What does a blockchain network look like?

Blockchains are just fancy databases. Databases have designs based on the data they store. Let's take a look at the architecture behind a blockchain data structure and how it differs from traditional web2 databases...

Access the slides here.

What is the architecture of a blockchain?

A blockchain is a distributed database of a list of validated blocks. Each block contains data in the form of transactions and each block is cryptographically tied to its predecessor, producing a "chain".

Blockchains are not just decentralized but also distributed databases. Those little circles are meant to be "nodes".

In computer science, the term node simply means a unit or member of a data structure. For practicality, a node can just be thought of as a computer. So data structures have nodes, or computers, that you use to update data with.

A blockchain has nodes scattered all over the world all acting together in real-time. There is no central administrator, say a "supernode", responsible for verifying any changes to the state of data, all nodes are equal members of the network. This means that the network will perform the same, no matter what node you interact with to update data. In other words, blockchains are peer-to-peer networks.

How do distributed p2p networks agree on what data is valid without a central administrator running the show? 🤔

Consensus mechanisms! The Bitcoin network decides validity of new data based on who is able to produce a valid proof-of-work.

This is a famous computer science problem called the "Byzantine General's Problem".

Blockchain Demo

Now that we've covered that a blockchain is a collection of distributed nodes arranged as a peer-to-peer network, let's go through a blockchain demo together! 🤝

Go to this link: https://blockchaindemo.io/. Feel free to go through this excellent demo by yourself, we will also break down a lot of the same info below!

1. Starting on step 3 of the demo, the demo starts by defining a blockchain.

A blockchain has a list of blocks. It starts with a single block, called the genesis block.

New term! The genesis block is simply the first block in a blockchain. The block should have an index of 0 - this is computer science, everything is 0-indexed!

2. Step 4-13 explains the information that each block stores:

• index: the position of the block in the chain.
• timestamp: a record of when the block was created. This is typically a UNIX timestamp, aka: the number of seconds since January 1st, 1970. This data is important since it establishes a blockchain as a chronological time-based structure.
• hash: this is commonly referred to as the block hash or block header. As opposed to what the demo says, this piece of data is NOT stored in the block but is actually a digital fingerprint representing the block's contents.

How is the block hash calculated?

A hashing function takes data as input, and returns a unique hash.

f ( data ) = hash

Since the hash is a "digital fingerprint" of the entire block, the data is the combination of index, timestamp, previous hash, block data, and nonce.

f ( index + previous hash + timestamp + data + nonce ) = hash

Replace the values for the demo's genesis block, we get:

f ( 0 + "0" + 1508270000000 + "Welcome to Blockchain Demo 2.0!" + 604 ) = 000dc75a315c77a1f9c98fb6247d03dd18ac52632d7dc6a9920261d8109b37cf

• previous hash: the hash of the previous block.

• data: each block can store data against it.

In cryptocurrencies such as Bitcoin, the data would include money transactions.

• nonce: the nonce is the number used to find a valid hash.

To find a valid hash, we need to find a nonce value that will produce a valid hash when used with the rest of the information from that block.

What is a "valid" hash?

A valid hash for a blockchain is a hash that meets certain requirements. For the blockchain in the demo, having three zeros at the beginning of the hash is the requirement for a valid hash.

The number of leading zeros required is the difficulty.

The process of finding valid hash outputs, via changing the nonce value, is called mining.

A miner starts a "candidate block" with a nonce of 0 and keep incrementing it by 1 until we find a valid hash:

Data Integrity in a Blockchain Data Structure

If a blockchain is just a distributed database, how does the data it stores maintain data integrity? In other words, how do we make sure the state of the data is never corrupted in any way (ie, data lost, data maliciously manipulated, etc)?

The next parts of the demo touch on how difficult it is to manipulate data in a block that already has many blocks mined on top of it.

Since data is an input variable for the hash of each block, changing the data will change that block's hash. The new hash will not have three leading zeros and therefore becomes invalid. In the same way, blockchains like Bitcoin and Ethereum, protect the integrity of any data held inside blocks in their chains; manipulating data in a block that has been nested deeply in the chain is a fool's errand.

To give an example: In Bitcoin's genesis block, Satoshi sent Hal Finney 10 BTC. Manipulating this value from 10 BTC to 20 BTC (Maybe Hal wants some more BTC!) would require IMMENSE computational power. It's a number so large that humans are not able to grasp how big it is.

Why is so much computational power required to manipulate data in early blockchain blocks?

Let's look at a simple scenario:

1. The Bitcoin genesis block hash is 000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f
2. Mallory (the crypto term for a malicious actor!) manipulates a piece of data, producing a brand new hash for the same block: eb3e5df5eefceb8950e4a444507ce7df1cc534f54a5113f2792ab64830392db0

Because of this change, Mallory has causes a data mutation of the genesis block hash! 😱This is where the blockchain data structure is very powerful with data integrity: since the hash of the genesis block changed to be invalid, the block that was previously pointing to it (Block #1) no longer does (because pointers are based on block hashes!). This effect trickles down all the way to the end of the blockchain.

At this point, Mallory has caused a data mutation along the entire chain just by changing one tiny piece of data. In order to continue pushing, Mallory now needs to:

3. Hash the genesis block data until a "valid hash" is found

So Mallory, now attacking the chain data integrity, must now hash the manipulated block many times in order to find a hash that meets the Bitcoin network difficulty target at the time.

4. Once a valid hash is found on the manipulated block, Mallory must repeat the hashing process for EVERY block thereafter in order to successfully "attack" the chain.

This would take Mallory trillions and trillions of years of constant computation via hashing. All while the rest of the miner network continues to hash

5. Attack unsuccessful! The blockchain data integrity remains intact.

Adding a New Block

The demo continues with a brief explanation of what it takes to add new blocks to the blockchain.

When adding a new block to the blockchain, the new block needs to meet these requirements:

1. Block index is one greater than latest block index.
2. Block previous hash equal to latest block hash.
3. Block hash meets difficulty requirement.
4. Block hash is correctly calculated.

Peer-to-Peer Network / Conclusion

Who performs validation of new blocks? 🤔

Well, pretty much every participant in the peer-to-peer network performs validation for every single new block proposed-then-added to the chain.

If our blockchain consists of 10 nodes, then we have a peer-to-peer network consisting of 10 nodes all interconnected to each other. When one node, or peer, proposes a new block, every other peer will verify it to make sure it meets the consensus requirements. If it does, the peer adds the block to their own ledger and will see that version as the one "true" chain. So will any other peers rigged up to the same consensus rules?

This is how a peer-to-peer network helps achieve decentralized consensus.

Learn More About Blockchain Architecture

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