In a blockchain environment, a block houses a set of approved transactions and is connected to the preceding block through a process called cryptography. These blocks combined make up the bedrock for a trustless and immutable blockchain network.
Each block acts as a digital repository that keeps the transaction information for the blockchain. As people make new transactions, they are collected and put into a block. When checked and approved by the network, the block is locked and attached to the previous one. This creates a chain of blocks where one block alteration affects all the others, helping to keep the data safe and immutable.
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What Makes Up Parts of A Block
The main goal of the blockchain network is to ensure the safe storage of user data and all transactions performed on the network. As earlier mentioned, these transactions are recorded in units called a block. But for a block to work properly within a blockchain, it needs more than just transactions.
The term “cryptocurrency” is derived from the word “cryptography” which plays a major role in safeguarding a network. When it comes to blocks, the type of cryptography used is called a hash function. This function turns all the block’s data into a special code, known as a hash. For clarity, a hash acts like a digital signature for the block.
This signature is also known as the block header. It contains important information such as the block version and the hash of the previous block, as well as the time it was created. In addition, it houses codes based on the transactions in the block, mining setting and a number called nonce.
How a Block in the Blockchain Works
A blockchain network operates and processes new transactions on a regular basis. These transactions and records are broken down and kept in units called blocks. For further context, a block can be likened to a page in a secure data book. Once a page is filled, it is safely locked and cannot be changed.
Furthermore, each page has two main sections: a header and a body. The header contains key details such as the page number, date, and a reference to the page. And the body is the main part of the page where all new records (transactions) are stored.
Even though several methods exist, blocks are reviewed and added to a blockchain using these two main methods:
- Proof-of-Work (PoW): Bitcoin mainly uses this method. In the PoW system, validators leverage computational methods to confirm transactions in a network.
- Proof-of-Stake (PoS): For PoS, validators lock up some of their cryptocurrency as a guarantee. They get a chance to validate new blocks and earn rewards in return. Networks like Ethereum use the PoS.
How are blocks added to a blockchain?
Blockchains use different systems, called consensus mechanisms, to confirm transactions and add new blocks. In the crypto industry, the most popular methods are PoW and PoS.
Bitcoin was the first major use of blockchain technology. It relies on a PoW system to generate new blocks and release new bitcoins. In this system, a validator uses a computational process called mining to confirm a block or transaction. Ethereum, on the other hand, uses the PoS system for block generation. In PoS, a validator is chosen based on the amount (stake) of the network token they own.
Authority is decentralized in a blockchain network. As such, the network as a whole is responsible for handling transactions and creating new coins.
Here is how a blockchain transaction would take place if someone wants to send 5 ETH to a friend:
Step 1: The Transaction is Created
The sender fills out a “form” with all the transaction details:
- Who they’re sending the ETH to (the friend’s address)
- How much ETH to send (5 ETH)
- A small extra fee (called “gas”) to pay for the transaction
- A digital signature to prove it’s really from them
This “form” is like a record sheet and gets sent to a waiting area called the mempool—a place where unconfirmed transactions wait their turn.
Step 2: Validators Pick It Up
Ethereum uses a system called Proof-of-Stake (PoS). Instead of miners using computers to solve puzzles (like Bitcoin), validators are randomly chosen to check and confirm new transactions. They do this by locking up some ETH as a promise to be honest.
A validator picks the pending transaction from the mempool and checks for the following:
- Is the digital signature correct?
- Does the sender really have 5 ETH to send?
- Is the gas fee enough?
Step 3: A New Page is Written
If everything checks out, the validator collects a group of valid transactions and writes them onto a new “page” (called a block). It is then forwarded to the digital repository (the blockchain) for safekeeping.
Step 4: The Network Reviews It
The new page is shared with all the other computers (called nodes) in the Ethereum network. These nodes verify everything to ensure the new block adheres to the rules.
Step 5: The Page is Locked In
If the network agrees that everything is correct, the new block is officially added to the Ethereum blockchain. Now, the transaction is permanent and public; it can’t be changed or deleted.
Step 6: Validator Receives the 5 ETH
The validator who is responsible for validating this transaction now earns a reward, which in this case is a bit of ETH plus the gas fees.
How Are Blocks Identified in a Blockchain?
Blocks can be recognized in different ways depending on the blockchain. Many use a system called “block height,” which shows the block’s position in the chain, such as Block 1, Block 2, and so on. Some blockchains also use a special code, like a block header or ledger header, which is often shown as a long string of letters and numbers.
Why Do Block Sizes Vary Across Blockchains?
A block’s size is always considered when designing a blockchain’. Bigger blocks can carry more transactions, but they also need more computer space and internet speed to handle. This can make it harder for people to run the network on their own devices. Smaller blocks process transactions at a faster and easier rate. However, there is a downside: smaller blocks are restricted to handling fewer transactions at once.
What Are the Future Uses of Blockchain?
Blockchain is not only used for digital coins. Today, there are many blockchains used for different purposes, and the technology is still growing. Networks like Bitcoin and Ethereum are being updated to work faster, cost less, and use less energy. This helps open the door for blockchain to be used in areas outside of just cryptocurrency.
Besides, other networks such as Solana and Tron have emerged as solutions to scalability and high costs associated with networks like ETH. Particularly, the Solana network allows builders to easily launch decentralized apps compared to other networks.
Conclusion
Blocks are immutable digital record holders that store a group of transaction records in a blockchain network. Each block is linked to the one before it using robust cryptographic methods, forming a chain that cannot be easily tampered with. These links are confirmed through systems like Proof of Work (PoW) or Proof of Stake (PoS), which help maintain trust and security. While issues like the scalability trilemma continue to limit performance and growth, the basic design of blocks remains a strong foundation for decentralized and reliable record-keeping.
