A quick look into the world of Blockchain and Nodes.
As we prepare for the launch of Dropilchain I thought I would be the perfect time for us to learn how a blockchain work and the functions of nodes.
Here are some of the benefits Dropil Chain will include:
- A fully Scalable blockchain
- Near-Zero Fees for transactions on Dropil Chain
- 10,000+ Transactions Speed for Transactions
- Allow anyone to issue their own Coin/Asset on our blockchain
- Proof of Stake Blockchain (Earn Drops for securing the network)
- A fully distributed public ledger of all transactions and accounts
- 51% attack resistance proof & quantum-proof security
- Username purchasable registered addresses (Register a username on an address such as (drop123gn6j23lmexu0qx5qhmgxgunmjcqsx8g5ueq2)
- Complete API solution to integrate Dropil Chain into any project/solution/app/etc.
- Allow projects to white-label their own blockchain using Dropil Chain (Get off ERC20)
- Many more future developments planned!
Let's start by explaining what a blockchain node is. Generally, every participant in a coin's network is a node. There are different kinds, yet each of them shares one specific characteristic-- you'll need particular equipment in order to host or merely link to one.
A blockchain, originally block chain, is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block,a timestamp, and transaction data (generally represented as a Merkle tree).
By design, a blockchain is resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.
Blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. The identity of Satoshi Nakamoto is unknown. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications, and blockchains that are readable by the public are widely used by cryptocurrencies. Blockchain is considered a type of payment rail. Private blockchains have been proposed for business use.
MOST COMMON TYPE OF NODES
Full nodes act as a server in a decentralized network. Their main tasks include maintaining the consensus between other nodes and verification of transactions. They also store a copy of the blockchain, thus being more secure and enable custom functions such as instant send and private transactions.
When making decisions for the future of a network, full nodes are the ones that vote on proposals. If more than 51% of them don’t agree with the proposition, it gets skipped. In some cases, this can lead to a hard fork in which the community cannot agree on a certain change and thus go their separate ways, creating two chains. The most well-known example of that happening is the (BCH) Bitcoin Cash fork.
A concept you might already be familiar with, miners are actually nodes (either full or light ones) which aim to prove that they’ve completed the required work to create a block. Hence the consensus name Proof of Work. To complete the task, as I mentioned above, miners need to either be an archival full node themselves or receive data from other full nodes on the network to know the current status of the blockchain and the required parameters for the next block in line.
Participants in the process employ hardware components (be that CPUs, GPUs or ASICs) to solve a cryptographic problem. The first person to complete the task broadcasts his results to the network so it can be verified by full nodes and once consensus is achieved – he is granted the right to add a block to the existing blockchain. For their work, miners are rewarded a pre-defined amount of coins in addition to any transaction fees for the block. This set reward amount is called coinbase or a coinbase transaction. Considering it’s the first transaction in the block, it’s free of charge, as the miner himself created the block and included it.
Staking can be compared to having a traditional fiat money deposit. You buy coins and hold them, while in return you receive an interest back as a reward. While there are different takes on the Proof of Stake consensus mechanism, the main characteristic is that earning money can be compared to participating in a lottery. Staking is a game of chance, which while with a lower barrier to entry, offers less certainty compared to mining and can be confusing at times.
The end goal is to determine, based on a pre-defined set of rules and luck chance factored in, who will be next to create a block and get rewarded. Factors include coin age (how long you’ve had your coins), how many you have and their ratio to available ones in the network. In staking, you don’t need any expensive machinery, you only keep your crypto wallet online 24/7, which can be done with a device like the Raspberry Pi.
To be able to stake, you will need to become a full archival node, i.e. download the core wallet for the coin and keep the entire blockchain on your device. If you’d like to explore the concept more in-depth or learn which the top staking coins are, you can do so by visiting the www.staking.com.
BONUS VIDEO: TUE INVENTION OF MONEY & CURRENCY