One of the many mechanisms that allow Bitcoin to function properly is the blockchain. As you may have discovered in the articles on the Bitstack blog, the blockchain makes it possible to avoid the double spending of the same bitcoin coin (what is called a UTXO).
As the name suggests, this blockchain is made up of blocks. In this article, we explore what Bitcoin blocks really are and how each block is built.
What is blockchain?
The blockchain is a register listing all Bitcoin transactions. It is used in the protocol so that each user is aware of past transactions. Thanks to this, we can prove the non-existence of a previous expenditure of bitcoins, and therefore avoid double spending.
This concept is very simply explained in the Bitcoin White Paper by Satoshi Nakamoto with the famous phrase:” The only way to confirm the absence of a transaction is to be aware of all transactions. ”
The objective of this register is thus to timestamp past transactions. In order to be able to put an hour on this information, we group them into blocks. Each block includes the fingerprint of the block preceding it in order to make them unchangeable, creating a kind of chain. This is why we speak of blockchain, or “blockchain” in English.
A Bitcoin block is mostly made up of two distinct parts. The first is its header, which contains 80 bytes of metadata. The second is the list of transactions executed.
Since the 2017 SegWit update, the size of a block is determined by a virtual unit called weight. The weight of a block is calculated by adding its real size, to three times its size, but without witnesses (signatures). The maximum limit is 4 million weight units. In theory, a Bitcoin SegWit block can therefore have a maximum real size of just under 4 MB. However, the actual average block size has normally fluctuated between 1 and 2 MB since 2017.
The arrival of the Ordinals protocol on Bitcoin at the beginning of this year 2023 affected this average to the rise. Since February, Bitcoin blocks have had a real average size of close to 3 MB.
The Bitcoin block header
The main part of a Bitcoin block is its header. When we talk about the fingerprint of a block, or its hash, it is indeed its header that we have passed twice in the SHA256 hash function.
To understand the composition of the header of a block, the best thing is to study a real one. Here is information on block No. 714 254, mined by F2Pool on December 15, 2021:
If you want to do the same on your Bitcoin node, run the “getblockheader” command followed by the fingerprint of the desired block on bitcoin-cli.
Thanks to this command, we discover several elements about the block studied. Not all of this information is included in the header. The real header of the block is composed of only 6 elements:
The block version (”version”). This makes it possible to keep track of Bitcoin protocol updates;
The imprint of the previous block (”PreviousBlockhash”). It is the cryptographic hash of the previous block header. In this case, it is the imprint of the block 714 253. As we explained to you in our article on how Bitcoin works, each block includes the fingerprint of the previous block;
Merkle's root (”Merkleroot”). It's the cryptographic fingerprint that's at the base of our Merkle tree. I'll explain what it is in the next part;
The timestamp of the block (”Time”). It is a measure of how long the block has been mined (according to the miner). This measure is established on theUnix time, that is, the number of seconds that have passed since January 1, 1970. There is some flexibility on this measure since it is sufficient for the timestamp to be greater than the median time of the previous 11 blocks for it to be valid;
The target (”Bits”). It is an encoding of the block's difficulty target used in Proof-of-Work. We were talking about it in our article on proof of work, the footprint must be less than or equal to the target value for the block to be valid;
The Nuncio (”Nuncio”). This is the value that can be changed by the miner during the search for a valid proof-of-work hash.
A Bitcoin block header contains only these 6 elements. The order getblockheader However, we receive other information that may be interesting to analyze, but that is not really part of the header itself:
The footprint of the block (”Hash”). This is the result of cryptographically hashing the header. If the block is valid, this footprint must be less than or equal to the difficulty target for proof of work (mining);
The number of block confirmations (”confirmations”). This indicates the number of valid blocks mined above this one at the time the command is executed;
The height of the block (”Height”). This is the place of the block in the blockchain. Here, we have the 714,254th Bitcoin block;
The median time of the last 11 blocks (”Mediantime”). This is the information that is used to verify that the timestamp of the block is in accordance with the protocol;
Accumulated work (”Chainwork”). It is the sum of the work of all the blocks in this chain. Remember, the chain valid on Bitcoin is the one with the largest amount of accumulated work;
The imprint of the next block (”Nextblockhash”). It is the cryptographic hash of the header of the next block. In this case, it is the imprint of the block 714 255.
Now that we have studied the first part of the block, i.e. its header, let's look at the second part of the Bitcoin block together.
The Merkle trees of a Bitcoin block
Transactions in a Bitcoin block are not simply listed one after the other. Instead, they are organized into a cryptographic accumulator called a “Merkle tree.” This makes it possible to produce a Merkle root, which is a very small summary of all the transactions in the block.
Its principle is quite simple to understand. Each transaction is first passed through a hash function. The resulting hashes are concatenated two by two (i.e. put end to end). Then, they are passed through a hash function again. We continue this process like this until we get a single hash called “Merkle root.”
As seen previously, this Merkle root is then included in the block header. This allows all transactions to be represented in a condensed manner in the header. Thus, the slightest modification of a past transaction changes the Merkle tree, so it also changes the Merkle root, and therefore, it changes the block header and its footprint. Since this fingerprint is used in the next block, the slightest modification of a past transaction finally breaks the Bitcoin blockchain.
Since 2017 and the introduction of SegWit, Bitcoin blocks actually contain 2 Merkle trees. The first contains the transactions without their witness, and the second contains the witness for each transaction. The root of the second Merkle tree is included in the Coinbase transaction so that changes can be detected.
📌 The coinbase transaction is the first transaction in the Bitcoin block. It allows the winning miner to collect the bitcoins due to him as a reward for his mining work. It is composed of the coinbase reward, which issues new bitcoins, and the transaction fees included in the block.
This is where the name “SegWit” comes from, which is the acronym for “Segregated Witness”, which in French means “separate witness”.
In the diagram above, we can see that the witnesses, noted “WTX”, have their own Merkle tree. The root of this tree is put into the coinbase transaction. Transactions without their witnesses also have their own Merkle tree. The root of the second tree is put in the header of the block. So, all the parts of all the transactions in the block are condensed into the header.
Conclusion
Blockchain is used on Bitcoin to avoid double spending. It acts like a timestamp server. A block is therefore simply a grouping of Bitcoin transactions with some metadata. Its structure is mainly divided into two spaces: the header and the Merkle trees.
The header of a block is composed of 6 elements: the version, the imprint of the previous block, the Merkle root, the timestamp, the difficulty target and the nonce.
Transactions, on the other hand, are grouped together in a Merkle tree. This cryptographic accumulator produces a root that is incremented in the header of the block in order to link everything.
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