Elements of Blockchain

Sushant Mehta Feb 09 2021 · 1 min read
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Elements of a Blockchain

Nodes

Any computer connecting to a blockchain network is a node participating in the network. Now if you want to be a more active participant in the blockchain and become a member of the “community of verifiers,” you have to become a full node. To become a full node, you must have a computer (hardware) connected to a blockchain network and you must download a complete copy of the blockchain (software) onto your computer. As of the writing of this text, the size of the Bitcoin blockchain download was over 200 GB and growing. It could take several days to download a complete copy of the Bitcoin blockchain. A full node includes the complete copy of the blockchain and also works to fully validate both the transactions and the blocks. To operate as a full node on a blockchain application certainly requires a high-powered computer setup, including lots of Remote Access Memory (RAM), large quantities of free space on your hard drive, and a good broadband connection. One user can operate multiple nodes on a blockchain, and there also exist “partial nodes” that point to full nodes for their data.

Blocks

Any full node participating on a blockchain can gain the right to package the transactions as they occur into a block. As a reference point, blocks on the Bitcoin blockchain are currently about 1 MB in size and take about ten minutes to create. Once a block is created, it is linked to the previous block using a special address as well as cryptography. Grouping these connected blocks into a chain is why the database is called a blockchain, and it represents a chronological history of all the events that occurred in the network. Looking at transactions in a blockchain you will mostly see numbers and letters, representing the alphanumeric address associated with the transaction, as well as the hash (or compression) of the previous blocks.

Mining

As part of the “community of verifiers,” a full node helps validate a blockchain database through a practice called mining. Miners are nodes that perform a certain amount of computational work –racing with each other to solve a mathematical puzzle – in order to help keep the network going. Every time a miner successfully solves the puzzle, they win the right to contribute the newest block of transactions to the blockchain. The winning miner sends out a message to the entire network, and receives newly minted tokens as an incentive in exchange for the service of helping maintain the database by mining.

Tokens

Tokens or Coins One of the ingenious things about blockchain technology is that it was developed using some elements of game theory and economics. In order to motivate people to participate in a blockchain as a full node and help secure the history of transactions in the database, these systems include an incentive structure that uses “digital tokens.” A digital token is just a way of representing value on a blockchain application.

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