We are heading back to the nitty-gritty of blockchain and crypto this week with the letter “N”. In our previous article, we briefly explored the world of crypto mining. In today’s Crypto Terminology: A to Z series, we take a look at several aspects of the blockchain that are considered the cornerstones of crypto.
In blockchain terms, data on a blockchain is managed and processed by a peer-to-peer network that is responsible for authenticating transactions on a digital decentralized public ledger. Participants on this network will help to verify transactions autonomously, and no central entity is able to make changes to the data records on this blockchain, thereby ensuring that the data is immutable and incorruptible.
Delving into how a blockchain network manages data, nodes are not only digital receptacles that contain the complete records of current and past data but also help to share and broadcast new blocks of transactions within networks. Nodes work with other nodes to make sure that the stored data is secure and accurate. Whenever nodes process a transaction, they earn transaction fees.
Typically added to a hashed block on a blockchain network in the Proof of Work mining process, a nonce includes either a time-related value such as a timestamp, or a string of random bits to minimize the probability of this number being repeated. A nonce facilitates the increasing difficulty of solving blocks. A miner’s goal in such a system is to be the first one to find the nonce attached to a block and solve it to be rewarded with cryptocurrency.