HBC Blockchain 101 – Part 11: Why do blockchains use blocks?

Why Blockchains Use Blocks:

• Not All Distributed Ledger Technologies (DLTs) Use Blocks: Some DLTs like tangle and DAGs (directed acyclic graphs) package transactions individually and attach them to a network of other transactions. However, these systems do not rely on Proof-of-Work (PoW) to verify single transactions due to their high volume.

• The Purpose of Blocks in PoW Systems: Satoshi Nakamoto (creator of Bitcoin) introduced blocks to facilitate the PoW process. Blocks:

  • Bundle transactions together.
  • Set a target difficulty, aiming for a block to be found roughly every 10 minutes.
  • Create a structured point for competitions among miners, with the winner receiving a reward.

• Block Timing: The 10-minute interval in Bitcoin might not be ideal. Ethereum successfully uses 15-second blocks. It is possible that Nakamoto did not fully consider network latency (8-20 seconds) when selecting the 10-minute target.

• Blocks in Proof-of-Stake (PoS) Systems: In PoS systems, blocks might be used for efficiency when verifying transactions, potentially reducing computational overhead compared to handling numerous individual transactions.

Additional Considerations:

• Block Size: The block size affects the number of transactions that can be included in a block and the frequency with which blocks are created.
• Block Difficulty: The block difficulty determines the amount of computational work required to find a block.
• Block Reward: The block reward incentivizes miners to participate in the PoW process.

Conclusion:

The use of blocks in blockchains offers several advantages, including facilitating the PoW process, creating an incentive system for miners, and providing a way to group and order transactions.