bitcoinbook/ch02_overview.adoc

[[ch02_bitcoin_overview]]
== Come funziona Bitcoin

Bitcoin, a differenza dei tradizionali sistemi bancari e di pagamento, non richiede di riporre fiducia in terze parti. Invece di dover fare affidamento su un’autorità centrale affidabile, con Bitcoin ogni utente può utilizzare un software in esecuzione sul proprio computer per verificare il corretto funzionamento di ogni aspetto del sistema. In questo capitolo esamineremo Bitcoin da un punto di vista generale, seguendo una transazione nel sistema e osservando come viene registrata sulla blockchain, il registro distribuito di tutte le transazioni. Nei capitoli successivi approfondiremo la tecnologia alla base delle transazioni, della rete e((("Bitcoin", "operational overview", id="bitcoin-operational-overview-ch2")))((("blockchain explorers", id="blockchain-explorers"))) del mining.


=== Panoramica di Bitcoin

++++
<p class="fix_tracking">
Il sistema Bitcoin è composto da utenti dotati di wallet contenenti chiavi, da transazioni che vengono distribuite attraverso la rete e da miner che producono (attraverso un calcolo competitivo) la blockchain di consenso, che rappresenta il registro ufficiale di tutte le transazioni.
</p>

<p class="fix_tracking2">
Ogni esempio in questo capitolo si basa su una transazione reale effettuata sulla rete Bitcoin, simulando le interazioni tra diversi utenti inviando fondi da un wallet all'altro. Durante il tracciamento di una transazione nella rete Bitcoin sulla blockchain, utilizzeremo un blockchain explorer per visualizzare ogni fase. Un blockchain explorer è un'applicazione web che funziona come un motore di ricerca per Bitcoin, consentendo di cercare indirizzi, transazioni e blocchi, e di osservare le relazioni e i flussi tra di essi.
</p>
++++

Tra i blockchain explorer più popolari ci sono:
* https://blockstream.info[Blockstream Explorer]
* https://mempool.space[Mempool.Space]
* https://live.blockcypher.com[BlockCypher Explorer]

Ognuno di questi strumenti dispone di una funzione di ricerca che consente di inserire un indirizzo Bitcoin, un hash di transazione, un numero di blocco o un hash di blocco per recuperare le informazioni corrispondenti dalla rete Bitcoin. Per ogni esempio di transazione o blocco, forniremo un URL che ti permetterà di visualizzarlo direttamente e studiarlo dettagliatamente.

[[block-explorer-privacy]]
.Block Explorer Privacy Warning
[WARNING]
====
Searching information((("privacy", "blockchain explorers"))) on a block explorer may disclose to its operator
that you're interested in that information, allowing them to associate
it with your IP address, browser details, past searches, or other
identifiable information.  If you look up the transactions in this book,
the operator of the block explorer might guess that you're learning
about Bitcoin, which shouldn't be a problem.  But if you look up your
own transactions, the operator may be able to guess how many bitcoins
you've received, spent, and ((("Bitcoin", "operational overview", startref="bitcoin-operational-overview-ch2")))((("blockchain explorers", startref="blockchain-explorers")))currently own.
====

[[spending_bitcoin]]
=== Comprare da un negozio online
Alice, (((("transactions", "spending bitcoins", id="transaction-spend")))) (((("bitcoins", "spending", id="bitcoin-spend")))) (((("spending bitcoins", id="spend-bitcoin"))))introdotta nel capitolo precedente, è una nuova utente che ha appena acquistato i suoi primi bitcoin. In <<Comprare_i_tuoi_primi_Bitcoin>>, Alice ha incontrato il suo amico Joe per scambiare del denaro contante con bitcoin. Da allora, ha acquistato altri bitcoin. Ora è pronta a effettuare la sua prima transazione di spesa, acquistando l’accesso a un episodio premium di un podcast dal negozio online di Bob.

Il negozio online di Bob ha recentemente iniziato ad accettare pagamenti in bitcoin, aggiungendo questa opzione al proprio sito web. I prezzi nell'e-commerce di Bob sono indicati nella valuta locale (dollari statunitensi), ma al momento del pagamento i clienti possono scegliere se pagare in dollari o in bitcoin.

Alice trova l'episodio del podcast che vuole acquistare e procede alla pagina di pagamento. Qui le viene offerta la possibilità di pagare con bitcoin, oltre alle opzioni tradizionali. Il carrello mostra il prezzo sia in dollari sia in bitcoin (BTC), calcolato in base al tasso di cambio corrente di Bitcoin.

Il sistema di pagamento dell'e-commerce di Bob genera automaticamente un codice QR (((("invoices")))) (((("QR codes")))) contenente un _ordine di pagamento_ (<<invoice-QR>>).

////
TODO: Replace QR code with test-BTC address
////

[[invoice-QR]]
.Codice QR di un ordine di pagamento.
image::images/mbc3_0201.png["payment-request"]

A differenza di un codice QR che contiene semplicemente un indirizzo Bitcoin di destinazione, questo ordine di pagamento è un URI codificato in QR che include un indirizzo di destinazione, un importo di pagamento e una descrizione.
Questo permette all'applicazione del wallet Bitcoin di precompilare le informazioni necessarie per inviare il pagamento, mostrando contemporaneamente una descrizione leggibile dall'utente. Puoi scansionare il codice QR con un'applicazione wallet Bitcoin per vedere ciò che vedrebbe Alice:


[[invoice-URI]]
.Il codice QR dell'ordine di pagamento codifica il seguente URI, definito in BIP21:
----
bitcoin:bc1qk2g6u8p4qm2s2lh3gts5cpt2mrv5skcuu7u3e4?amount=0.01577764&
label=Bob%27s%20Store&
message=Purchase%20at%20Bob%27s%20Store

Components of the URI

A Bitcoin address: "bc1qk2g6u8p4qm2s2lh3gts5cpt2mrv5skcuu7u3e4"
The payment amount: "0.01577764"
A label for the recipient address: "Bob's Store"
A description for the payment: "Purchase at Bob's Store"
----

[TIP]
====
Try to scan this with your wallet to see
the address and amount but DO NOT SEND MONEY.
====

Alice usa il suo smartphone per scansionare il codice a barre visualizzato. Sullo schermo del suo smartphone compare un ordine di pagamento per l'importo corretto destinato a +Bob's Store+ e lei seleziona Invia per autorizzarlo.
Nel giro di pochi secondi (più o meno lo stesso tempo necessario per l'autorizzazione di una carta di credito), Bob vede la transazione registrata nel sistema.

[NOTE]
====
The
Bitcoin network((("bitcoins", "fractional values")))((("fractional values of bitcoins")))((("satoshis")))((("millibitcoins"))) can transact in fractional values, e.g., from
millibitcoin (1/1000th of a bitcoin) down to 1/100,000,000th of a
bitcoin, which is known as a satoshi.  This book uses the same
pluralization rules used for dollars and other traditional currencies
when talking about amounts greater than one bitcoin and when using
decimal notation, such as "10 bitcoins" or "0.001 bitcoins."  The same
rules also apply to other bitcoin bookkeeping units, such as
millibitcoins and satoshis.
====

Si può usare un blockchain explorer per esaminare i dati presenti sulla blockcahin, come la((("transactions", "spending bitcoins", startref="transaction-spend")))((("bitcoins", "spending", startref="bitcoin-spend")))((("spending bitcoins", startref="spend-bitcoin"))) https://oreil.ly/hAeyh[transazione] effettuata da Alice.

Nei capitoli seguenti, esamineremo questa transazione più nel dettaglio. Vedremo come il wallet di Alice l'ha costruita, come è stata distribuita attraverso la rete, come è stata verificata e, infine, come Bob può spendere quell'importo in transazioni successive.

=== Transazioni Bitcoin
Una transazione(((("transactions", "defined")))((("bitcoins", "transactions", see="transactions")))) comunica alla rete che il proprietario di determinati bitcoin ha autorizzato il trasferimento di quel valore a un altro proprietario. Il nuovo proprietario può ora spendere i bitcoin creando un'altra transazione che autorizza il trasferimento a un altro destinatario, e così via, in una catena di proprietà.

==== Input e Output di una Transazione

Le transazioni((("transactions", "inputs", id="transaction-input-ch2")))((("transactions", "outputs", id="transaction-output-ch2")))((("inputs", id="input")))((("outputs", id="output"))) possono essere immaginate come delle righe in un registro contabile a partita doppia. Ogni transazione è composta da due parti principali: gli _input_ e gli _output_. Gli input rappresentano i fondi che qualcuno possiede e che intende spendere; in pratica, indicano da dove provengono i soldi utilizzati nella transazione. Gli output, invece, sono i destinatari dei fondi, ovvero coloro che riceveranno i soldi inviati. Di solito, la somma totale degli output è leggermente inferiore alla somma degli input, e questa differenza rappresenta una _commissione_ di transazione implicita(("transaction fees")), cioè un piccolo importo incassato dal miner che include la transazione nella blockchain. Una transazione Bitcoin è rappresentata come una voce del registro contabile nella figura <<partita_doppia_della_transazione>>

La transazione contiene anche una prova di proprietà per ciascuna quantità di bitcoin (input) che viene spesa. Questa prova è rappresentata da una firma digitale del proprietario, che chiunque può verificare autonomamente. Nel sistema Bitcoin, spendere significa firmare una transazione che trasferisce valore da una transazione precedente a un nuovo proprietario, identificato da un indirizzo Bitcoin.


[[partita_doppia_della_transazione]]
.Transaction as double-entry bookkeeping.
image::images/mbc3_0202.png["Transaction Double-Entry"]

==== Catene di Transazioni

Il pagamento di Alice al negozio di Bob utilizza come input l'output di una precedente transazione((("transaction chains", id="transaction-chains"))). Nel capitolo precedente, Alice aveva ricevuto dei bitcoin dal suo amico Joe in cambio di contanti. Abbiamo etichettato quella transazione come _Transazione 1_ (Tx1) in <<transaction-chain>>.

La transazione Tx1 ha inviato 0,001 bitcoin (100.000 satoshi) verso un output bloccato dalla chiave di Alice. La nuova transazione che Alice invia al negozio di Bob (Tx2) usa proprio quell'output precedente come input. Nell'immagine, questa relazione è mostrata usando una freccia e indicando l'input come "Tx1:0". In una transazione reale, questo riferimento sarebbe l'identificatore della transazione (txid), un valore di 32 byte che identifica la transazione con cui Alice ha ricevuto il denaro da Joe. L'indicazione ":0" indica la posizione precisa dell'output in cui Alice ha ricevuto i bitcoin: in questo caso, si tratta del primo output, che occupa la posizione 0.

Come mostrato, nelle transazioni reali di Bitcoin non viene incluso esplicitamente il valore dell'input. Per conoscere questo valore, il software deve utilizzare il riferimento presente nell'input per risalire all'output della transazione precedente che si sta spendendo.

La Tx2 di Alice contiene due nuovi output: uno paga 75.000 satoshi per il podcast e l’altro restituisce 20.000 satoshi ad Alice come resto.


////
@startditaa
      Transaction 1             Tx2                   Tx3
     Inputs  Outputs         In     Out           In      Out
   +-------+---------+   +-------+--------+    +-------+--------+
   |       |         |   |       | cDDD   |    |       |        |
<--+ Tx0꞉0 | 100,000 |<--+ Tx1꞉0 | 20,000 |  +-+ Tx2꞉1 | 67,000 |
   |       |         |   |       |        |  | |       |        |
   +-------+---------+   +-------+--------+  | +-------+--------+
   |       | cDDD    |   |       |        |  | |       |        |
   |       | 500,000 |   |       | 75,000 |<-+ |       |        |
   |       |         |   |       |        |    |       |        |
   +-------+---------+   +-------+--------+    +-------+--------+
        Fee꞉ (unknown)           Fee꞉ 5,000            Fee꞉ 8,000
@enddittaa
////

[[transaction-chain]]
.Una catena di transazioni, in cui l’output di una transazione diventa l’input di quella successiva.
image::images/mbc3_0203.png["Transaction chain"]

[TIP]
====
Serialized Bitcoin transactions--the data format that software uses for
sending transactions--encodes the value to transfer using an integer
of the smallest defined onchain unit of value.  When Bitcoin was first
created, this unit didn't have a name and some developers simply called
it the _base unit._  Later many users began calling this unit a
_satoshi_ (sat) in honor of Bitcoin's creator.  In <<transaction-chain>>
and some other illustrations in this book, we use satoshi values because
that's what the protocol itself ((("satoshis")))uses.
====

==== Making Change

Oltre a uno o più output((("transactions", "change output", id="transaction-change-output")))((("change output", id="change-output")))((("outputs", "change output", id="output-change"))) che pagano il destinatario dei bitcoin, molte transazioni includono anche un output che restituisce bitcoin a chi effettua il pagamento: questo si chiama output di _resto_ (change output).

Ciò avviene perché gli input delle transazioni, proprio come le banconote, non possono essere spesi parzialmente. Se in un negozio compri un oggetto da 5 dollari, ma usi una banconota da 20 dollari per pagarlo, ti aspetti di ricevere 15 dollari di resto. Lo stesso concetto si applica agli input delle transazioni Bitcoin. Se acquistassi qualcosa al costo di 5 bitcoin ma avessi a disposizione soltanto un input da 20 bitcoin, invieresti un output da 5 bitcoin al venditore e un output da 15 bitcoin di resto a te stesso (senza contare la commissione della transazione).
Le transazioni((("transactions", "inputs", id="transaction-input-ch2")))((("transactions", "outputs", id="transaction-output-ch2")))((("inputs", id="input")))((("outputs", id="output"))) possono essere immaginate come delle righe in un registro contabile a partita doppia. Ogni transazione è composta da due parti principali: gli *input* e gli *output*. Gli *input* rappresentano i fondi che qualcuno possiede e che intende spendere; in pratica, indicano da dove provengono i soldi utilizzati nella transazione. Gli *output*, invece, sono i destinatari dei fondi, ovvero coloro che riceveranno i soldi inviati. Di solito, la somma totale degli output è leggermente inferiore alla somma degli input, e questa differenza rappresenta una *commissione di transazione* implicita(("transaction fees")), cioè un piccolo importo incassato dal miner che include la transazione nella blockchain. Una transazione Bitcoin è rappresentata come una voce del registro contabile nella figura <<transaction-double-entry>>.

Nel protocollo Bitcoin, non c’è alcuna differenza tra un output di resto (e l’indirizzo a cui viene inviato, definito _indirizzo di resto_, o change address) e un output di pagamento.

È importante sottolineare che l’indirizzo di resto (change address) non deve necessariamente coincidere con l’indirizzo di input e, per motivi di privacy, spesso corrisponde a un nuovo indirizzo generato dal wallet del proprietario. In circostanze ideali, i due diversi utilizzi degli output ricorrono entrambi a indirizzi mai visti prima e appaiono identici, impedendo così a terze parti di stabilire quali output siano di resto e quali di pagamento. Tuttavia, a scopo illustrativo, abbiamo aggiunto un’ombreggiatura agli output di resto in <<transaction-chain>>.

Not every transaction has a change output.  Those that don't are ((("changeless transactions")))((("transactions", "changeless")))called
_changeless transactions_, and they can have only a single output.
Changeless transactions are only a practical option if the amount being
spent is roughly the same as the amount available in the transaction
inputs minus the anticipated transaction fee.  In <<transaction-chain>>,
we see Bob creating Tx3 as a changeless transaction that spends the
output he received in Tx2.

==== Coin Selection

Different wallets((("transactions", "coin selection")))((("coin selection in transactions")))((("selecting", "coins in transactions"))) use different strategies when choosing which
inputs to use in a payment, called _coin selection_.

They might aggregate many small
inputs, or use one that is equal to or larger than the desired payment.
Unless the wallet can aggregate inputs in such a way to exactly match
the desired payment plus transaction fees, the wallet will need to
generate some change. This is very similar to how people handle cash. If
you always use the largest bill in your pocket, you will end up with a
pocket full of loose change. If you only use the loose change, you'll
often have only big bills. People subconsciously find a balance between
these two extremes, and Bitcoin wallet developers strive to program this
balance.

==== Common Transaction Forms

A very ((("transactions", "common types", id="transaction-common-ch2")))common form of transaction is a simple payment. This type of
transaction has one input and two outputs and is shown in
<<transaction-common>>.

[[transaction-common]]
.Most common transaction.
image::images/mbc3_0204.png["Common Transaction"]

Another common form of transaction ((("consolidation transactions")))is a _consolidation transaction_, which spends several inputs
into a single output (<<transaction-consolidating>>). This represents
the real-world equivalent of exchanging a pile of coins and currency
notes for a single larger note. Transactions like these are sometimes
generated by wallets and businesses to clean up lots of smaller amounts.

[[transaction-consolidating]]
.Consolidation transaction aggregating funds.
image::images/mbc3_0205.png["Aggregating Transaction"]

Finally, another transaction form that is seen often on the
blockchain ((("payment batching")))is _payment batching_, which pays to multiple outputs
representing multiple recipients (<<transaction-distributing>>).
This type of transaction is sometimes used by commercial entities to
distribute funds, such as when processing payroll payments to multiple employees.

[[transaction-distributing]]
.Batch transaction distributing funds.
image::images/mbc3_0206.png["Distributing Transaction"]

=== Constructing a Transaction

Alice's wallet((("transactions", "constructing", id="transaction-construct"))) application contains all
the logic for selecting inputs and generating outputs to build a
transaction to Alice's specification. Alice only needs to choose a
destination, amount, and transaction fee, and the rest happens in the wallet
application without her seeing the details. Importantly, if a wallet
already knows what inputs it controls, it can construct transactions
even if it is completely offline.
Like writing a check at home and later sending it to the bank in an
envelope, the transaction does not need to be constructed and signed
while connected to the Bitcoin network.

==== Getting the Right Inputs

Alice's wallet
application ((("inputs", "constructing transactions")))will first have to find inputs that can pay the amount she
wants to send to Bob. Most wallets keep track of all the available
outputs belonging to addresses in the wallet. Therefore, Alice's wallet
would contain a copy of the transaction output from Joe's transaction,
which was created in exchange for cash (see <<getting_first_bitcoin>>).
A Bitcoin wallet application that runs on a full node actually
contains a copy of every confirmed transaction's ((("UTXOs (unspent transaction outputs)")))unspent outputs, called
_unspent transaction outputs_ (UTXOs).
However, because full nodes use more resources, many
user wallets run lightweight clients that track only the user's own
UTXOs.

In this case, this single
UTXO is sufficient to pay for the podcast. Had this not been the case,
Alice's wallet application might have to combine several
smaller UTXOs, like picking coins from a purse, until it could
find enough to pay for the podcast. In both cases, there might be a need
to get some change back, which we will see in the next section, as the
wallet application creates the transaction outputs (payments).


==== Creating the Outputs

A transaction output((("outputs", "constructing transactions"))) is
created with a
script that says something like, "This output is paid to whoever can
present a signature from the key corresponding to Bob's public address."
Because only Bob has the wallet with the keys corresponding to that
address, only Bob's wallet can present such a signature to later spend this
output. Alice will therefore _encumber_ the output value with a demand
for a signature from Bob.

This transaction will also include a second output ((("change output")))because Alice's
funds contain more money than the cost of the
podcast. Alice's change
output is created in the very same
transaction as the payment to Bob. Essentially, Alice's wallet breaks
her funds into two outputs: one to Bob and one back to herself. She can
then spend the change output in a subsequent transaction.

Finally, for the transaction to be processed by the network in a((("transaction fees"))) timely
fashion, Alice's wallet application will add a small fee. The fee is not
explicitly stated in the transaction; it is implied by the difference in value between
inputs and outputs.  This transaction fee is collected by the
miner as a fee for including the transaction in a block
that gets recorded on the blockchain.

[[transaction-alice-url]]
[TIP]
====
View the https://oreil.ly/GwBq1[transaction from Alice to Bob's Store].
====

==== Adding the Transaction to the Blockchain

The ((("transactions", "adding to blockchain", id="transaction-add-blockchain")))((("blockchain", "adding transactions to", id="blockchain-add-transaction")))transaction created by Alice's wallet application
contains everything necessary to confirm ownership of the funds and
assign new owners. Now, the transaction must be transmitted to the
Bitcoin network where it will become part of the blockchain. In the next
section we will see how a transaction becomes part of a new block and
how the block is mined. Finally, we will see how the new block, once
added to the blockchain, is increasingly trusted by the network as more
blocks are added.

===== Transmitting the transaction

Because the transaction contains all
the information necessary for it to be processed, it does not matter how or where it
is transmitted to the Bitcoin network. The Bitcoin network is a
peer-to-peer network, with each Bitcoin peer participating by
connecting to several other Bitcoin peers. The purpose of the Bitcoin
network is to propagate transactions and blocks to all participants.

===== How it propagates


Peers in ((("Bitcoin", "as peer-to-peer network", secondary-sortas="peer-to-peer network")))((("peer-to-peer networks, Bitcoin as")))the Bitcoin peer-to-peer network are programs that have both
the software logic and the data necessary for them to fully verify the
correctness of a new transaction.  The connections between peers are
often visualized as edges (lines) in a graph, with the peers themselves
being the nodes (dots).  For that reason, Bitcoin peers are commonly
called "full verification nodes," ((("full nodes")))or _full nodes_ for short.

Alice's wallet application can send the new
transaction to any Bitcoin node over any type of
connection: wired, WiFi, mobile, etc.  It can also send the transaction
to another program (such as a block explorer) that will relay it to a
node.  Her Bitcoin wallet does not have
to be connected to Bob's Bitcoin wallet directly and she does not have
to use the internet connection offered by Bob, though both those
options are possible too. Any Bitcoin node that receives a
valid transaction it has not seen before will forward it to
all other nodes to which it is connected, a propagation technique known
((("gossiping")))as _gossiping_. Thus, the transaction rapidly propagates out across the
peer-to-peer network, reaching a large percentage of the nodes within a
few seconds.

===== Bob's view

If Bob's Bitcoin wallet application is directly connected to Alice's
wallet application, Bob's wallet application might be the first to
receive the transaction. However, even if Alice's wallet sends the
transaction through other nodes, it will reach Bob's wallet within a few
seconds. Bob's wallet will immediately identify Alice's transaction as
an incoming payment because it contains an output redeemable by Bob's
keys. Bob's wallet application can also independently verify that the
transaction is well formed.  If Bob is using his own full node, his
wallet can further verify Alice's transaction only spends((("transactions", "constructing", startref="transaction-construct")))((("transactions", "adding to blockchain", startref="transaction-add-blockchain")))((("blockchain", "adding transactions to", startref="blockchain-add-transaction"))) valid UTXOs.

=== Bitcoin Mining

Alice's transaction((("mining", "operational overview", id="mining-operational-overview"))) is now propagated on the Bitcoin
network. It does not become part of the _blockchain_ until it is
included in a block by a process called _mining_ and that block has been
validated by full nodes. See
<<mining>> for a detailed explanation.

Bitcoin's system of counterfeit protection is based on computation.
Transactions are bundled((("transactions", "in blocks", secondary-sortas="blocks")))((("blocks"))) into _blocks_.  Blocks have a very small header
that must be formed in a very specific way, requiring an enormous
amount of computation to get right--but only a small amount of
computation to verify as correct.
The mining process serves two purposes in Bitcoin:

[role="less_space pagebreak-before"]
* Miners can only
receive honest income from creating blocks that follow all of((("consensus rules"))) Bitcoin's
_consensus rules_.  Therefore, miners are normally incentivized to
only include valid transactions in their blocks and the blocks they
build upon.  This allows users to optionally make a trust-based
assumption that any transaction in a block is a valid transaction.

* Mining currently creates new bitcoins in each block, almost like a central bank
printing new money. The amount of bitcoin created per block is limited
and diminishes with time, following a fixed issuance schedule.


Mining achieves a fine balance between cost and reward. Mining uses
electricity to solve a computational problem. A successful miner will
collect ((("rewards")))a _reward_ in the form of new bitcoins and transaction fees.
However, the reward will only be collected if the miner has only
included valid transactions, with the Bitcoin protocol's rules for
_consensus_ determining what is valid.  This delicate balance provides
security for Bitcoin without a central authority.

Mining is designed to be a decentralized lottery.  Each miner can create
their own lottery ticket by creating ((("candidate blocks")))a _candidate block_ that includes
the new transactions they want to mine plus some additional data fields.
The miner inputs their candidate into a specially designed algorithm that
scrambles((("hash functions"))) (or "hashes") the data, producing output that looks nothing
like the input data.  This _hash_ function will always produce the same
output for the same input--but nobody can predict what the output will
look like for a new input, even if it is only slightly different from a
previous input.  If the output of the hash function matches a template
determined by the Bitcoin protocol, the miner wins the lottery and
Bitcoin users will accept the block with its transactions as a
valid block.  If the output doesn't match the template, the miner makes
a small change to their candidate block and tries again.  As of this
writing, the number of candidate blocks miners need to try before finding
a winning combination is about 168 billion trillion.  That's also how
many times the hash function needs to be run.

However, once a winning combination has been found, anyone can verify
the block is valid by running the hash function just once.  That makes a
valid block something that requires an incredible amount of work to
create but only a trivial amount of work to verify.  The simple
verification process is able to probabalistically prove the work was
done, so the data necessary to generate that proof--in this case, the
block--is called((("proof-of-work algorithm"))) _proof of work (PoW)_.

Transactions are added to the new block, prioritized by the highest fee rate
transactions first and a few other criteria. Each miner starts the
process of mining a new candidate block of transactions as soon as they receive the
previous block from the network, knowing that some other miner won that
iteration of the lottery.  They immediately create a new candidate block
with a commitment to the previous block, fill it with transactions, and start
calculating the PoW for the candidate block. Each miner includes a
special transaction in their candidate blocks, one that pays their own Bitcoin address
the block reward plus the sum of
transaction fees from all the transactions included in the candidate block. If they
find a solution that makes the candidate into a valid block, they receive this reward
after their successful block is added to the global blockchain and the
reward transaction they included becomes spendable. Miners who participate in a mining pool have set up their
software to create candidate blocks that assign the reward to a pool address.
From there, a share of the reward is distributed to members of the pool
miners in proportion to the amount of work they contributed.

Alice's
transaction was picked up by the network and included in the pool of
unverified transactions. Once validated by a full node, it was
included in a candidate block.
Approximately five minutes after the transaction was first transmitted
by Alice's wallet, a miner finds a solution for the
block and announces it to the network. After each other miner
validates the winning block, they start a new lottery to generate the next
block.

The winning block containing Alice's transaction became part of the
blockchain. The block containing Alice's transaction is counted as ((("confirmations")))((("clearing transactions")))((("transactions", "clearing")))one
_confirmation_ of that transaction.  After the block containing Alice's
transaction has propagated through the network, creating an alternative
block with a different version of Alice's transaction (such as a
transaction that doesn't pay Bob) would require performing the same
amount of work as it will take all Bitcoin miners to create an entirely
new block.  When there are multiple alternative blocks to choose from,
Bitcoin full nodes choose the chain of valid blocks with the most total
PoW, called the _best blockchain_.  For the entire network to
accept an alternative block, an additional new block would need to be
mined on top of the alternative.

That means miners have a choice.  They can work with Alice on an
alternative to the transaction where she pays Bob, perhaps with
Alice paying miners a share of the money she previously paid Bob.  This
dishonest behavior will require they expend the effort required to
create two new blocks.  Instead, miners who behave honestly can create a
single new block and receive all of the fees from the transactions
they include in it, plus the block subsidy.  Normally, the high cost of
dishonestly creating two blocks for a small additional payment is much
less profitable than honestly creating a new block, making it unlikely
that a confirmed transaction will be deliberately changed.  For Bob, this
means that he can begin to believe that the payment from Alice can be
relied upon.

[TIP]
====
You can see the block that includes
https://oreil.ly/7v_lH[Alice's transaction].
====

Approximately 19 minutes
after the block containing Alice's transaction is broadcast, a new block
is mined by another miner. Because this
new block is built on top of the block that contained Alice's
transaction (giving Alice's transaction two confirmations), Alice's
transaction can now only be changed if two alternative blocks are
mined--plus a new block built on top of them--for a total of three
blocks that would need to be mined for Alice to take back the money she
sent Bob.  Each block mined on top of the one containing Alice's
transaction counts as an additional confirmation.  As the blocks pile on
top of each other, it becomes harder to reverse the transaction, thereby
giving Bob more and more confidence that Alice's payment is secure.

In <<block-alice1>>,  we can see the block that contains Alice's transaction. Below it are
hundreds of thousands of blocks, linked to each other in a chain of
blocks (blockchain) all the way back to block #0, known as((("genesis block"))) the _genesis
block_. Over time, as the "height" of new blocks increases, so does the
computation difficulty for the chain as a whole.
By convention, any block with more than six confirmations
is considered very hard to change, because it would require an immense amount of
computation to recalculate six blocks (plus one new block). We will examine
the process of mining and the way it builds confidence in more ((("mining", "operational overview", startref="mining-operational-overview")))detail in
<<mining>>.

[[block-alice1]]
.Alice's transaction included in a block.
image::images/mbc3_0207.png["Alice's transaction included in a block"]

[role="less_space pagebreak-before"]
=== Spending the Transaction

Now((("transactions", "spending bitcoins", id="transaction-spend2")))((("bitcoins", "spending", id="bitcoin-spend2")))((("spending bitcoins", id="spend-bitcoin2"))) that Alice's
transaction has been embedded in the blockchain as part of a block, it
is visible to all Bitcoin
applications. Each Bitcoin full node can independently verify the
transaction as valid and spendable. Full nodes validate every transfer
of the funds from the moment the bitcoins were first generated in
a block through each subsequent transaction until they reach
Bob's address. Lightweight clients can partially verify payments
by confirming that the
transaction is in the blockchain and has several blocks mined after it,
thus providing assurance that the miners expended significant effort
committing to it (see <<spv_nodes>>).

Bob can now spend the output from this and other transactions. For
example, Bob can pay a contractor or supplier by transferring value from
Alice's podcast payment to these new owners.
As Bob spends the payments received from Alice and other customers, he
extends the chain of transactions. Let's assume that Bob pays his web
designer Gopesh
for a new website page. Now the chain of transactions will
look like <<block-alice2>>.

[[block-alice2]]
.Alice's transaction as part of a transaction chain from Joe to Gopesh.
image::images/mbc3_0208.png["Alice's transaction as part of a transaction chain"]

In this chapter, we saw how transactions build a chain that moves value
from owner to owner. We also tracked Alice's transaction from the
moment it was created in her wallet, through the Bitcoin network, and to
the miners who recorded it on the blockchain. In the rest of this book,
we will examine the specific technologies behind wallets, addresses,
signatures, transactions, the network, and finally, mining.