Roughly every 2-10 minutes, a pair of stellar mass black holes merge somewhere in the Universe. A small fraction of these mergers are detected as individually resolvable gravitational-wave events by advanced detectors such as LIGO and Virgo. The rest contribute to a stochastic background. We derive the statistically optimal search strategy for a background of unresolved binaries. Our method applies Bayesian parameter estimation to all available data. Using Monte Carlo simulations, we demonstrate that the search is both safe and effective: it is not fooled by instrumental artefacts such as glitches, and it recovers simulated stochastic signals without bias. Given realistic assumptions, we estimate that the search can detect the binary black hole background with about one day of design sensitivity data versus $approx 40$ months using the traditional cross-correlation search. This framework independently constrains the merger rate and black hole mass distribution, breaking a degeneracy present in the cross-correlation approach. The search provides a unified framework for population studies of compact binaries, which is cast in terms of hyper-parameter estimation. We discuss a number of extensions and generalizations including: application to other sources (such as binary neutron stars and continuous-wave sources), simultaneous estimation of a continuous Gaussian background, and applications to pulsar timing.
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