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Blockchain Technology

10.2.1.2  Block

The data that is stored inside a block of a Blockchain, which contains information in

the form of a “chain of blocks”, depends on the type of Blockchain. The first block

in the chain is called the Genesis block. Each opposing block in the chain is con­

nected to a new block. The information in the block is categorized as block header

and transactions. A function of the block header is to verify the validity of a block.

Each block has:

1. Data.

2. Hash.

3. Hash of the previous block.

The blocks in the Blockchain contains the hashes of the antecedent block, which

provides a feature of security in Blockchain. The blocks in the Blockchain are cre­

ated by miners. The process in mining is to create a block that is valid, such that it

is accepted by the rest of the network. The role of nodes is to handle the pending

transactions in the network, verify that they are cryptographically accurate and wrap

them into the blocks to be stored on the Blockchain.

10.2.1.3  P2P Network

A peer-to-peer (P2P) network indicates that there is no centralized node and pro­

vides more security because there is no single point of attack or failure as there

would be in a centralized network. Blockchain architecture uses a P2P network,

which is based on the IP protocol. Each and every single node in a network keeps a

local copy of a Blockchain, and the decentralization of the Blockchain architecture

is built on the P2P network. To provide more security among the blocks and nodes, a

Blockchain uses a distributed P2P network, which everyone is allowed to join easily

and will have access to a full copy of the Blockchain. When any user creates a new

block, it is sent to all users (nodes) in the network, each node verifies the block, and

after full verification, each node in the network adds this block to their Blockchain.

In this process, all nodes in the network are compatible and agree whether or not the

block is valid. When any user creates a new block, it is sent to all the users (nodes)

on the network, each node verifies the block, and after complete verification, each

node in a network adds this block to their Blockchain. In this process, all the nodes

in a network create a consensus, i.e. they agree which blocks are valid and which are

not. Blocks that have been tampered with are rejected in the network.

10.2.1.4  Consensus Algorithm

The way the copies are synchronized in a Blockchain is because of a consensus

algorithm. The algorithm makes sure that every individual party that has a local

copy of a Blockchain should be consistent with the others, and the copy should

be the most recent one. The compatibility algorithm is at the heart of Blockchain

architecture. Various algorithms for compliance are Proof-of-Work (POW), Proof-

of-Stake (POS) and Simplified Byzantine Fault Tolerance (SBFT), which is used for

implementation.