3.2. Summary

We covered how the blockchain network works. We went into the details of how nodes coordinate to manage the blockchain data structure.

  • The Blockchain network is a collection of nodes that store the same Blockchain data structure

  • Nodes are divided by their responsibilities into ‘full’ and ‘light’ categories with the light nodes sacrificing utility for efficiency.

  • Consensus makes sure that honest nodes always have the same version of the blockchain. This process happens independently at every node but always reaches the same conclusion.

  • Consensus algorithms guarantee consensus across a blockchain and they come in differnt types like Proof-of-Work or Proof-of-Stake.

  • Forking is the situation when two valid chains exist on a blockchain. This can either be because of a Proof-of-Work accident or an intentional change of blockchain rules.

  • Miners are nodes that are responsible for generating new blocks and blockchains often incentivize them because block production is vital to a blockchain’s validity.

  • Miners often pool resources to earn more or more stable returns for the extra effort it takes being a miner.

  • There are different types of Blockchain for different use-cases. These include public, private and permissioned blockchains.

  • Blockchain is a solution to the Byzantine Generals Problem by combining a novel data structure, cryptography and network architecture.