The Bitcoin Backbone Protocol with Chains of Variable Difficulty

Bitcoin’s innovative and distributedly maintained blockchain data structure hinges on the adequate degree of difficulty of so-called “proofs of work,” which miners have to produce in order for transactions to be inserted. Importantly, these proofs of work have to be hard enough so that miners have an opportunity to unify their views in the presence of an adversary who interferes but has bounded computational power, but easy enough to be solvable regularly and enable the miners to make progress. As such, as the miners’ population evolves over time, so should the difficulty of these proofs. Bitcoin provides this adjustment mechanism, with empirical evidence of a constant block generation rate against such population changes.