Readers like you help support MUO. If you make a purchase through links on our site, we may receive an affiliate commission. Continue reading.
If you deal with cryptocurrencies, then you have certainly come into contact with a blockchain. Blockchains are also relevant to supply chain management, logistics, identity verification, and a range of other areas, so you may have used this technology even if you’re not into crypto. But what data do blockchains store? And if those blockchains are public, should you be concerned about what’s on them?
A brief overview of blockchain technology
Before we get into the data stored on blockchains, let’s first briefly explain what a blockchain is so that we know what kind of technology we are dealing with.
Blockchains are best thought of as virtual blockchains, hence the name. Each block stores data using hashing, a cryptographic method. This deters illegal individuals from exploiting blockchain data. Once a block has reached capacity and has been confirmed to join the chain, confirmation of another block begins, whether through Proof of Work, Proof of Stake, or some other consensus mechanism.
Blocks vary in size, meaning the amount of information they can store varies. For example, a Bitcoin block is only 1 MB in size. The same applies to Litecoin and Dogecoin. However, Bitcoin Cash has a much larger block size of 32MB, which means more transactions can be stored per block.
Larger blocks usually give way to faster transaction times and lower fees, but we won’t get into that element of blockchain technology today. Instead, let’s start with the type of data stored on the blockchain.
What data does a block store?
The specific type of data that a given block stores can vary depending on the purpose and type of blockchain. But let’s use Bitcoin, one of the world’s most popular blockchains, to get a good understanding of blockchain storage.
Bitcoin blocks are mined through the proof-of-work consensus mechanism, where miners use specialized hardware to solve complex computational problems. So far, over 760,000 Bitcoin blocks have been mined and around 900 BTC have been circulated every day. Each block circulates 6.25 BTC, which is the reward due to the miner or mining pool that mines the block.
Bitcoin is nearing its supply limit of 21 million BTC. Once this cap is reached, no more BTC can be mined. However, as bitcoin transactions continue to be made, blocks must continue to be added to the blockchain to maintain the immutable ledger.
The data within a Bitcoin block is hashed using the SHA-256 cryptographic hash algorithm. Different cryptocurrencies use different hashing algorithms. For example, Ethereum uses Ethash. Many governments also use SHA-256 to hash data.
A Bitcoin block consists of a few different sections. Let’s start with the block header.
The block header
A bitcoin block header stores the following type of data:
- transaction time
That transaction time contains a timestamp representing the time when the transaction took place. Blocks store transactions in chronological order.
That once (abbreviated from “number only used once”) plays a very important role in the proof-of-work mining process. This is the number a miner must reach by solving math problems. When a miner solves the nonce, they can successfully mine the block. Over time, it gets harder and harder to mine blocks as bitcoin mining difficulty (i.e. how hard it is to mine a block) increases.
Next we have them bits. This field also relates to bitcoin mining difficulty as it contains the difficulty itself. This may increase or decrease over time. As the difficulty increases, a miner has to expend more hash power to mine the block. If it falls, the miner can consume less. Of course, miners prefer a lower difficulty level as it saves energy and time. In general, as the number of miners increases, so does the difficulty.
That hashMerklRoot is connected to a Merkle root. This is a mathematical method used to confirm the information on a Merkle tree, which is essentially a data storage structure. Merkle trees use cryptography to store data, where hashMerklRoot is the hash of all the hashes of the transactions stored in a given block.
hashPrevBlockas the name suggests, refers to the 256-bit hash of the previous block. Each bitcoin block in the chain contains the hash of the previous block.
Finally you have it execution. This field simply refers to the version of the Bitcoin protocol being used. The Bitcoin protocol used today is not exactly the same as that used when Bitcoin was first launched in 2008. Updates are made from time to time to improve certain parts of the network. The latest protocol version is 70015, which was introduced in 2017. This update provided the ability to ban invalid compact blocks from the chain.
The remainder of a bitcoin block
But things don’t stop with the header. There are other types of data stored in each bitcoin block including:
- block size
- transaction counter
- magic number
Let’s start with the block size. This field limits the amount of data that can be stored within a block. As mentioned, Bitcoin’s block size limit is 1MB, but this varies from crypto to crypto.
That transaction counter simply counts the number of transactions recorded within a given bitcoin block. There is no constant number of transactions blocking memory as each transaction can be a different size. But on average, each Bitcoin block contains between 1,500 and 2,000 transactions, plus or minus a few hundred on each side.
That magic number has a constant value of 0xD9B4BEF9 and identifies the file type and structure used in the block. Magic numbers also represent the network identifier for each block. This constant value was established by Satoshi Nakamoto when Bitcoin was created.
That transaction field lists all transactions contained in any bitcoin block (as opposed to the transaction counter field, which indicates the number of transactions in the block). As we have already discussed, the number of transactions stored in one block cannot exceed the capacity of 1 MB.
Does the blockchain store your personal data?
Your name, contact details, payment information and other private data are not stored on the blockchain. The only data that relates to you is your public wallet address. In most scenarios, this is completely harmless. But more sophisticated tracking tools used by government agencies and other blockchain analysts can reveal your identity through your address if they try hard enough.
Most cryptocurrencies out there are pseudonymous and traceable to some extent. This is why some prefer privacy coins like ZCash and Monero as they can hide their wallet address when trading these assets.
Blockchain data plays a major role in the network
Without block data, there would be no way to record and track transactions, which is an inherently important part of blockchain technology. Providing an immutable ledger provides security and transparency, allowing users to review different types of information within the network, such as: B. transaction amounts,
This article was previously published on Source link