Blockchain - Proof of Work
We need to implement a distributed timestamp server on a peer-to-peer network since all transactions are time stamped. As shown in the figure below, we now add a new item called Nonce to each block. This requires some additional implementation, which is what I will describe in this Proof-of-Work.
A once number is such that the hash generated for the block meets a certain criterion, such as the hash's leading four digits being zero.
A generated hash would look something like 000010101010xxx. Generally, the miner starts with a Nonce value of 0 and keeps incrementing it until the generated hash meets the specified criteria.
As a result, the hash function generates hashes randomly and is beyond your control - you cannot force it to generate a certain hash. Therefore, it may take several iterations until the desired hash with four leading zeros is generated. Bitcoin block generation normally takes about 10 minutes to complete. Once the miner successfully mines the block, it is released into the system, making it the last block in the chain.
It is important to note that multiple miners compete to create the legitimate block. Bitcoin's system rewards the first successful miner with certain bitcoins. In general, the miner with the most computing power will win early on, which can result in attacks on the entire system. At the end of this tutorial, I will describe these attacks and how they are mitigated.