A block in cryptocurrencies – what is it?
Understanding Blocks in a Blockchain Network
The number of transactions processed in a cryptocurrency network depends on an important parameter known as the block size. Each block serves as a link in the cryptocurrency chain, forming a sequence that contains all the information about transactions within that blockchain. The information within a block cannot be altered or erased and is stored permanently.
The Concept of a Block in a Blockchain Network
Block is a fundamental unit of a blockchain, resembling an accounting ledger. Each block contains records of a specific transaction's time, volume, and information about the preceding block. These records reflect user transactions such as buying and selling of cryptocurrencies. To add a record, a user must pay a transaction fee. The higher the demand for transactions, the higher the transaction fee. Priority for inclusion in a block is given to transactions with higher fees.
Parameters and Properties of a Block
Blocks can be classified based on the following criteria:
- Block generation frequency - miners produce a new block every few minutes.
- Block fill rate - depends on the current number of transactions.
- Maximum block size - typically several megabytes.
- Block reward - a portion of the coins is always allocated to miners for transaction processing.
Structure and Creation of a Block
Blocks have a simple structure, consisting of a unique header and a list of transactions. Miners take the information from the block and begin processing it using computational power. Their task is to find a hash that matches the required combination. Once consensus is reached among network participants, the block is added to the blockchain, and miners receive a reward for their work.
Each block is stored simultaneously on thousands of devices, making it virtually impossible to tamper with. This principle ensures the nearly eternal storage of transaction information within a specific blockchain.