Chapter 4. How Bitcoin stays honest without a boss
Every number in the book has a source. To keep the book short, the notes live here instead of in print. Each source is listed with the section of the book it supports and the words it backs up, in the order they appear in the chapter. Web addresses are links; a page may have moved since the date shown.
The chapter page · Chapter 3 sources · All chapters · Chapter 5 sources
(opening): “ought to find it more profitable to play by the rules” · Satoshi’s challenge: handing out new money fairly: “provides a way to initially distribute coins into circulation”
Satoshi Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System,” 2008, section 6, Incentive.
Keys: the mailbox and the stamp: “without ever seeing the key. That stamp is a digital signature”
Satoshi Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System,” bitcoin.org, 2008, sections 2, 3, 4 and 6. Schnorr signatures: BIP 340, activated November 2021.
Keys: the mailbox and the stamp: “The fingerprint of “Hello” with a capital H begins 185f8db3.”
SHA-256 outputs for “Hello” and “hello,” reproducible with any standard SHA-256 tool.
Nodes check: “As of October 2026, roughly 26,000 reachable nodes existed worldwide”
Reachable nodes: Bitnodes (btcnodes.io), reachable node snapshot of September 28, 2026 (25,799 nodes), retrieved September 2026; Coin Dance, coin.dance/nodes, retrieved September 2026 (25,620 nodes). Ledger size: Blockchain.com blockchain size chart, via YCharts, 771.7 gigabytes on September 28, 2026, retrieved September 2026.
The difficulty adjustment: the rule that keeps the clock: “The next adjustment made the puzzle easier by about 28%”
Cambridge Centre for Alternative Finance, mining map and hashrate data, 2021; the difficulty adjustment of July 3, 2021 lowered difficulty by about 28%, the largest downward adjustment on record, per public block data at mempool.space.
Why honesty pays: “A 2024 estimate put the hardware alone at more than $20 billion”
Lucas Nuzzi, Kyle Waters and Matias Andrade, “Breaking BFT: Quantifying the Cost to Attack Bitcoin and Ethereum,” Coin Metrics, February 15, 2024 (SSRN 4727999): about 7 million ASIC machines, at a cost of more than $20 billion, as of early 2024.
Why honesty pays: “the subsidy was 3.125 bitcoin per block, about 144 blocks a day”
Block subsidy: Bitcoin Core source, GetBlockSubsidy in src/validation.cpp and nSubsidyHalvingInterval (210,000) in src/kernel/chainparams.cpp, github.com/bitcoin/bitcoin, retrieved September 2026. Daily block count: six blocks an hour times 24 hours; block 945,000 (mempool.space/block/945000) shows the 3.125 subsidy in 2026.
Why honesty pays: “Bitcoin Gold in 2018 and Ethereum Classic in 2020 both suffered 51% attacks.”
Bitcoin Gold, “Double Spend Attack on Exchanges,” forum.bitcoingold.org, May 2018 (attacks began May 18, 2018). Ethereum Classic: three attacks in August 2020, on August 1, in the first week of August, and on August 29; CoinDesk, “Ethereum Classic Hit by Third 51% Attack in a Month,” August 29, 2020, with the ETC Cooperative’s statement.
A real block: “Block number 945,000 was mined on April 14, 2026.”
Block 945,000: mempool.space/block/945000, retrieved September 2026. Mined April 14, 2026, 07:35 UTC; 3,994 transactions; 1.867 megabytes; Foundry USA; subsidy 3.125 bitcoin plus 0.01672 bitcoin in fees.
The halving: “Then 25 from November 28, 2012, 12.5 from July 9, 2016”, “roughly 95% of all the bitcoin that will ever exist had already been created”
Halving dates and heights: blocks 210,000 (November 28, 2012), 420,000 (July 9, 2016), 630,000 (May 11, 2020) and 840,000 (April 19, 2024, US time), from any block explorer; see also Blockstream Help Center, “What is the Bitcoin halving?”, retrieved September 2026. Share mined: the twenty-millionth bitcoin was created at block 939,999 on March 9, 2026 (The Block, March 9, 2026, citing on-chain data); by the subsidy schedule, about 20.09 million bitcoin, 95.7% of the cap, existed at block 969,000 in late September 2026.
Satoshi’s challenge: handing out new money fairly: “Researchers estimate Satoshi mined about a million bitcoin”
Estimate of Satoshi’s early mining: Sergio Demian Lerner, “The Well Deserved Fortune of Satoshi Nakamoto, Bitcoin creator, Visionary and Genius,” Bitslog, April 2013, and later analyses of the same “Patoshi” pattern, which put the total near 1 million to 1.1 million bitcoin. These are estimates from block data, not a confirmed figure.
Who writes the code: “It is maintained by roughly 200 volunteer contributors spread across the world”, “Much of the money, though, traces back to one donor, Jack Dorsey”
Contributor count: Bitcoin Core 30.0 release notes, bitcoin.org/en/releases/30.0, October 10, 2025, credit 197 contributors to that release. Funders: Brink, “Brink’s 2025 Annual Report,” brink.dev, May 26, 2026 (eight engineers funded in 2025); Spiral, Chaincode Labs, OpenSats and the Human Rights Foundation Bitcoin Development Fund, from each organization’s own site; 1A1z, “Funding Bitcoin,” October 23, 2024 (OpenSats and Spiral gave 62% of 2023 grant funding), as reported by Bitcoin Magazine, October 24, 2024.
Who writes the code: “On November 8, 2017, its organizers called it off.” · Worth repeating: “in November the organizers withdrew it in a short email”
Miner and company support: Digital Currency Group, “Bitcoin Scaling Agreement at Consensus 2017,” dcgco.medium.com, May 2017 (58 companies in 22 countries, 83.28% of hashing power). Suspension: Mike Belshe, Wences Casares, Jihan Wu, Jeff Garzik, Peter Smith and Erik Voorhees, “Segwit2x Final Steps,” email to the bitcoin-segwit2x mailing list, lists.linuxfoundation.org, November 8, 2017.
A fair objection: “the two largest pools, Foundry USA and AntPool, together found nearly half”, “When one pool briefly passed half the network in June 2014, miners left it”
Mining pool shares: mempool.space mining pool statistics, 1-year view, retrieved September 2026 (Foundry USA 28.3% and AntPool 18.0% of 52,225 blocks). GHash.io: CoinDesk, “The Bitcoin Mining Arms Race: GHash.io and the 51% Issue,” July 17, 2014 (about 55% of hash rate on June 12 and 13, 2014; 34.6% by July 13, 2014; pledge to stay below 40%).
Proof of work, without the math
Network hash rate: Blockchain.com hash rate chart, via YCharts, 963.5 exahashes per second on September 27, 2026, with daily readings between about 800 and 1,045 exahashes per second in August and September 2026; CoinWarz Bitcoin hashrate chart, retrieved September 2026.
How long SegWit and Taproot took: “SegWit in 2017 and Taproot in 2021 were soft forks.” (now on the chapter page, under More from this chapter)
BIP 141 (Segregated Witness, 2017); BIP 341 (Taproot, 2021).
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