Chapter 32

It was a reward mechanism. As computer processing power continued to rise in accordance with Moore's Law, what could be done?

The program automatically increased the difficulty of the math problem, ensuring that each one took at least ten minutes to solve, thereby controlling the rate at which Bitcoins were generated. But note that these math problems were not made up at random. They came from Bitcoin transaction data within the community. Every ten minutes, the software packaged the transaction data generated during that period into a math problem through an extremely complex mathematical process, then sent it to every computer in the community to compete in solving it. This problem had one characteristic: it was troublesome to calculate but very easy to verify. Once someone solved it, they broadcast the answer to the entire community.

If more than half of the computers said, "Alright, this guy's calculation checks out," then the transaction was proven genuine and valid, and the first person to solve it received that batch of Bitcoins as a reward. A little convoluted, right? An example would make it clear. If Li Lei wanted to transfer five Bitcoins to Han Meimei, the process had three steps. First, Li Lei shouted, "On such-and-such date, I, Li Lei, am transferring five Bitcoins to Han Meimei." That statement was packaged by Bitcoin software into a problem and sent to the computers in the community. The problem contained two important questions: Were the five Bitcoins Li Lei was trying to send actually his? Did this guy even have that much in his account, or was he just talking nonsense?

Second, all the computers began competing to solve the problem. The first one to get the answer broadcast it to the entire community. Once more than half of the computers recognized that