Ethereum operates on a single ledger shared across independent nodes.
Each node (operated by miners) must maintain synchronization through consensus, ensuring all copies of the ledger agree.
Consensus in Blockchain
Definition: Agreement among nodes on the current state of the ledger.
Consensus prevents inconsistencies, akin to ensuring all team members use the same updated requirements document.
Transaction Processing
Pending transactions are continually arriving on the Blockchain. These pending transactions must be verified and added to the Blockchain.
The minors use special software to verify the pending transactions and add the transactions to what is called a “proposed” block.
As the pending transactions are verified, the “proposed” block fills up and it soon becomes a full block ready to be added to the Blockchain.
Block Details: Contain transaction details like sender, recipient, amount, gas fees, etc.
Block Time pause during which miners complete the consensus process.
Once one minor wins the competition, the block, is added to the Blockchain and the new block is relayed to all the other nodes, thereby synchronizing the Blockchain.
Proof of Work (PoW)
Miners solve complex mathematical puzzles (hashing) to validate transactions.
The key goal is to find a nonce, which helps create a hash for the block.
Once the hash is verified by at least 51% of nodes, the block is added, and transactions resume.
Miners are rewarded with Ether (ETH) for successfully finding the nonce
Drawbacks: High computational cost, energy consumption, and environmental impact.
Proof of Stake (PoS)
Ethereum 2.0 plans to replace PoW with PoS.
PoS is one of several alternative consensus algorithms, alongside:
