The evolution of accounting technology triggered by the blockchain will promote changes in business collaboration and organizational forms. The core value of distributed ledger technology is to provide a trusted foundation for future multi-party collaborative networks.
When a user initiates a transaction through the Bitcoin client, the message is broadcast to the Bitcoin network for confirmation. Nodes in the network will pack together the received transaction requests waiting for confirmation, and add information such as the hash value of the previous block header to form a block structure. Then, try to find a nonce string (random string) and put it in the block so that its hash result meets certain conditions (such as less than a certain value). The process of calculating the nonce string is commonly known as “mining”. The lookup of the nonce string requires a certain amount of computing power.
Once the node finds a nonce string that meets the conditions, the block becomes legal in format and becomes a candidate block. Nodes broadcast it in the network. After other nodes receive the candidate block and verify it, and find that it is indeed legal, they admit that the block is a new legal block and add it to the local blockchain structure maintained by themselves. When most nodes accept the block, it means that the block is accepted by the network, and the transactions included in the block are confirmed.
The working process of Bitcoin’s blockchain can be simplified into two key processes, one is to complete the consensus on a batch of transactions (creating a legal block structure), and the other is to add a new block to the blockchain structure and be recognized by the network , ensuring that the future cannot be tampered with.
Bitcoin’s consensus mechanism based on computing power (finding nonce strings) is called Proof of Work (PoW). Because there is no known fast heuristic algorithm to make the hash result meet certain conditions, we can only perform brute force calculations on nonce values one by one. The more times you try (the greater the workload), the greater the calculated probability.
By adjusting the constraints on hash results, the Bitcoin network controls an average of about 10 minutes to generate a legal block. The node that calculates the block will get the management fee of all transactions in the block and the reward fee fixed by the agreement (halved every four years).
Anyone can join the Bitcoin network. If there are malicious nodes in the network, can malicious operations be performed to tamper with the records in the blockchain, thereby destroying the entire Bitcoin network system. For example, deliberately refusing to recognize the legal candidate blocks generated by others or simply rejecting transaction requests from other nodes.
In fact, there are a large number (estimated to be thousands) of maintenance nodes in the Bitcoin network, and most of the nodes are working normally, and they only recognize the longest chain structure seen by default. As long as more than half of the nodes in the network do not collude in advance to take malicious actions, the longest chain will become the final legal chain with a high probability. And as time goes on, the probability will increase. For example, after 6 blocks are generated, even if half of the nodes unite to overturn the confirmed result, the probability is only (1/2)^6≈1.6%, which is less than 1/60 possibility. After 10 blocks, the probability will drop below one in a thousand.
If most of the nodes in the entire network unite to do evil, it can cause the entire system to fail to work properly. It often means paying a high price, and compared with the benefits obtained through doing evil, the gains are often outweighed.
