Table of Contents
A blockchain is a distributed ledger system that stores records of transactions in an ever-growing series of interconnected and cryptographically protected “blocks.” Along with the timestamp and transaction data, each block includes a cryptographic hash linking to the preceding block. As a result, a record of all network transactions may be built up in a linear fashion using blocks.
To prevent fraud, all participants in the blockchain network must verify new transactions before they are approved. The next step, called proof of work, is compiling all valid transactions into candidate blocks. Then, miners compete to add their blocks to the existing blockchain.
Cryptographically solving a challenge and proving validity to the rest of the decentralized network is a computationally intensive process that must be completed successfully to add a block to the network. Because of this decentralized yet consistent mechanism, blockchain can operate without a central authority thanks to the coordinated verification and consensus among participants in the peer-to-peer blockchain network.
Exploring the fascinating realm of blockchain technology, let’s delve into the intricate process of How a New Block is Added to a Blockchain, shaping the decentralized and secure foundation of digital transactions.
The process of connecting blocks through consensus mining enables a decentralized blockchain ledger to expand while preserving its integrity over time. We will examine the process of collecting transaction data within blocks in more detail next.
Transaction Data
Requesting and initiating a transaction is as simple as broadcasting the transaction details to be included in the next block on the blockchain network. One example of use is when a user wants to transfer cryptocurrency from one blockchain wallet address to another. They notify every node in the P2P network about this transaction.
Next, the network nodes—run by participants voluntarily—receive and verify the transaction, ensuring all the requirements are satisfied. This entails confirming that the requester has sufficient funds, the signature is authentic, and the request is formatted correctly. Acceptable transactions go into the transaction pool and wait to be included in the subsequent block, while invalid transactions are rejected immediately.
This transaction pool effectively stores authorized transactions that still need to be completed and are waiting to be added to the chain by being included in the next successfully mined block. As miners compile blocks to be added to the blockchain, nodes select which transactions to have based on criteria like transaction fee size. The blockchain ecosystem handles transactions until they are formally put into blocks by validating and queuing them on the decentralized network.
The Mining Process
Specialized network participants called miners are responsible for grouping pending transactions from the pool into candidate blocks and attempting to append them to the blockchain.
Miners collect valid transactions from the pool, verify them, and assemble them into a candidate block header. This header contains vital data about the block, like a reference to the previous block’s hash and a timestamp. Miners vary the nonce value in the block header as they compete to create a valid block that solves the proof of work computational problem and requirement.
This proof of work involves repeatedly running the block header through a cryptographic hash function, trying different nonce values each time. A cryptographic hash function is a one-way mapping that converts an input into a random alphanumeric string output called a hash value. By altering the nonce and hashing over and over, miners race to discover a hash beginning with a required number of zero bits, proving they completed the work.
The randomized yet demanding cryptographic puzzle secures proof of work consensus, and the competition leads miners to build computing rigs to achieve astronomical processing power. The solution requires significant computation but is easily verifiable, and the first miner to solve it wins the opportunity to commit their candidate block to the official chain.
Proof of Work
After a miner finds a legitimate nonce and uses it to build a qualifying hash, they have finished the necessary work and can submit their block to the network for verification.
A more precise requirement is that all nodes must agree on a certain level of difficulty for the hash to be considered successful. For instance, if a qualifying hash starts with 20 zeros, the network might set the difficulty accordingly. The difficulty can be adjusted to maintain consistent block timings as the network’s processing power increases. Assuming the current difficulty conditions are satisfied, miners will have verifiable evidence of work.
Upon successfully solving the intake proof of work problem, the miner promptly publishes their finished block to the entire decentralised peer-to-peer network of mining nodes, including all transactions and hashes. As soon as the new block is created, every node checks it independently. Additionally, each node validates each transaction separately and verifies that the hash satisfies the proof-of-work criteria for the difficulty goal.
By using this decentralised verification system, the network can reach an agreement on each block and reliably add it to the shared ledger. Once distributed consensus is reached, the next step is to look at the network’s process for adding the block.
Adding the New Block
Every node in the network must confirm the winning miner’s new block before it can be added to the blockchain. This includes ensuring the block’s proof of work hash matches the difficulty target.
By looking up the cryptographic hash of the prior block, the nodes connect the new block to the current blockchain. The result is a mathematical link between the new block and the existing chain’s tip. Additionally, nodes will timestamp the new block, usually UTC, to keep an objective record of the addition date.
Afterward, every node in the network adds this fresh, validated, timestamped, and hashed block to the end of the current chain, thus updating its distributed ledger.
The protocol also uses the reward of a specific amount of the native currency of the blockchain, such as bitcoin, to incentivize nodes to generate new blocks and ensure the network’s security. The miner’s address receives this, plus any transaction fees that have been collected. The network confirms the block and the transaction involving the miner’s reward with the other transactions included in the block.
The process eventually leads to the blockchain, a visible, permanent, and tamper-proof transaction record. The blockchain comprises interconnected, timestamped blocks and can grow infinitely with each new block.
Maintaining Consensus and Security
The decentralized consensus generated by distribution over the peer-to-peer blockchain network is a critical breakthrough that makes blockchain trustworthy without a central authority.
Even when parties don’t trust each other completely, the network of participant nodes agreeing on each update ensures trustworthy consensus because no central databases may be manipulated or failed. Distributing copies over the whole network makes it more resilient to outages in any particular area.
Furthermore, the cryptographic mathematics underpinning blockchain ensures that its data is accurate and unchangeable. In a blockchain, where each block stores a hash of the one before it, changing one block would need updating all hashes in the chain. On top of that, the computational proof of work ensures that the ledger cannot be compromised in any way that could alter or remove past transactions.
The technology’s potential for more trustworthy data, transactions, and infrastructure across sectors goes well beyond cryptocurrency, thanks to the sophisticated mathematical underpinnings of hashing and blockchain. This math provides decentralization, transparency, and security without depending on intermediaries or third parties.
Code will appear in 00:00:60.
