Home » Bitcoin Block

Bitcoin Block

« Back to Glossary Index

Bitcoin block(s) are data structures within the blockchain database, where transaction data in a cryptocurrency blockchain are permanently recorded. A block records some or all of the most recent transactions not yet validated by the network. Once the data are validated, the block is closed. Then, a new block is created for new transactions to be entered into and validated.

A block is thus a permanent store of records that, once written, cannot be altered or removed.

How a Bitcoin Block Works

A blockchain network witnesses a great deal of transaction activity. When used in cryptocurrency, maintaining a record of these transactions helps the system track how much was or wasn’t used and which parties were involved. The transactions made during a given period are recorded into a file called a block, which is the basis of the blockchain network.

A block stores information. Many pieces of information are included within a block, but it doesn’t occupy a large amount of storage space. Blocks generally have these elements, but they might vary between different types:

  • Magic number: A number containing specific values that identify that block as part of a particular cryptocurrency’s network.
  • Blocksize: Sets the size limit on the block so that only a specific amount of information can be written in it.
  • Block header: Contains information about the block.
  • Transaction counter: A number representing how many transactions are stored in the block.
  • Transactions: A list of all of the transactions within a block.

The transaction element is the largest because it contains the most information. It is followed in storage size by the block header, which includes these sub-elements:

  • Version: The cryptocurrency version being used.
  • Previous block hash: Contains a hash (encrypted number) of the previous block’s header.
  • Hash Merkle root: Hash of transactions in the Merkle tree of the current block.
  • Time: A timestamp to place the block in the blockchain.
  • Bits: The difficulty rating of the target hash, signifying the difficulty in solving the nonce.
  • Nonce: The encrypted number that a miner must solve to verify the block and close it.

One 32-bit number in the header is called a nonce—the mining program uses random numbers to “guess” the nonce in the hash. When a nonce is verified, the hash is solved when the nonce, or a number less than it, is guessed. Then, the network closes that block, generates a new one with a header, and the process repeats.

Different mechanisms are used to reach a consensus; the most popular cryptocurrency is proof-of-work (PoW), with proof-of-stake (PoS) becoming more so because of the reduced energy consumption compared to PoW.

Trade on the Go. Anywhere, Anytime

One of the world's largest forex brokers is ready for you. Enjoy competitive fees and dedicated customer support while trading securely. You'll also have access to their tools that make it easier than ever to view your trade history, copy trades, manage investments from other traders, view price charts, and make conversions with zero fees. Make an account for free and join millions of traders and investors on the global forex market.