Bitcoin Core
What is it & how to use it?
Bitcoin Core is the open-source software that runs the Bitcoin Network. The software performs numerous functions viz., enforcing network rules, downloading, validating, and sharing blocks to other, and function as a Bitcoin Wallet. It is the software the enforces all the consensus rules of the network. It is not owned or controlled by any single person, company or an entity, and was built and released by Satoshi Nakamoto in 2009.
Bitcoin core is the heartbeat that powers the entire Bitcoin Network. It is developed and worked on by thousands of hugely talented software engineers. These developers act as the sole protector of your bitcoin assets. You can read more at https://bitcoincore.org/ and the current release is Bitcoin Core 25.1. Bitcoin core runs on all Bitcoin Nodes in the Bitcoin Network.
Bitcoin Core vs Bitcoin
1. Bitcoin Network: Is the physical peer to peer network made up of all the nodes (computers) that communicate to each other all around the world.
2. Bitcoin: This is the actual cryptocurrency or coin of the Bitcoin Network, and is called BTC or bitcoin.
3. Bitcoin Blockchain: is the database that contains the entire history of all Bitcoin transaction since 2009.
Bitcoin Core is a multi-platform software, meaning supported on Windows, Mac, Linux, ARM, and many more.
It is fully contained, meaning it is a wallet and its own full node all in one.
Who runs or owns bitcoin core?
No one runs or own bitcoin core. It is truly decentralized software with no single developer or company that owns or runs it. Any proposal to change to the Bitcoin Core runs through BIP (Bitcoin Improvement Process) as depicted in the following diagram.
The BIP includes everything from security upgrades to new features like Segregated Witness and new types of addresses.
What happens to the Bitcoin Network, when there are changes/upgrades on the Bitcoin Core?
When software gets updated, users are forced to download and install it. However, in some cases, the update happens automatically. Nonetheless, with Bitcoin Core, each user has full control over what version they run.
But one should also note that new versions are fully backwards compatible with the older versions of the software. At any given time, the Bitcoin Network is composed of tens of thousands of nodes all running different versions of the software.
While developers are free to build and release new versions, the control over whether it gets installed and used is fully at the discretion of the node operators, and not the developers. The distribution of control (between the node operators, developers and also miners) ensures that each has to seek consensus with the others for a change to fully be accepted and rolled out to the network.
Installing & Setting up Bitcoin Core
You can go through the full guide https://bitcoin.org/en/full-node#what-is-a-full-node (Though using Bitcoin Core as your primary wallet is not recommended). To install, you can simply go to https://bitcoincore.org and download the version that fits your desire.
The following images show the GUI of a Bitcoin Core (the excerpts from the Bitcoin Core installation guide)
Bitcoin Core GUI
Bitcoin Core’s main function is to operate as a full node, enforcing the networks rules/consensus and relay information to other full nodes. The software has several features such as Bitcoin QT, which is the GUI for Bitcoin Core itself and an embedded wallet too. On the contrary, most people do not use the wallet part of Bitcoin Core due to its extremely long development cycle, it doesn’t have the latest and most up to date features.
Initial Block Download (IBD)
With the inception of bitcoin in 2009, the current size of the blockchain is 585 GB (as of 29th Sept, 2023). Once you have installed Bitcoin Core, you will need to go through a one-time Initial Block Download or IBD process. This is when the software downloads the entire Blockchain, one block at a time, and validates each and every transaction and every transaction writes back to the very First Genesis Block back in 2009.
You can imagine how long this will take including the storage space, bandwidth, processing power, and of course the time.
Can you mine with Bitcoin Core?
While initially, it was possible on a laptop having CPU using Bitcoin Core; with the increase of the hash rate of the network, it took more processing power to create a valid block.
With this, CPUs and GPUs were not powerful enough to mine, and thus, the shift to ASICs. ASICs are custom build chips that perform SHA 256, and they are what we call today, the bitcoin miners/nodes/machines. At their heart, they still run a version of Bitcoin Core, but do not have full copies of the Blockchain on them.
Therefore, the bottom line is, in order to mine bitcoin, you need a special hardware such as ASIC to join a mining pool using their software and not Bitcoin Core. The originally Bitcoin Core that was built to mine bitcoin, was removed in 2016, when ASICs made the CPUs obsolete.
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