Part 4 · Consensus — Proof of Work & Mining

This is where “Nakamoto consensus” stops being a slogan and becomes mechanics you can compute. It makes Satoshi’s synthesis concrete, and uses everything from Parts 1–3: the hash functions that supply the “work,” the block structure that gets hashed, and the transactions that get ordered.

The roadmap for this part

We build the machinery bottom-up — each page assumes the one before it:

1. Proof of Work in Depth — hashing as a lottery; why finding a header hash below the target is hard to produce but trivial to verify, and how that asymmetry converts electricity into security.
2. Target, bits & Difficulty — what “below the target” actually means, the compact bits encoding in the header, and difficulty as a human-friendly ratio.
3. The Difficulty Retargeting Algorithm — how the network retargets every 2016 blocks (~2 weeks) to hold the ~10-minute average steady, whatever the hashrate does.
4. The Mining Process — nonce, extranonce, the coinbase, and timestamp: the actual brute-force search a miner runs.
5. Mining Pools & How Rewards Are Shared — why solo mining is a lottery, how pools smooth variance with shares, and what pools can (and cannot) do.
6. The Most-Work Chain & Probabilistic Finality — why “longest” means most cumulative work, why confirmations make reversal exponentially costly, and what a reorg is.
7. Block Subsidy, Halving & Issuance — the 50-BTC subsidy, the halving every 210,000 blocks, the 21-million cap, and the long transition from subsidy to fees.

The recurring question, applied here

How does Proof of Work help untrusting strangers agree on one ledger? (This part is the full answer — make influence cost energy, and let the most-work chain be the truth.)