Post by twetch#6113

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

1: public ledger (blockchain), 2: cryptography (encryption), 3: miners (nodes).

Miners expend energy in a competitive (Decentralized) network for the self-interested goal of adding a new block to the public ledger

This expenditure of energy is done through the computation of a cryptographic hash; a one-way process that turns a signal into noise that is unique to that signal, like a fingerprint. The higher the difficulty, the more hashes must be computed.

Asymmetric encryption : private key (encryption) births a public key (decryption). This is a one-way computational process, you can derive a public key from a private key, but not a private key from a public key

The difficulty is tied to block frequency. If more miners compete on the network (expending more energy), the difficulty will increase so that the blocks are properly spaced (around 1block/10min), and more hashes are required to find the next valid hash.