3.1 Block structure and chain formation

Blockchain blocks are the fundamental building blocks of the distributed ledger. Each block contains a header with metadata, a Merkle tree summarizing transactions, and the transaction data itself. This structure ensures efficient organization and verification of data.

The cryptographic linking of blocks creates a tamper-evident chain, making the blockchain immutable. New blocks are added through a consensus process, with miners or validators competing to create and broadcast valid blocks to the network.

Block Structure

Components of blockchain blocks

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• Block header contains metadata about the block
  • Previous block hash links the current block to the preceding block in the chain
  • Timestamp indicates when the block was created (Unix timestamp)
  • Merkle root summarizes all transactions in the block using a hash tree
  • Nonce is a random number used in the mining process to find a valid block hash (32-bit)
• Merkle tree efficiently organizes and verifies the integrity of transactions
  • Leaves are hashes of individual transactions (SHA-256)
  • Non-leaf nodes combine hashes of their child nodes (concatenate and hash)
  • Root is the top hash representing the entire set of transactions in the block
• Transaction data includes a list of all transactions contained within the block
  • Each transaction specifies sender, recipient, amount, and digital signature
  • Transactions are typically stored in a serialized format (JSON, binary)

Cryptographic linking of blocks

• Each block header includes the hash of the previous block creating a chain
• Linking blocks in this manner makes the blockchain tamper-evident
  • Altering any data in a block changes its hash
  • Subsequent blocks' hashes will no longer match breaking the chain
  • Allows easy detection and rejection of attempts to modify past blocks
• Ensures the integrity and immutability of the blockchain

Process of adding new blocks

1. Miners or validators compete to create new blocks based on the consensus mechanism
   • Proof-of-Work (PoW): Miners solve a computational puzzle to find a valid block hash
   • Proof-of-Stake (PoS): Validators are chosen to create blocks based on their stake
2. The selected miner or validator creates a new block containing validated transactions
3. The new block is broadcast to the entire network for verification
4. Other nodes verify the block's validity and add it to their local copy of the blockchain
5. The newly added block propagates through the network ensuring consistency across nodes

Genesis block vs subsequent blocks

• Genesis block is the first block in a blockchain with special characteristics
  • Hardcoded into the blockchain software (no previous block hash)
  • Often contains unique transactions or messages (coinbase transaction)
• Subsequent blocks are all blocks following the genesis block in the chain
  • Each subsequent block references the previous block's hash in its header
  • Contains regular transactions that have been validated by the network