9.4 Key Concepts in Bitcoin's Technology

1. Proof of Work:

2. • A mechanism that ensures security and consensus in the network by requiring miners to solve computationally intensive puzzles.

3. Cryptographic Time-Stamps:

4. • Used to secure the blockchain by linking blocks in a chronological order.

5. Difficulty Adjustment:

6. • A system that adjusts the complexity of mining puzzles to maintain a consistent block creation time.

7. Peer-to-Peer Network Architecture:

8. • Bitcoin operates on a decentralized network where nodes communicate directly with each other, without a central authority.

9. Hash Functions and Merkle Trees:

10. • Hash functions secure data by transforming it into a fixed-size string of characters. Merkle trees organize transactions in a block, allowing efficient and secure verification.

11. Public Key Cryptography:

12. • A cryptographic system that uses pairs of keys (public and private) for secure communication and transaction validation.

13. Block Subsidy and Halvening:

14. • Block subsidy is the reward miners receive for adding a new block. Halvening is an event that reduces the block subsidy by half, occurring approximately every four years.