Blocks

Blockchain is a specific technology, but there are many forms and varieties. For instance, Bitcoin and Ethereum are proof-of-work blockchains. Ethereum has smart contracts, and many blockchains allow custom tokens. Blockchains can be differentiated by their consensus algorithm (PoS, PoW, and others)—covered in Chapter 7, Achieving Consensus, and their feature set, such as the ability to run smart contracts and how those smart contracts operate in practice. All of these variations have a common concept: the block. The most basic unit of a blockchain is the block. The simplest way of thinking of a block is to imagine a basic spreadsheet. In it, you might see entries such as this:

A block is a set of transaction entries across the network, stored on computers that act as participants in the blockchain network. Each blockchain network has a block time, or the approximate amount of time that each block represents for transactions, and a block size: the total amount of transactions that a block can handle no matter what. If a network had a block time of two minutes and there were only four transactions during those two minutes, then the block would contain just those four transactions. If a network had 10,000,000 transactions, then there may be too many to fit inside the block size. In this case, transactions would have to wait for their turn for an open block with remaining space. Some blockchains handle this problem with the concept of network fees. A network fee is the amount (denominated in the blockchain's native token) that a sender is willing to pay to have a transaction included in a block. The higher the fee, the greater the priority to be included on the chain immediately.