Different blockchains have varying block specifications. These specifications determine the characteristics of the blockchain and the performance of the cryptocurrency network it powers.
Blockchain technology is what powers a cryptocurrency network. It provides the decentralised, distributed and immutable properties for which these digital assets are known. And one of the most critical elements of a blockchain is its individual blocks. A block is like a file or a collection of encrypted information about recent transactions.
Network validators verify several transactions, bundle them into a block, and add it to the blockchain. Every block added to the blockchain is distributed among the network nodes. This makes blockchain data visible to all and impossible to tamper with or modify.
It’s important to note that the different blockchains have varying block specifications. These specifications determine the characteristics of the blockchain and the performance of the cryptocurrency network it powers. So, tag along as we list and explain some common block specifications and how they affect network performance.
Block size refers to the amount of information a block can carry. It is generally measured in megabytes (MBs). The larger the block size, the more data each block can store. For instance, the block size on the Bitcoin network is 1 MB, whereas that of Bitcoin Cash is 32 MB. The limited block size for Bitcoin can be an issue when network traffic increases. Miners can only fit a certain number of transactions into one block. This results in longer waiting times for transaction confirmations and the need to pay higher gas fees to ensure trades go through.
This refers to the average time a network takes to add a new block. It is a measure of the time taken by miners or validators within a network to verify transactions, bundle them into a block and add it to the blockchain. Bitcoin has a block time of around 10 minutes, while Ethereum only takes around 14 seconds.
Miners and validators are rewarded every time they add a new block to the blockchain. This is known as a block reward and is generally paid in the form of the blockchain’s native cryptocurrency. For instance, the current block reward for Bitcoin is 6.25 BTC. On Monero, it is 1.26 XMR, and on Dogecoin, it is 10,000 doge. This reward incentivises miners and validators to continue verifying transactions and adding new blocks to the blockchain.
Block difficulty only applies to proof-of-work blockchains. It denotes the effort required to mine a block. Blockchain networks constantly updates the difficulty level to ensure block times stay consistent. For instance, if block times start to increase, the difficulty will be reduced and vice-versa.
Every blockchain is made up of a series of blocks, organised sequentially. The block height is a value that denotes the number of blocks preceding a given block in the blockchain. For instance, the first block on Bitcoin, the Genesis Block, had a block height of zero. Block height is also a key piece of information for users looking to find transaction details using an explorer.
Block height is also an important network marker. It allows the project devs to fix a time for network upgrades. For instance, the much-awaited Ethereum merge occurred at block height of 58,750,000,000,000,000,000,000.
Every blockchain has varying specifications. Understanding these specifications gives us a better idea of a blockchain’s pros and cons, future potential and how it measures up to other blockchains. So keep these pointers in mind the next time you assess a blockchain; they will help you paint a better picture of the network’s capabilities.