Where is the Bitcoin ledger stored?* Bitcoin has been an active digital currency in the market in recent years and is the most popular cryptocurrency. Therefore, many investors want to acquire Bitcoin, but many are not very familiar with the Bitcoin ledger, especially regarding where the Bitcoin ledger is stored. This question has often been met with partial understanding. Next, I will explain in detail where the Bitcoin ledger is stored. Let's take a look!
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Where is the Bitcoin ledger stored? Who keeps the Bitcoin ledger?
Where is the Bitcoin ledger stored?
Bitcoin uses a proof-of-work method for bookkeeping, which means that the person keeping the ledger must solve a mathematically intensive problem. Whoever solves it first gets to use their ledger and also receives Bitcoin as a reward. This process of solving the mathematical problem is called mining, so the competition in mining is about the computational power of the mining machine's CPU.
What kind of mathematical problem needs to be solved? This mathematical problem involves calculating a hash function, which means inputting an x to obtain a y. Hash functions are characterized by being easy to compute in one direction but difficult to reverse. In other words, knowing x allows you to compute y, but knowing y does not allow you to deduce x.
There are many types of hash functions, and Bitcoin uses the SHA-256 algorithm invented by the National Security Agency of the United States. This means that any string will produce a 256-bit binary number after computation, such as sha256("apple")=100110…… Regardless of whether the string is an article or a movie, it will output a 256-bit binary number.
Specifically for Bitcoin bookkeeping, it requires performing two SHA-256 computations on a new block to obtain a 256-bit binary hash value.
Hash value = sha256[sha256(block information)], and it is required that the first n bits of this hash value are all 0.
Generally, a block of information will contain four main parts: the previous block header, transaction information, time, and a random number.
Since the previous block header, transaction information, and time are known quantities, the key to solving this mathematical problem is to continuously try different random numbers until the hash value's first n bits are all 0. The larger n is, the harder it is to compute the hash value, and the harder it is to find the random number.
At this point, all those computing this mathematical problem are miners, and the computer is the mining machine. The calculation process is mining. The first person to find the corresponding random number that makes the hash value's first n bits all 0 gets the right to package the block, using their ledger as the standard, thus receiving a reward.
Therefore, the key to mining lies in finding this random number, which relies on the computer's computing power.
Who keeps the Bitcoin ledger?
When Satoshi Nakamoto designed Bitcoin, he considered the question of who would keep the ledger after all the Bitcoin had been mined. As we know, there are still about 4 million Bitcoins left to be mined, and at the current mining rate, they will all be mined by the year 2140. By that time, Bitcoin will certainly adjust the incentive mechanism for miners, making transaction fee income the primary reward for bookkeeping. Only in this way can the Bitcoin system maintain its continuous operation.
Of course, some experts have proposed various suggestions. For example, some believe that in the future, a fixed fee could be charged from Bitcoin transactions as a bookkeeping reward for miners, which is also a relatively good practice. Regardless of what happens in the future, the position of miners in Bitcoin bookkeeping will not change. So, why keep the ledger?
Because there are rewards for bookkeeping, there are earnings from transaction fees, and those who package blocks receive system rewards. The reward scheme is that a block is generated every ten minutes, and each time a block is generated, a certain amount of Bitcoin is rewarded. Initially, it was 50 BTC, then it would be reduced to 25 BTC after four years, and then halved again every four years, and so on. This way, the generation of Bitcoin will become less and less, approaching a maximum value. The calculation formula is: 50×6×24×365×4×(1+1/2+1/4+1/8+…)≈21 million, where the initial reward is 50 Bitcoins, with 6 blocks generated per hour, 24 hours a day, and 365 days a year for the first four years, after which it is halved every four years.
In addition, the bookkeeping reward also includes small transaction fees for each transaction initiated, which come with a certain fee that is given to the miners keeping the ledger.
Solving this mathematical problem relies on luck. Theoretically, the luckiest miner might find the result in one hash, while the unluckiest might never find it. However, overall, the greater a miner's computing power, the more hashes they can perform in a unit of time, and the more likely they are to successfully mine in a short period.
This is the detailed content regarding where the Bitcoin ledger is stored and who keeps the Bitcoin ledger.