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What makes a Bitcoin transaction successful only after it has been validated, so how does bitcoin get validated?
Once you make a transaction on a blockchain, your transaction data gets stored in a new block; this new block is then added to the blockchain system. Before this process can occur, the information contained in the block must first be verified by the network. This is made possible by the creation of a hash.
The sole purpose of a hash is to identify data stored in the block; it is a 256-bit number created by nodes.
Hash is created when several nodes come together to solve complex mathematical problems. After successfully solving these complex maths problems, each node has to ensure their calculations are right.
The creation of a new hash and solving of mathematical problems is known as mining.
Nodes are the miners who use the computer (computers with high computational power) and specialized computer hardware to solve these complex, mathematical problems.
With the absence of a centralized authority, validation protocols become essential for the operation of the blockchain. These protocols are generally apparent when trading transactions through platforms like Bitcoin code are in operation. here are some of the main protocols;
This protocol is the first. It was introduced with bitcoin in 2009 and remains the most used across all blockchain networks. It works for Bitcoin, Ethereum, Bitcoin, and many others, but on the downside, mining using the Proof of Works system starts very simple with little demand for computing power and electricity, but as the network grows, so makes the demand for more power. This is why mining top cryptos demands high technology gadgets and electricity consumption; mining is less eco-friendly and expensive for miners to maintain.
Proof of Stake was created to correct the shortcomings of Proof of Works; this protocol makes the mining process more accessible by reducing the computing power required to mine. This protocol has some rules and methods for picking nodes. These rules are based on;
Another feature introduced by Proof of Stake is the payment method. All coins are pre-mined and issued, so nodes are rewarded with a transaction fee rather than being paid in newly issued coins. It is important to note that nodes are regarded as forgers, not miners because mining doesn't occur.
Proof of Works and Proof of Stake protocols are the main validation protocols. Every other protocol in the blockchain is mostly just variants. Each of these variants attempts to solve one shortcoming or the other.
There are many more protocols but let us stop at these two. Let us have it at the back of our mind that validation protocol is essential; it has witnessed a lot of changes; these changes are meant to make it better.
We define bitcoin as a chain of digital signatures. Each owner transfers bitcoin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.
— Satoshi Nakamoto,
The above statement was part of Nakamoto's plan for making Bitcoin decentralized. This leaves the question, who will be responsible for verifying transactions if we attain decentralization? This question was answered in Bitcoin Whitepaper, and that was the birth of the first verification protocol, Proof of Works.
Proof of Works had its shortcomings; this led to the birth of many other protocols, each trying to make the blockchain verification process easier and faster.
