[[blockchain]] == The Blockchain The ((("blockchain", "explained", id="blockchain-explain")))blockchain is the history of every confirmed Bitcoin transaction. It's what allows every full node to independently determine what keys and scripts control which bitcoins. In this chapter, we'll look at the structure of the blockchain and see how it uses cryptographic commitments and other clever tricks to make every part of it easy for full nodes (and sometimes lightweight clients) to validate. The blockchain data structure is an ordered, back-linked list of blocks of transactions. The blockchain can be stored as a flat file or in a simple database. Blocks are linked "back," each referring to the previous block in the chain. The blockchain is often visualized as a vertical stack, with blocks layered on top of each other and the first block serving as the foundation of the stack. The visualization of blocks stacked on top of each other results in the use of terms such as "height" to refer to the distance from the first block, and "top" or "tip" to refer to the most recently added block. Each block within the blockchain is identified by a hash, generated using the SHA256 cryptographic hash algorithm on the header of the block. Each block also commits to the previous block, known as ((("parent blocks")))the _parent_ block, through the "previous block hash" field in the block header. The sequence of hashes linking each block to its parent creates a chain going back all the way to the first block ever created, known ((("genesis block")))as the _genesis block_. Although a block has just one parent, it can have ((("child blocks")))multiple children. Each of the children commits to the same parent block. Multiple children arise during a blockchain "fork," a temporary situation that can occur when different blocks are discovered almost simultaneously by different miners (see <>). Eventually only one child block becomes part of the blockchain accepted by all full nodes, and the "fork" is resolved. The "previous block hash" field is inside the block header and thereby affects the _current_ block's hash. Any change to a parent block requires a child block's hash to change, which requires a change in the pointer of the grandchild, which in turn changes the grandchild, and so on. This sequence ensures that, once a block has many generations following it, it cannot be changed without forcing a recalculation of all subsequent blocks. Because such a recalculation would require enormous computation (and therefore energy consumption), the existence of a long chain of blocks makes the blockchain's deep history impractical to change, which is a key feature of Bitcoin's security. One way to think about the blockchain is like layers in a geological formation, or glacier core sample. The surface layers might change with the seasons, or even be blown away before they have time to settle. But once you go a few inches deep, geological layers become more and more stable. By the time you look a few hundred feet down, you are looking at a snapshot of the past that has remained undisturbed for millions of years. In the blockchain, the most recent few blocks might be revised if there is a chain reorganization due to a fork. The top six blocks are like a few inches of topsoil. But once you go more deeply into the blockchain, beyond six blocks, blocks are less and less likely to change. After 100 blocks back there is so much stability that the coinbase transaction--the transaction containing the reward in bitcoin for creating a new block--can be spent. While the protocol always allows a chain to be undone by a longer chain and while the possibility of any block being reversed always exists, the probability of such an event decreases as time passes until it ((("blockchain", "explained", startref="blockchain-explain")))becomes infinitesimal. === Structure of a Block A block ((("blocks", "structure of")))is a container data structure that aggregates transactions for inclusion in the blockchain. The block is made of a header, containing metadata, followed by a long list of transactions that make up the bulk of its size. The block header is 80 bytes, whereas the total size of all transactions in a block can be up to about 4,000,000 bytes. A complete block, with all transactions, can therefore be almost 50,000 times larger than the block header. <> describes how Bitcoin Core stores the structure of a block. ++++
The structure of a block
Size Field Description

4 bytes

Block Size

The size of the block, in bytes, following this field

80 bytes

Block Header

Several fields form the block header

1–3 bytes (compactSize)

Transaction Counter

How many transactions follow

Variable

Transactions

The transactions recorded in this block
++++ [[block_header]] === Block Header The ((("blocks", "block header")))((("block header")))block header consists of block metadata as shown in <>. ++++
The structure of the block header
Size Field Description

4 bytes

Version

Originally a version field; its use has evolved over time

32 bytes

Previous Block Hash

A hash of the previous (parent) block in the chain

32 bytes

Merkle Root

The root hash of the merkle tree of this block’s transactions

4 bytes

Timestamp

The approximate creation time of this block (Unix epoch time)

4 bytes

Target

A compact encoding of the proof-of-work target for this block

4 bytes

Nonce

Arbitrary data used for the proof-of-work algorithm
++++ The nonce, target, and timestamp are used in the mining process and will be discussed in more detail in <>. [[block_hash]] === Block Identifiers: Block Header Hash and Block Height The ((("blocks", "identifiers", id="block-identify")))((("block header hash", id="block-header-hash")))((("block height", id="block-height")))primary identifier of a block is its cryptographic hash, a commitment made by hashing the block header twice through the SHA256 algorithm. The resulting 32-byte hash is called the _block hash_ but is more accurately the _block header hash_, pass:[because only the block header is used to compute it. For example,] +000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f+ is the block hash of the first block on Bitcoin's blockchain. The block hash identifies a block uniquely and unambiguously and can be independently derived by any node by simply hashing the block header. Note that the block hash is not actually included inside the block's data structure. Instead, the block's hash is computed by each node as the block is received from the network. The block hash might be stored in a separate database table as part of the block's metadata, to facilitate indexing and faster retrieval of blocks from disk. A second way to identify a block is by its position in the blockchain, called the pass:[block height. The genesis block is at block height 0 (zero) and is the] pass:[same block that was previously referenced by the following block hash] +000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f+. A block can thus be identified in two ways: by referencing the block hash or by referencing the block height. Each subsequent block added "on top" of that first block is one position "higher" in the blockchain, like boxes stacked one on top of the other. The block height 800,000 was reached during the writing of this book in mid-2023, meaning there were 800,000 blocks stacked on top of the first block created in January 2009. Unlike the block hash, the block height is not a unique identifier. Although a single block will always have a specific and invariant block height, the reverse is not true—the block height does not always identify a single block. Two or more blocks might have the same block height, competing for the same position in the blockchain. This scenario is discussed in detail in the section <>. In early blocks, the block height was also not a part of the block's data structure; it was not stored within the block. Each node dynamically identified a block's position (height) in the blockchain when it was received from the Bitcoin network. A later protocol change (BIP34) began including the block height in the coinbase transaction, although its purpose was to ensure each block had a different coinbase transaction. Nodes still need to dynamically identify a block's height in order to validate the coinbase field. The block height might also be stored as metadata in an indexed database table for faster retrieval. [TIP] ==== A block's _block hash_ always identifies a single block uniquely. A block also always has a specific _block height_. However, it is not always the case that a specific block height identifies a single block. Rather, two or more blocks might compete for a single position((("blocks", "identifiers", startref="block-identify")))((("block header hash", startref="block-header-hash")))((("block height", startref="block-height"))) in the blockchain. ==== === The Genesis Block The first block((("blockchain", "genesis block", id="blockchain-genesis")))((("genesis block", id="genesis-block")))((("Bitcoin Core", "genesis block", id="bitcoin-core-genesis"))) in the blockchain is called the _genesis block_ and was created in 2009. It is the common ancestor of all the blocks in the blockchain, meaning that if you start at any block and follow the chain backward in time, you will eventually arrive at the genesis block. Every node always starts with a blockchain of at least one block because the genesis block is statically encoded within Bitcoin Core, such that it cannot be altered. Every node always "knows" the genesis block's hash and structure, the fixed time it was created, and even the single transaction within. Thus, every node has the starting point for the blockchain, a secure "root" from which to build a trusted blockchain. See the statically encoded genesis block inside the Bitcoin Core client in https://oreil.ly/FqPW5[_chainparams.cpp_]. The following identifier hash belongs to the genesis block: ---- 000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f ---- You can search for that block hash in almost any block explorer website, such as _blockstream.info_, and you will find a page describing the contents of this block, with a URL containing that hash: [quote] ____ https://blockstream.info/block/000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f ____ Alternatively, you can get the block using Bitcoin Core on the command line: ---- $ bitcoin-cli getblock \ 000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f ---- [source,json] ---- { "hash": "000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f", "confirmations": 790496, "height": 0, "version": 1, "versionHex": "00000001", "merkleroot": "4a5e1e4baab89f3a32518a88c3[...]76673e2cc77ab2127b7afdeda33b", "time": 1231006505, "mediantime": 1231006505, "nonce": 2083236893, "bits": "1d00ffff", "difficulty": 1, "chainwork": "[...]000000000000000000000000000000000000000000000100010001", "nTx": 1, "nextblockhash": "00000000839a8e6886ab5951d7[...]fc90947ee320161bbf18eb6048", "strippedsize": 285, "size": 285, "weight": 1140, "tx": [ "4a5e1e4baab89f3a32518a88c31bc87f618f76673e2cc77ab2127b7afdeda33b" ] } ---- The genesis block contains a message within it. The coinbase transaction input contains the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks." This message was intended to offer proof of the earliest date this block could have been created, by referencing the headline of the British newspaper _The Times_. It also serves as a tongue-in-cheek reminder of the importance of an independent monetary system, with Bitcoin's launch occurring at the same time as an unprecedented worldwide monetary crisis. The message was embedded in the first block by Satoshi Nakamoto, Bitcoin's ((("Nakamoto, Satoshi")))((("blockchain", "genesis block", startref="blockchain-genesis")))((("genesis block", startref="genesis-block")))((("Bitcoin Core", "genesis block", startref="bitcoin-core-genesis")))creator. === Linking Blocks in the Blockchain Bitcoin((("blockchain", "linking blocks", id="blockchain-link")))((("blocks", "linking in blockchain", id="block-link")))((("linking blocks in blockchain", id="link-block"))) full nodes validate every block in the blockchain after the genesis block. Their local view of the blockchain is constantly updated as new blocks are found and used to extend the chain. As a node receives incoming blocks from the network, it will validate these blocks and then link them to its view of the existing blockchain. To establish a link, a node will examine the incoming block header and look for the "previous block hash." [role="less_space pagebreak-before"] Let's assume, for example, that a node has 277,314 blocks in the local copy of the blockchain. The last block the node knows about is block 277,314, with a block header hash of: ---- 00000000000000027e7ba6fe7bad39faf3b5a83daed765f05f7d1b71a1632249 ---- The Bitcoin node then receives a new block from the network, which it parses as follows: [source,json] ---- { "size" : 43560, "version" : 2, "previousblockhash" : "00000000000000027e7ba6fe7bad39faf3b5a83daed765f05f7d1b71a1632249", "merkleroot" : "5e049f4030e0ab2debb92378f53c0a6e09548aea083f3ab25e1d94ea1155e29d", "time" : 1388185038, "difficulty" : 1180923195.25802612, "nonce" : 4215469401, "tx" : [ "257e7497fb8bc68421eb2c7b699dbab234831600e7352f0d9e6522c7cf3f6c77", "[... many more transactions omitted ...]", "05cfd38f6ae6aa83674cc99e4d75a1458c165b7ab84725eda41d018a09176634" ] } ---- Looking at this new block, the node finds the +previousblockhash+ field, which contains the hash of its parent block. It is a hash known to the node, that of the last block on the chain at height 277,314. Therefore, this new block is a child of the last block on the chain and extends the existing blockchain. The node adds this new block to the end of the chain, making the blockchain longer with a new height of 277,315. <> shows the chain of three blocks, linked by references in((("blockchain", "linking blocks", startref="blockchain-link")))((("blocks", "linking in blockchain", startref="block-link")))((("linking blocks in blockchain", startref="link-block"))) the +previousblockhash+ field. [[chain_of_blocks]] .Blocks linked in a chain by each referencing the previous block header hash. image::images/mbc3_1101.png[] [[merkle_trees]] === Merkle Trees Each block((("blockchain", "merkle trees", id="blockchain-merkle")))((("merkle trees", id="merkle-tree-explain"))) in the Bitcoin blockchain contains a summary of all the transactions in the block using a _merkle tree_. A _merkle tree_, also known as a _binary hash tree_, is ((("binary hash trees")))a data structure used for efficiently summarizing and verifying the integrity of large sets of data. Merkle trees are binary trees containing cryptographic hashes. The term "tree" is used in computer science to describe a branching data structure, but these trees are usually displayed upside down with the "root" at the top and the "leaves" at the bottom of a diagram, as you will see in the examples that follow. Merkle trees are used in Bitcoin to summarize all the transactions in a block, producing an overall commitment to the entire set of transactions and permitting a very efficient process to verify whether a transaction is included in a block. A merkle tree is constructed by recursively hashing pairs of elements until there is only one hash, called the _root_, or _merkle root_. The cryptographic hash algorithm used in Bitcoin's merkle trees is SHA256 applied twice, also known as double-SHA256. When N data elements are hashed and summarized in a merkle tree, you can check to see if any one data element is included in the tree with about +log~2~(N)+ calculations, making this a very efficient data structure. The merkle tree is constructed bottom-up. In the following example, we start with four transactions, A, B, C, and D, which form the _leaves_ of the merkle tree, as shown in <>. The transactions are not stored in the merkle tree; rather, their data is hashed and the resulting hash is stored in each leaf node as H~A~, H~B~, H~C~, and H~D~: ++++ 
HA = SHA256(SHA256(Transaction A))
++++ Consecutive pairs of leaf nodes are then summarized in a parent node by concatenating the two hashes and hashing them together. For example, to construct the parent node H~AB~, the two 32-byte hashes of the children are concatenated to create a 64-byte string. That string is then double-hashed to produce the parent node's hash: ++++ 
HAB = SHA256(SHA256(HA || HB))
++++ The process continues until there is only one node at the top, the node known as the merkle root. That 32-byte hash is stored in the block header and summarizes all the data in all four transactions. <> shows how the root is calculated by pair-wise hashes of the nodes. [[simple_merkle]] .Calculating the nodes in a merkle tree. image::images/mbc3_1102.png["merkle_tree"] Because the merkle tree is a binary tree, it needs an even number of leaf nodes. If there are an odd number of transactions to summarize, the last transaction hash will be duplicated to create an even number of leaf nodes, also known ((("balanced merkle trees")))as a _balanced tree_. This is shown in <>, where transaction C is duplicated. Similarly, if there are an odd number of hashes to process at any level, the last hash is duplicated. [[merkle_tree_odd]] .Duplicating one data element achieves an even number of data elements. image::images/mbc3_1103.png["merkle_tree_odd"] .A Design Flaw in Bitcoin's Merkle Tree **** An extended comment in Bitcoin Core's source code, reproduced here with slight revisions, describes a significant problem in the design of Bitcoin's duplication of odd elements in its merkle tree: ____ WARNING! If you're reading this because you're learning about crypto and/or designing a new system that will use merkle trees, keep in mind that the following merkle tree algorithm has a serious flaw related to duplicate txids, resulting in a vulnerability (CVE-2012-2459). The reason is that if the number of hashes in the list at a given level is odd, the last one is duplicated before computing the next level (which is unusual in merkle trees). This results in certain sequences of transactions leading to the same merkle root. For example, the two trees in <>: [[cve_tree]] [role="width-90"] .Two Bitcoin-style merkle trees with the same root but a different number of leaves. image::images/mbc3_1104.png["Two Bitcoin-style merkle trees with the same root but a different number of leaves"] The transaction lists [1,2,3,4,5,6] and [1,2,3,4,5,6,5,6] (where 5 and 6 are repeated) result in the same root hash A (because the hash of both of (F) and (F,F) is C). The vulnerability results from being able to send a block with such a transaction list, with the same merkle root, and the same block hash as the original without duplication, resulting in failed validation. If the receiving node proceeds to mark that block as permanently invalid however, it will fail to accept further unmodified (and thus potentially valid) versions of the same block. We defend against this by detecting the case where we would hash two identical hashes at the end of the list together, and treating that identically to the block having an invalid merkle root. Assuming no double-SHA256 collisions, this will detect all known ways of changing the transactions without affecting the merkle root. ++++

Bitcoin Core src/consensus/merkle.cpp

++++ ____ **** [role="less_space pagebreak-before"] The same method for constructing a tree from four transactions can be generalized to construct trees of any size. In Bitcoin it is common to have several thousand transactions in a single block, which are summarized in exactly the same way, producing just 32 bytes of data as the single merkle root. In <>, you will see a tree built from 16 transactions. Note that although the root looks bigger than the leaf nodes in the diagram, it is the exact same size, just 32 bytes. Whether there is one transaction or ten thousand transactions in the block, the merkle root always summarizes them into 32 bytes. To prove that a specific transaction is included in a block, a node only needs to produce approximately +log~2~(N)+ 32-byte hashes, constituting ((("authentication path")))((("merkle path")))an _authentication path_ or _merkle path_ connecting the specific transaction to the root of the tree. This is especially important as the number of transactions increases because the base-2 logarithm of the number of transactions increases much more slowly. This allows Bitcoin nodes to efficiently produce paths of 10 or 12 hashes (320–384 bytes), which can provide proof of a single transaction out of more than a thousand transactions in a multimegabyte block. [[merkle_tree_large]] .A merkle tree summarizing many data elements. image::images/mbc3_1105.png["merkle_tree_large"] In <>, a node can prove that a transaction K is included in the block by producing a merkle path that is only four 32-byte hashes long (128 bytes total). The path consists of the four hashes (shown with a shaded background) H~L~, H~IJ~, H~MNOP~, and H~ABCDEFGH~. With those four hashes provided as an authentication path, any node can prove that H~K~ (with a black background at the bottom of the diagram) is included in the merkle root by computing four additional pair-wise hashes H~KL~, H~IJKL~, H~IJKLMNOP~, and the merkle tree root (outlined in a dashed line in the diagram). [[merkle_tree_path]] .A merkle path used to prove inclusion of a data element. image::images/mbc3_1106.png["merkle_tree_path"] The efficiency of merkle trees becomes obvious as the scale increases. The largest possible block can hold almost 16,000 transactions in 4,000,000 bytes, but proving any particular one of those 16,000 transactions is a part of that block only requires a copy of the transaction, a copy of the 80-byte block header, and 448 bytes for the merkle proof. That makes the largest possible proof almost 10,000 times smaller than the largest possible Bitcoin block. === Merkle Trees and Lightweight Clients Merkle trees are ((("Bitcoin network", "lightweight clients", "merkle trees and")))((("lightweight clients", "merkle trees and")))used extensively by lightweight clients. Lightweight clients don't have all transactions and do not download full blocks, just block headers. In order to verify that a transaction is included in a block, without having to download all the transactions in the block, they use a merkle path. Consider, for example, a lightweight client that is interested in incoming payments to an address contained in its wallet. The lightweight client will establish a bloom filter (see <>) on its connections to peers to limit the transactions received to only those containing addresses of interest. When a peer sees a transaction that matches the bloom filter, it will send that block using a +merkleblock+ message. The +merkleblock+ message contains the block header as well as a merkle path that links the transaction of interest to the merkle root in the block. The lightweight client can use this merkle path to connect the transaction to the block header and verify that the transaction is included in the block. The lightweight client also uses the block header to link the block to the rest of the blockchain. The combination of these two links, between the transaction and block and between the block and blockchain, proves that the transaction is recorded in the blockchain. All in all, the lightweight client will have received less than a kilobyte of data for the block header and merkle path, an amount of data that is more than a thousand times less than a full block (about 2 MB ((("blockchain", "merkle trees", startref="blockchain-merkle")))((("merkle trees", startref="merkle-tree-explain")))currently). === Bitcoin's Test Blockchains You might be surprised to learn that there is more than one blockchain used with Bitcoin. The "main" Bitcoin blockchain, the one created by Satoshi Nakamoto on January 3rd, 2009, the one with the genesis block we studied in this chapter, is ((("mainnet")))called _mainnet_. There are other Bitcoin blockchains that are used for testing purposes: at this time _testnet_, _signet_, and _regtest_. Let's look at each in turn. ==== Testnet: Bitcoin's Testing Playground Testnet is ((("blockchain", "test blockchains", "testnet", id="blockchain-test-testnet")))((("test blockchains", "testnet", id="test-block-testnet")))((("testnet", id="testnet")))the name of the test blockchain, network, and currency that is used for testing purposes. The testnet is a fully featured live P2P network, with wallets, test bitcoins (testnet coins), mining, and all the other features of mainnet. The most important difference is that testnet coins are meant to be worthless. Any software development that is intended for production use on Bitcoin's mainnet can first be tested on testnet with test coins. This protects both the developers from monetary losses due to bugs and the network from unintended behavior due to bugs. The current testnet is called _testnet3_, the third iteration of testnet, restarted in February 2011 to reset the difficulty from the previous testnet. Testnet3 is a large blockchain, in excess of 30 GB in 2023. It will take a while to sync fully and use up resources on your computer. Not as much as mainnet, but not exactly "lightweight" either. [TIP] ==== Testnet and the other test blockchains described in this book don't use the same address prefixes as mainnet addresses to prevent someone from accidentally sending real bitcoins to a test address. Mainnet addresses begin with +1+, +3+, or +bc1+. Addresses for the test networks mentioned in this book begin with +m+, +n+, or +tb1+. Other test networks, or new protocols being developed on test networks, may use other address prefixes or alterations. ==== ===== Using testnet Bitcoin Core, like((("Bitcoin Core", "testnet"))) many other Bitcoin programs, has full support for operation on testnet as an alternative mainnet. All of Bitcoin Core's functions work on testnet, including the wallet, mining testnet coins, and syncing a full testnet node. [role="less_space pagebreak-before"] To start Bitcoin Core on testnet instead of mainnet you use the +testnet+ switch: ---- $ bitcoind -testnet ---- In the logs you should see that bitcoind is building a new blockchain in the +testnet3+ subdirectory of the default bitcoind directory: ---- bitcoind: Using data directory /home/username/.bitcoin/testnet3 ---- To connect to bitcoind, you use the +bitcoin-cli+ command-line tool, but you must also switch it to testnet mode: ---- $ bitcoin-cli -testnet getblockchaininfo { "chain": "test", "blocks": 1088, "headers": 139999, "bestblockhash": "0000000063d29909d475a1c[...]368e56cce5d925097bf3a2084370128", "difficulty": 1, "mediantime": 1337966158, "verificationprogress": 0.001644065914099759, "chainwork": "[...]000000000000000000000000000000000000000000044104410441", "pruned": false, "softforks": [ [...] ---- You can also run on testnet3 with other full-node implementations, such as +btcd+ (written in Go) and +bcoin+ (written in JavaScript), to experiment and learn in other programming languages and frameworks. Testnet3 supports all the features of mainnet, including segregated witness v0 and v1 (see <> and <>). Therefore, testnet3 can also be used to test segregated witness features. ===== Problems with testnet Testnet doesn't just use the same data structures as Bitcoin, it also uses almost exactly the same proof-of-work security mechanism as Bitcoin. The notable differences for testnet are that its minimum difficulty is half that of Bitcoin and that it's allowed to include a block at the minimum difficulty if that block's timestamp is more than 20 minutes after the previous block. Unfortunately, Bitcoin's PoW security mechanism was designed to depend on economic incentives--incentives which don't exist in a test blockchain that is forbidden from having value. On mainnet, miners are incentivized to include user transactions in their blocks because those transactions pay fees. On testnet, transactions still contain something called fees, but those fees don't have any economic value. That means the only incentive for a testnet miner to include transactions is because they want to help users and developers to test their software. Alas, people who like to disrupt systems often feel a stronger incentive, at least in the short term. Because PoW mining is designed to be permissionless, anyone can mine, whether their intention is good or not. That means disruptive miners can create many blocks in a row on testnet without including any user transactions. When those attacks happen, testnet becomes unusable for users and ((("blockchain", "test blockchains", "testnet", startref="blockchain-test-testnet")))((("test blockchains", "testnet", startref="test-block-testnet")))((("testnet", startref="testnet")))developers. ==== Signet: The Proof of Authority Testnet There's no ((("blockchain", "test blockchains", "signet", id="blockchain-test-signet")))((("test blockchains", "signet", id="test-block-signet")))((("signet", id="signet")))known way for a system dependent on permissionless PoW to provide a highly usable blockchain without introducing economic incentives, so Bitcoin protocol developers began considering alternatives. The primary goal was to preserve as much of the structure of Bitcoin as possible so that software could run on a testnet with minimal changes--but to also provide an environment that would remain useful. A secondary goal was to produce a reusable design that would allow developers of new software to easily create their own test networks. The solution implemented in Bitcoin Core and other software is called _signet_, as defined by BIP325. A signet is a test network where each block must contain proof (such as a signature) that the creation of that block was sanctioned by a trusted authority. Whereas mining in Bitcoin is permissionless--anyone can do it--mining on signet is fully permissioned. Only those with permission can do it. This would be a completely unacceptable change to Bitcoin's mainnet--no one would use that software--but it's reasonable on a testnet where coins have no value and the only purpose is testing software and systems. BIP325 signets are designed to make it very easy to create your own. If you disagree with how someone else is running their signet, you can start your own signet and connect your software to it. ===== The default signet and custom signets Bitcoin Core supports((("Bitcoin Core", "signet")))((("default signet")))((("custom signets"))) a default signet, which we believe to be the most widely used signet at the time of writing. It is currently operated by two contributors to that project. If you start Bitcoin Core with the +signet+ parameter and no other signet-related parameters, this is the signet you will be using. As of this writing, the default signet has about 150,000 blocks and is about a gigabyte in size. It supports all of the same features as Bitcoin's mainnet and is also used for testing proposed upgrades through the Bitcoin Inquisition project, which is a software fork of Bitcoin Core that's only designed to run on signet. If you want to use a different signet, called a _custom signet_, you will need to know the script used to determine when a block is authorized, called((("challenge script"))) the _challenge_ script. This is a standard Bitcoin script, so it can use features such as multisig to allow multiple people to authorize blocks. You may also need to connect to a seed node that will provide you with the addresses of peers on the custom signet. For example: ---- bitcoind -signet -signetchallenge=0123...cdef -signetseednode=example.com:1234 ---- As of this writing, we generally recommend that the public testing of mining software occur on testnet3 and that all other public testing of Bitcoin software occur on the default signet. To interact with your chosen signet, you can use the +-signet+ parameter with +bitcoin-cli+, similar to how you used testnet. For((("blockchain", "test blockchains", "signet", startref="blockchain-test-signet")))((("test blockchains", "signet", startref="test-block-signet")))((("signet", startref="signet"))) example: ---- $ bitcoin-cli -signet getblockchaininfo { "chain": "signet", "blocks": 143619, "headers": 143619, "bestblockhash": "000000c46cb3505ddd296537[...]ad1c5768e2908439382447572a93", "difficulty": 0.003020638517858618, "time": 1684530244, "mediantime": 1684526116, "verificationprogress": 0.999997961940662, "initialblockdownload": false, "chainwork": "[...]000000000000000000000000000000000000000000019ab37d2194", "size_on_disk": 769525915, "pruned": false, "warnings": "" } ---- ==== Regtest: The Local Blockchain Regtest, ((("blockchain", "test blockchains", "regtest", id="blockchain-test-regtest")))((("test blockchains", "regtest", id="test-block-regtest")))((("regtest", id="regtest")))which stands for "Regression Testing," is a Bitcoin Core feature that allows you to create a local blockchain for testing purposes. Unlike signet and testnet3, which are public and shared test blockchains, the regtest blockchains are intended to be run as closed systems for local testing. You launch a regtest blockchain from scratch. You may add other nodes to the network or run it with a single node only to test the Bitcoin Core software. To start ((("Bitcoin Core", "regtest")))Bitcoin Core in regtest mode, you use the +regtest+ flag: ---- $ bitcoind -regtest ---- Just like with testnet, Bitcoin Core will initialize a new blockchain under the _regtest_ subdirectory of your bitcoind default directory: ---- bitcoind: Using data directory /home/username/.bitcoin/regtest ---- [role="less_space pagebreak-before"] To use the command-line tool, you need to specify the +regtest+ flag too. Let's try the +getblockchaininfo+ command to inspect the regtest blockchain: ---- $ bitcoin-cli -regtest getblockchaininfo { "chain": "regtest", "blocks": 0, "headers": 0, "bestblockhash": "0f9188f13cb7b2c71f2a335e3[...]b436012afca590b1a11466e2206", "difficulty": 4.656542373906925e-10, "mediantime": 1296688602, "verificationprogress": 1, "chainwork": "[...]000000000000000000000000000000000000000000000000000002", "pruned": false, [...] ---- As you can see, there are no blocks yet. Let's create a default wallet, get an address, and then mine some (500 blocks) to earn the reward: ---- $ bitcoin-cli -regtest createwallet "" $ bitcoin-cli -regtest getnewaddress bcrt1qwvfhw8pf79kw6tvpmtxyxwcfnd2t4e8v6qfv4a $ bitcoin-cli -regtest generatetoaddress 500 \ bcrt1qwvfhw8pf79kw6tvpmtxyxwcfnd2t4e8v6qfv4a [ "3153518205e4630d2800a4cb65b9d2691ac68eea99afa7fd36289cb266b9c2c0", "621330dd5bdabcc03582b0e49993702a8d4c41df60f729cc81d94b6e3a5b1556", "32d3d83538ba128be3ba7f9dbb8d1ef03e1b536f65e8701893f70dcc1fe2dbf2", ..., "32d55180d010ffebabf1c3231e1666e9eeed02c905195f2568c987c2751623c7" ] ---- It will only take a few seconds to mine all these blocks, which certainly makes it easy for testing. If you check your wallet balance, you will see that you earned the rewards for the first 400 blocks (coinbase rewards must be 100 blocks deep before you can ((("blockchain", "test blockchains", "regtest", startref="blockchain-test-regtest")))((("test blockchains", "regtest", startref="test-block-regtest")))((("regtest", startref="regtest")))spend them): ---- $ bitcoin-cli -regtest getbalance 12462.50000000 ---- === Using Test Blockchains for Development Bitcoin's ((("blockchain", "test blockchains", "development usage")))((("test blockchains", "development usage")))various blockchains (regtest, signet, testnet3, mainnet) offer a range of testing environments for bitcoin development. Use the test blockchains whether you are developing for Bitcoin Core or another full-node consensus client; developing an application such as a wallet, exchange, ecommerce site; or even developing novel smart contracts and complex scripts). You can use the test blockchains to establish a development pipeline. Test your code locally on a regtest as you develop it. Once you are ready to try it on a public network, switch to signet or testnet to expose your code to a more dynamic environment with more diversity of code and applications. Finally, once you are confident your code works as expected, switch to mainnet to deploy it in production. As you make changes, improvements, bug fixes, etc., start the pipeline again, deploying each change first on regtest, then on signet or testnet, and finally into production. Now that we know what data the blockchain contains and how cryptographic commitments securely tie the various parts together, we will look at the special commitment that both provide computational security and ensure no block can be changed without invalidating all other blocks built on top of it: Bitcoin's mining function.