Course:

Introduction to Blockchain: Technologies, Approaches

and Applications

Lecture 3
Blockchain – Technical Details
Sanjay Chaudhary

School of Engineering and Applied Science

Ahmedabad University
Ahmedabad, Gujarat, India
Structure of Block

Lecture 3 Blockchain Technical Details 2

Block
• Block is a container data structure that aggregates
transactions for inclusion in public ledger

Version Header
Previous Block Hash
Merkle Root (Hash Value)
Time Stamp
Difficulty Target
Nonce
Transaction 1
Transaction 2
Transaction 3
Transaction 4
Transaction 5

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Blockchain
• The blockchain data structure is an ordered, back-linked
list of blocks of transactions.

Block # 0 Block # 1 Block # 2 Block # 3

Genesis Block

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The Structure of a Block
Size Field Description
4 bytes Block Size The size of the block, in bytes, following this field
80 bytes Block Header Several fields form block header
1-9 bytes Transaction Counter How many transactions follow
Variable Transactions The transactions recorded in this block

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The Structure of a Block Header
Size Field Description
4 bytes Version Version number of Software/Protocol
32 bytes Previous Block Hash Hash of the parent block in the chain
32 bytes Merkle Root Hash of the root of Merkle tree of this block’s
transactions
4 bytes Timestamp Creation of time of this block
4 bytes Difficulty Target PoW difficulty target for this block
4 bytes Nonce Counter used for PoW

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Merkle Root
Block # 0 Block # 1 Block # 2 Block # 3

Merkle Root
Tx 1
Tx 2
Tx 3
Tx 4

Genesis Block
Root Hash ()

Hash (H1 | H2) Hash (H3 | H4)

Hash(Tx 1) Hash(Tx 2) Hash(Tx 3) Hash(Tx 4)

Tx 1 Tx 2 Tx 3 Tx 4

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Identification of a Block
• Block Header Hash
• Block Height

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Block Header Hash
• Primary identifier of the block
• Identifies a block
• Uniquely
• Unambiguously
• Can be independently derived by any node
• Digital Fingerprint
• Block’s Cryptographic Hash
• Block header is hashed twice with SHA256
• 32 byte hash

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Block Height
• When Blockchain is visualized as a vertical stack, with
blocks layered on top of each other.
• Height refers to the number of blocks connected
together in the block chain.
• For example, Height 0, would be the very first block,
• which is also called the Genesis Block.
• May not be unique

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Fork
• creation of an ongoing alternative version of the
blockchain, by creating two blocks simultaneously on
same height

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Fork
• A blockchain fork can persist for several block
• The protocol determines that the correct blockchain is
the longest one
• The discarded block is called an orphan block

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Types of Forks
• Soft Fork
• Tightening the rules (e.g. 1MB -> 0.5MB)
• Backwards Compatible
• Old nodes accept new blocks

Blocks
Follows Follows Follows Old Rules Follows
From Non-
Old Old But Violates Old
Upgraded
Rules Rules New Rules Rules
Nodes

Blocks
Follows Follows
From
Old & New Old & New
Upgraded
Rules Rules
Nodes

A Soft Fork: Blocks Violating New Rules Are Made Stale By The Upgraded Mining Majority

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Types of Forks
• Hard Fork
• Expanding the rules (e.g. 1MB -> 2MB)
• Not backwards compatible
• Old nodes don't accept new blocks

Blocks
Follows Follows Follows Follows
From Non-
Old Old Old Old
Upgraded
Rules Rules Rules Rules
Nodes

Blocks
Follows Follows Follows Follows
From
New New New New
Upgraded
Rules Rules Rules Rules
Nodes

A Hard Fork: Non-Upgraded Nodes Reject The New Rules, Diverging The Chain

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Decentralized Consensus
• Four Processes
1. Independent Verification of Each Transactions
2. Independent Aggregation of Transactions
3. Independent Verification of New Blocks
4. Independent Selection of Chain

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[1] Independent Verification of Tx
• Once a Tx is created by client
• Sent to neighboring nodes
• Propagated across network
• As soon as a Node Receives Tx,
• Its validated before its propagated further
• Invalid Tx are discarded by first node that encounters them
• Tx Verification Criteria
• Blockchain Specific
• Each nodes builds a pool of valid (but unconfirmed Tx)

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Tx Verification Criteria
• If Syntax and Data Structure are correct
• Inputs / outputs are not empty
• Values are within permissible limit
• Size in bytes valid
• Other blockchain-specific criteria
• Such Criteria / Conditions change over time

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Pool of Valid Tx
• Pool of valid (but unconfirmed) Tx are known as
• Transaction Pool
• Memory Pool
• Mempool

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[2] Aggregating Tx in New Blocks
• Tx in Pool are waiting to be added in to new block
• Few hundreds Tx
• Node will aggregate Tx in to Candidate Block
• If Node receives new block,
• It will first validate block
• Remove Tx from MemPool which are already included in the
new block
• First Tx in any block is special Tx
• Coinbase Transaction
• Reward of mining effort

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Candidate Block
• Block Header is Constructed
• Version,
• Previous Block Hash
• Merkle Tree,
• Time Stamp,
• Target for PoW,
• Nonce=0
• Continues to find solution for mining puzzle
• Hashing the header repeatedly changing value of Nonce
• Until resulting hash matches a specific target

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Proof of Work
• Puzzle
• Guess a value of Nonce within specified target range
• Target sets a threshold
• Only a hash below this threshold is acceptable
• Hash that is numerically less than the target
• As target decreases, finding hash less then that becomes
more and more difficult
• Virtually impossible to predict/determine a value to
produce output within desired range
• Trial and error – Random inputs
• Discovery of solution (valid hash) below the target
implies that certain amount of work has been done to
produce the result

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Proof of Work Target
• Target determines the difficulty
• Affecting how long it takes to find solution to the PoW
• Miners resort to
• Specialized Hardware (GPU, ASIC..)
• Mining Rigs
• Mining Pools
• Proof of Work Target (in Bitcoin Blockchain)
• Is a dynamic parameter
• Adjusted periodically
• To meet 10 min block interval goal
• Defined to Retarget every 2016 blocks
• New Target = Old Target * (Actual Time Taken for Last 2016 Blocks /
20160 minutes)

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Summary
• This Lecture
• Structure of Block, Blockchain
• Block Creation
• Mining Process

• Next Lecture
• Demonstration
• Types of Consensus Strategies
• Attacks
• Stakeholders

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