How Ethereum Transfers and Validates Transactions and Blocks
Ethereum, like other blockchain platforms, relies on a network of nodes to process and verify transactions and blocks. While Bitcoin’s decentralized architecture differs from Ethereum’s, the underlying principles are similar. In this article, we’ll explore how transactions and blocks are relayed in Ethereum and discuss the differences from Bitcoin.
The Process
Ethereum works using a peer-to-peer network that allows nodes to validate and process transactions without relying on a central authority. Here’s a high-level overview of the process:
- Transaction Creation: A user initiates a transaction by sending one or more inputs (value) to another user. The sender creates a transaction object, which includes details such as the sender’s public key, the recipient’s public key, and the input values.
- Transaction Validation: Nodes verify the validity of the transaction using complex mathematical algorithms called « hash functions ». These hash functions ensure that the transaction contains enough computing power to be difficult to manipulate.
- Block Creation: A group of unconfirmed transactions (called a block) is created by nodes. Each block contains one or more transactions and a list of transactions that still need to be verified.
- Block Validation
: Nodes verify each transaction in the block using their own copy of the blockchain. They calculate the hash values of the block and compare them to hashes generated by other nodes.
- Block Merging: If all blocks in the network agree on a valid state, they are merged into a single, coherent block called the « blockchain header ».
- Node propagation: The newly validated block is broadcast to the entire Ethereum network, where it is processed and verified by nodes.
Relayed transactions
Unlike Bitcoin’s decentralized architecture, which relies solely on nodes to process transactions, Ethereum uses a more complex protocol that involves:
- Nodes: Specialized computers called « nodes » run the Ethereum software on their own machines. They verify transactions and store them in the blockchain.
- Blockchain validation: Nodes validate transactions using their local copies of the blockchain. If a transaction is valid, it is broadcast to the network.
The main difference between transaction relaying in Bitcoin and Ethereum is that Bitcoin nodes do not have access to the entire blockchain at all times. Instead, they rely on a single block (the blockchain header) that contains all valid blocks up to a certain point in time. In contrast, Ethereum’s validation process is continuous, with new blocks being created as data accumulates.
Relayed Blocks
In Bitcoin, each block is verified by multiple nodes and then included in the blockchain header. This process is called « block validation » or « block propagation. » Each node verifies transactions and adds them to a list of unconfirmed transactions (a « block »). The most significant difference between Bitcoin’s block validation process and Ethereum’s is that Bitcoin nodes can verify blocks independently, without relying on another node’s signature.
Conclusion
In conclusion, while Bitcoin’s decentralized architecture relies solely on nodes to validate transactions and store the blockchain, Ethereum’s protocol uses a more complex system involving nodes, validation, and continuous propagation. Understanding these differences helps you appreciate the unique strengths and weaknesses of each platform and how they contribute to their respective use cases.