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Blockchain technology is the backbone of cryptocurrency, providing a secure and transparent way of tracking and recording digital transactions. The name "Blockchain" comes from the fact that it consists of blocks of data linked together in a chain.
Blockchain blocks are the data structures where transactions are permanently recorded. Each block holds some or all of the recent transactions that have not yet been verified by the network. After verification, the block is closed and a new one is created to store new transactions.
The information stored in a block is permanent and cannot be changed or deleted. This ensures the integrity and immutability of the Blockchain, providing a secure and transparent record-keeping system for financial transactions.
In a Blockchain network, a large volume of transactions occur and keeping track of them is crucial for the system to function properly. The transactions made during a given period are recorded into a file called a block, which forms the foundation of the Blockchain network.
A block stores important information about the transactions and does not take up a significant amount of storage space. The elements that a block typically includes are:
The transaction element is the largest, followed by the block header, which comprises sub-elements such as the version of the cryptocurrency being used, the hash of the previous block's header, the hash of transactions in the Merkle tree (data structure used for data verification and synchronization) of the current block, a timestamp, the difficulty rating of the target hash, and the encrypted number known as the nonce.
The nonce is the key to closing the block and is solved by a miner through a process of guessing. The miner's program uses random numbers to try and guess the nonce in the hash. When a nonce is verified, the hash is solved and the network closes the block, creating a new one with a header. This process repeats continuously.
Contrary to popular belief, not all blockchains contain numerous types of blocks. Unlike conventional data structures, the number of blocks in a blockchain can expand continuously as new blocks are added to the chain. So, let's delve into the three types of blocks found in blockchain systems.
The genesis block is the starting block of a blockchain, serving as the foundation for all subsequent blocks. It was created by Satoshi Nakamoto in Bitcoin's creation and links to the previous block, maintaining the blockchain's immutability through the use of technologies like the Merkle tree.
Despite its verification depending on the scenario, the genesis block remains the backbone of the blockchain, allowing network nodes to synchronize by having matching genesis blocks and enhancing security in the distributed transaction ledger.
Valid blocks are crucial to blockchain networks. They are the blocks that have been authorized by the network and have solved a cryptographic challenge, ensuring their validity. After network consensus is reached, the blocks are added to the blockchain and distributed to all nodes, who serve as verification points.
Valid blocks hold verified transactions and have a structured data format that includes information such as the coinbase, transaction data, timestamp, Merkle Root, and block hash, ensuring public verification and secure transactions within the blockchain.
Orphan blocks are blocks in a blockchain that don't belong to the main chain. This happens when two miners create blocks at the same time. While they are not crucial to the blockchain, they can be dangerous if a hacker creates them to reverse a transaction.
The network consensus chooses which blocks to add to the chain and which to orphan. The longest chain with the most transactions is usually selected, making security simple. But if a hacker has over 50% of the mining power, they may try to reverse it. However, this power is not needed to create an orphan block, and the network consensus keeps the blocks secure from hacking.
A block in Blockchain technology is a collection of verified transactions stored in a secure, tamper-proof manner. By connecting blocks together in a chain, the Blockchain provides a permanent and immutable record of all previous transactions. The tamper-proof nature of the Blockchain makes it an ideal solution for financial transactions, voting systems, and other applications that require secure and transparent record-keeping.
Take this Quiz to test your Blockchain Knowledge. The minimum score to pass the Quiz is 70% of correct answers.
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