Block
What Is a Block in Crypto
A block is a term describing a digital record of transactional data on a decentralized network. It is a fundamental part of a blockchain, a decentralized ledger that records all transactions across a network of computers. Each block includes a list of transactions that have been processed and verified. This structure forms the basis of blockchain technology, which supports the functioning of decentralized networks such as Bitcoin and Ethereum.
Each block in a blockchain has several key parts: a list of transactions, a timestamp, a cryptographic hash of the previous block, and a unique identifier called a nonce. The hash of the previous block links all blocks together in a sequence, creating a secure and unchangeable record of transactions. This design makes it very difficult for anyone to alter or tamper with the blockchain, ensuring the data's integrity and security.
How Does a Block Work
Adding a block to the blockchain involves several key steps: gathering transactions, validating them, and linking them cryptographically. When a user makes a transaction, like sending bitcoin to another user, the transaction is broadcast to the network. These transactions are collected into a pool of pending transactions, waiting to be validated by miners (in proof-of-work systems) or validators (in proof-of-stake systems).
Miners or validators then select transactions from this pool and begin the validation process. This involves checking that the sender has enough assets, the transaction is correctly signed, and it follows the network's rules. This step is crucial for preventing double-spending and ensuring each transaction's legitimacy. Once validated, these transactions are bundled into a new block. This block includes a header with a timestamp, the cryptographic hash of the previous block, and a nonce, which is a random value used in the mining process. The body of the block contains the list of validated transactions.
In proof-of-work systems like Bitcoin, miners compete to solve a complex mathematical problem based on the block's header. This process, known as mining, requires significant computational power. The first miner to solve the problem adds the new block to the blockchain and is rewarded with newly created cryptocurrency and transaction fees. In proof-of-stake systems like Ethereum, validators are chosen based on the number of coins they hold and are willing to "stake" as collateral. These validators add new blocks to the blockchain and are rewarded for their participation.
Once the miner or the validator confirms the block, it is broadcast to the network. Other nodes in the network verify the block's validity and then add it to their copy of the blockchain. The cryptographic hash of the new block becomes part of the header of the next block, linking the blocks together in an unbreakable chain. Each block is connected to the previous one through its hash, forming a chain of blocks (hence "blockchain"). If any block's data is altered, its hash would change, breaking the link to the next block and alerting the network to the tampering. This mechanism makes the blockchain highly secure and unchangeable, as altering one block would require re-mining or re-validating all subsequent blocks, an almost impossible task in large, decentralized networks.