Blockchain is the latest technology, almost used by all cryptocurrencies. It works in the form of blocks, each block in a chain having various transactions held by different clients. Furthermore, in blockchain data would always be transferred through the blocks. Our today’s article is based on how blocks are added to a blockchain so let’s get started!
Firstly, we know about Blockchain…
What is Blockchain
It operates independently without sticking to centralized institutions like banks and governments, that's why it is called decentralized. It works in the form of a chain; this chain holds several blocks. Each block would be verified by the miner’s using consensus and this process is called mining.
How Blocks Are Added to a Blockchain
When transactions are initiated by any client, firstly it would be verified by each node called miner. The term "miner" refers to a node or a group of nodes that assist in carrying out legitimate cryptocurrency transactions. Additionally, it confirms and validates transactions or blocks before adding them to the entire blockchain, this process is called consensus.
Miners always compete to solve a challenging mathematical problem based on a set of cryptographic hash rules to validate the transactions. When it would be successfully verified and then added to the entire blockchain, the miner would receive a reward fee in return to add the block to the blockchain.
Furthermore, It also encourages every node in the blockchain network to add fresh validated transactions to the existing ledger.
What Is Consensus
No centralized authority is needed in the blockchain to carry out network tasks like transaction validation and verification. Even if the blockchain excludes a central authority, the transaction is still secure and verifiable thanks to the existence of the consensus protocol, which is the foundation of the blockchain and is also known as the consensus algorithm.
The set of guidelines, practices, and agreements known as the consensus protocol is used to carry out secure and verified transactions. Each node in the network must have a consensus mechanism installed as a requirement. Consensus algorithms have different variants, including Proof of Work, Proof of Authority, and Proof of Stake.
Miners compete to solve a challenging mathematical problem that is based on a set of cryptographic hash rules. When cryptocurrency is successfully mined, the miner would receive a reward fee.
Block would always be approved by each node on the network and then it would be added to the entire chain, whenever the transaction is initiated, it would be verified by each node in the blockchain network called consensus. Consensus is the set of rules and practices that install on every single node in the blockchain network to perform the validation of blocks.