With all of the talk about the Bitcoin network becoming a bit slow and how the Bitcoin miners are helping the transactions moving along, some people might be wondering what a Bitcoin block is. We know that a Bitcoin block contains transactions waiting to be confirmed on the network, and how they are generated through a process called mining. but what is the deeper purpose of a Bitcoin block?
Also read: What is Bitcoin Mining?
A Bitcoin Block In A Nutshell
The most important part of a Bitcoin block is all of the transaction data it contains. To translate this into a real life example, think of a Bitcoin block as an individual page of a physical ledger where similar data is recorded. Considering how every Bitcoin block is part of the blockchain, it is not hard to envision why these chunks of data are organized in a linear manner.
To put this into perspective, every new block will contain a few different things: transaction records, Bitcoin addresses, a mathematical puzzle solution, and a reference to the block that came before it on the network. The reason a Bitcoin block links tot he one that came before it is to create a tamper-proof ledger. Every block that comes after it while further validate the records enclosed in the current Bitcoin block.
All of the transaction records found within any given block are processed by the Bitcoin miners. and once a Bitcoin miner finds the mathematical puzzle associated with discovering the block on the network, those transaction records are included. This newly discovered block is then added to the previous block, which is linked to the before that, and so on. In the end, a chain of blocks – or a blockchain – is formed.
Enthusiasts will remember every block will provide the miners with a reward in the shape of newly generated bitcoins. However, all of these bitcoins need to be properly distributed to the miners who helped produce the block itself. A list of eligible Bitcoin addresses is contained in every block, which is also referred to as the generation transaction. This particular transaction is also the very first one to appear in every Bitcoin block.
To ensure Bitcoin transactions have a chance if being included in the next Bitcoin block on the network, transactions are broadcasted by the Bitcoin nodes. All of the Bitcoin miners collect these pending transactions Every transaction has its own fee, which serves as an incentive for the miners to include that transfer in the next block they discover.
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