In this tutorial, you’ll learn the basics operations of a blockchain and its basic structure. So, the operations in the decentralized network are the responsibility of the peer participants and their respective computational nodes.
For example, desktop, laptop, and server. These following operations are included.
- Validation transactions
- Gathering the transactions for a block
- Broadcasting valid transactions and the block
- Consensus on the next block creation
- Chaining the blocks to form an immutable record.
So, We’ll understand the fundamental operations of the bitcoin blockchain and their participants. following two major roles for the participants.
Participants that start the transfer of value by creating a transaction. more participants called miners, who pick on added work or computation to.
- Verify transactions
- Broadcast transaction
- Compete to claim the right to create a block
- Reaching consensus by validating the block
- Broadcasting the newly created block, and confirming transactions.
You might wonder why participants would take on more work. Well, the miners are incentivized with bitcoins for the efforts in managing the blockchain, as we’ll find out.
Transaction validation carried out by all miners. The process involves the validation of more than 20 criteria, including size, syntax, etc. Some of these criteria are:
Referenced Input Unspent Transaction Output. UTXOs are valid, recall, and reference output UTXOs are correct, reference input amount and output amount matched sufficiently. invalid transactions reject and will not be broadcast.
All the valid transactions are added to a pool of transactions. Miners select a set of the transaction from this pool to create a block. This creates a challenge. If every miner adds the block to the chain, there will be many branches to the chain, resulting in an inconsistent state.
Miners compete to solving a puzzle to determine who earned the right to create the next block. In the case of the bitcoin blockchain, this puzzle is a computation of the puzzle and the central processing unit or CPU intensive. if the miner solves the puzzle, the announcement is broadcast to the network and the block is also broadcast to the network.
Then, other participants verify the new block. so, the participants reach a consensus to add a new block to the chain. This new block add to their local copy of the blockchain. Thus, a new set of transactions are recorded and confirmed.
The algorithm for concurrency is called proof-of-work protocol. so, it involves work a computational power to solve the puzzle and to claim the right to form the next block.
Actually, the transaction zero or index zero of the confirmed block creates by the miner of the block. So, It has a special UTXO and it does not have any input UTXO. It also called the coinbase transaction that generates a minor’s fees for block creation.
Currently, the minor’s fees are 12.5 BTC for a bitcoin. This is how a new coin maintains in bitcoin. so, the main operations in a blockchain are transaction validation and block creation with the concurrency of the participants. There are many underlying implicit operations as well in the bitcoin blockchain.