L02: Blockchain II Flashcards
Block structure
Block header: Hash pointer to previous block’s hash; Nonce, Timestamp, Merkle root
Block body: List of transactions (transaction, address)
Explain those terms and why they are there.
Merkle tree: … A Merkle tree (or hash tree) refers to how transaction hashes are stored in a block. Rather than sequential ordering, transactions are stored in a ….
Because the Merkle root …, one only needs to verify the Merkle root to ascertain that a transaction belongs to that block.
- Serves as a reference to ascertain the chronological order of blocks in the blockchain. Hash pointers are essentially the links that connect blocks and form the chain. The only block without a hash pointer is the genesis block.
- A four-byte number that blockchain miners in PoW consensus mechanisms need to solve for. Once it is solved, it is added to a hashed block and the miner earns their reward.
- Denotes the precise time a block was created.
- represents the hash of all the hashes of all transactions that are part of a block
stored in a tree-like manner, which enables efficient data verification and mobility across blockchain users. contains all transaction information in a block - A transaction refers to the transfer of data (e.g., value) from one address to another. An address is the unique identifier of blockchain users. Addresses are public keys (see section on cryptography) or its hash.
Chain structure:
consists of…
A blockchain can be logically seperated in block 1 and blocks 2, …, n.
Block 1 is called the genesis block because it is hardcoded when the blockchain is started. Because the genesis block is not preceded by any other block, it does not have a hash pointer.
Blocks 2, …, n follow all the same structure, as described above. They have a hash pointer, nonce, timestamp, and Merkle root.
It should be noted that the number of transactions stored in each block does not need to be the same. WHY? …
blocks that are linked together by hash pointers in the header of each block.
Most blockchains specify a data size for each block (e.g., 1,000,000 bytes). Because transactions are variable in size, the number of transactions stored in a block can vary substantially.
Network structure
Slide 37 – draw it.
P2P Network (Nodes(Vm,STate,Chain)ADDRESS)
Layer structure:
List the 6 layers, specifying where they are used.
- Network (The internet, TCP/IP)
- P2P (Gossip protocols, Routing protocols, flooding protocols)
- Cryptography (Public key cryptography, Digital Signatures, Hash functions)
- Consensus (State Machine Replication, Proof-based consensus, Traditional Byzantine Fault Tolerant Protocols)
- Execution (VMs, Blocks, Tx)
- Applications (Smart contracts, dApps, DAOs, Autonomous Agents)
Blockchain layers: What’s the role of L0-L3?
- L0: internet, hardware, and connections for layer 1s like Bitcoin to run smoothly. Why?
- L1: Blockchains like Bitcoin and Ethereum that process and finalize transactions on their own blockchain. This is where things like …
- L2: Third-party integrations used in conjunction with L1s to …: zero-knowledge rollups, side chains, …
- L3: Application layer, UI
◦ Allow blockchains to interact with each other
◦ Faster and cheaper transactions
◦ Infrastructure for developers
consensus (PoW, PoS) and all the technical details like block time and dispute resolution take place
increase scalability and transactions per second (system throughput)
Why do we have different layers? (SSD)
- Enhancing security (i.e., preventing double spends, resisting majority attacks like 51% attacks, and ensuring the integrity and reliability of the data) often requires complex consensus mechanisms and a high degree of node validation, which can affect scalability and decentralization
- Scalability: Increasing scalability (i.e., blockchain’s ability to handle a large number of transactions per second as the network grows) can compromise security if fewer nodes validate each transaction, or it can undermine decentralization if it leads to increased centralization of processing power (e.g., through large mining pools or centralized node clusters).
- Decentralization: High levels of decentralization often involve trade-offs with scalability, as transactions and data have to be propagated and agreed upon by a vast number of participants, which can slow down the process. Additionally, maintaining robust security in a highly decentralized network can be more complex and resource-intensive.
Blockchain Layers –>
Layer 3: apps–> Works as an additional application layer over L2 & L1 blockchains. Advantage?
Layer 2: Speed/Scale –> Work by moving transaction processing tasks away from the main chain and relaying them back after processing. Advantage?
Layer 1: Blockchains –> Work by validating and recording transactions on a distributed ledger using consensus mechanisms. Advantage?
Layer 0: Data transfer/Miners –> work by providing the physical infrastructure for mining and the transmission of information between nodes. Advantage?
L3: Enables interoperability among different blockchain protocols.
L2: Ensures scalability by reducing network congestion.
L1: Maintains the integrity of the network; Define rules for data validation and transaction execution.
L0: Ensures physical execution of blockchain protocols; supports the network’s overall stability and security
Blockchain layers: L0, L1, L2, L3
* L1s focus on … (PoW is often best to achieve those goals), which comes at the expense of poor scalability
* Scalability: transactions per time unit, often TPS.
* Consequences of poor scalability → …
◦ Low transaction speed
◦ High transaction fees
◦ (also: energy consumption)
* How to improve TPS?
… into different groups; shards
responsible for distinct subsets in the network activity, with varying degrees of transaction complexity
security and decentralization
network congestion
◦ Expand block size
◦ Change consensus mechanism
◦ Sharding mechanisms: partition blockchain data
X sends Y data via blockchain.
What steps are required?
Process perspective:
1. User/node will …. (Private key will generate a … and make sure that no one can alter it).
2. Then, the transaction will get …. The blockchain platform can use different methods, i.e. consensus algorithms, to verify whether the transaction is valid or not.
3. Once the nodes verify that the transaction is authentic, it will …
4. The block will then link up to the previous block, and then a new block will form a link with this block and so on.
initiate a transaction signing it with its private key; unique digital signature
broadcasted to the verifying nodes
get a place in the ledger with a timestamp and a unique ID to secure it further from any alteration.
Bitcoin versus Ethereum transactions
1. Bitcoin transactions
◦ Transaction model: …
◦ Fee structure: Transaction fee based on …
◦ Block Time: 10 minutes
- Ethereum transactions
◦ Transaction model: …
◦ Fee structure: …
◦ Block Time: 10-15 seconds
◦ Capability not just for P2P value exchange, also
…
Q: What is the key implication for data anonymity of the UTXO model?
⇒ …
Unspent transaction output (UTXO) model; tx size
in bytes
Account/balance (A/B) model
Gas fees to pay for computational burden
smart contracts
Union Find Algorithm may help map multiple addresses to single entity (ultimate owner)!
How new node authentication works.
X wants to join Y’s blockchain.
What steps are required?
Slide 54 – Really complicated 10+ steps process. To be read, added here in a simplified way later.
- Mining on proof-of-work(PoW) blockchains
1.1 Block creation: …
1.2 Hashing: miners try to find a block’s header hash ≤ target hash by … (trial-and-error: 232 = 4.29 billion possibilities) Q: What if no nonce worked?
1.3 Block propagation: s…
1.4 Block confirmation: … (block reward and transaction fees)
collect and list transactions, create a block header
changing only the 32-bit nonce
successful miner broadcasts new block to network for verification by others
block added to blockchain, release of mining rewards
- Validating on proof-of-stake(PoS)blockchains
2.1 Validator selection: …
2.2 Block proposal: …
2.3 Block finalisation: …, validators collect rewards,
fraud results in penalty = slashing
random selection, sometimes driven by stake size, age,…
Selected validator proposes block with transactions from mempool (memory pool) and other validators authenticate
enough attestations result in consensus
Merits of PoS
Sybil attack resistance: To mount a successful attack on a PoS network, an attacker would need to control a majority of the staked coins, which is economically impractical in a well-distributed and large network.
Energy efficiency
