blockchain. Bitcoin uses it to maintain network integrity and prevent double spending. Its core components include proof of work, block difficulty, block rewards, transaction fees, and decentralization: miners compete for the opportunity to record transactions with computing power, while the network uses incentives to encourage participants to follow the rules.
Transaction Confirmation Process
After a user broadcasts a transaction, nodes check balances and network rules. Miners then package valid transactions into a block and solve the proof-of-work problem. The first miner to find a qualifying hash broadcasts the solution, and other nodes add the block after validating it. Each new block references the previous block's hash, maintaining continuity in the chain and increasing the cost of tampering.
Security and Practical Challenges
Difficulty adjusts with the network's total computing power to maintain a relatively stable block production rate. To rewrite the chain, an attacker would generally need to control more than half of the computing power, which is very costly on Bitcoin. At the same time, proof of work consumes substantial energy, mining pool concentration may create centralization risk, and transaction capacity and community disagreements may also lead to scalability problems or forks.
Original Tutorial
https://www.binance.com/zh-CN/academy/articles/what-is-the-nakamoto-consensus
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