What is a Block and How it Works in Blockchain

What is a Block?

Block is a term that refers to a computer file dedicated to storing transaction data, and is systematically arranged in a continuous and endless chain known as a blockchain. 

As a result, all details regarding transactions in the blockchain are accumulated and recorded in these interconnected blocks. Each newly created block is securely linked to the previous block via cryptographic techniques .

An entire set of linked blocks keeps a comprehensive record of all transaction data resulting from a particular blockchain initiation. This historical record traces back to the initial block which is commonly known as the genesis block or block zero. The number of confirmed blocks, starting from the genesis block, is identified as the block height.

Also read: Understanding What the Blockchain Trilemma Is: A Beginner's Guide

How Do Blocks Work?

Looking at the Bitcoin blockchain as an illustration, blocks include various components. Bitcoin blocks include, among other things, a list of recent transactions, timestamps, and references to previous blocks. This reference is a cryptographic hash derived from the previous data block.

Each time a new block is generated, it consistently combines the hashes of the previous blocks, establishing a cryptographic link between them. This structural arrangement ensures the creation of a secure database with high resistance to tampering and attacks. The block hash operates as a unique identifier for each block and is generated through the mining process.

Source: MLQ.ai

Basically, block hashes serve as solutions to complex mathematical problems. Miners who successfully find a valid solution for the next block gain the privilege of validating that block and the transactions it contains. 

Because mining requires large computing resources, successful block mining results in the creation of new Bitcoins as a reward for miners (referred to as block rewards).

However, sometimes an event may occur when two or more miners simultaneously find a valid block hash, which causes two different blocks to be broadcast to the network. 

This situation creates a chain of competition. To overcome this, network participants (nodes) choose the chain that ultimately becomes the longest, indicating more “work accumulation”. The alternative chain is then discarded, and the blocks become stale blocks, also known as orphan blocks.

Although blocks are generally associated with crypto asset transactions, their relevance extends to other forms of digital data stored in blockchain systems.

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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.