Network Participants

On a basic blockchain network, there are two main participants:

  • Miners
  • Users

Miners

Miners on a blockchain network are not equipped with pick-axes. Instead, miners have a bit of a different role - they are there to confirm the blocks of transactions being processed constantly on the blockchain. The miners' role is important for two main reasons: they serve as validators for each and every transaction taking place on the network, and cumulatively they protect the network against any malicious external attacks. 

Miners are also the ones who have a voting right on any changes taking place in the network. The reason for this is that miners have an inherent interest in choosing the best options for the network, as doing otherwise would be akin to shooting themselves in the foot - any disruption in the network would hit them the hardest. 

A third important role which is often overlooked is that of serving as back-ups; miners are required to store a full copy of the ledger on their machines and therefore serve as decentralised back-up for the blockchain network.

Users

Users are the everyday participants who make use of the network, with the predominant use being that of transacting on the network. Anyone who makes use of the network such as being senders or recipients of transactions would qualify as blockchain users. Users, unlike miners, do not need to download a full copy of the ledger; it is enough if they are connected to the network via an Internet connection. Likewise, they do not have any voting rights due to their passive participation.

Block confirmation

Miners need to approve blocks through a simple majority vote. In essence, the first miner to solve a complex mathematical algorithm gets a block reward (which can be of a monetary nature) and broadcasts the solution to the rest of the network, who then in turn approve such solution and add the latest block onto their own chain. The process then starts all over again for the newest block. Miners constantly ensure that they are on the correct chain, which under normal circumstances is the longest chain which has the most recent block/s. The newest chain naturally is equivalent to the latest version of the distributed ledger.

What has just been explained is a very superficial overview of the most popular consensus method for confirming blocks, which is known as Proof-Of-Work and is used in Bitcoin. Other consensus mechanisms will be explored in another section.

Building blocks

The first block on a blockchain is known as the Genesis block. All subsequent blocks are built on top of each other. With each confirmed block, the previous blocks grow stronger and more resistant to change, as in order to change the older blocks, one would need to change all the other, newer blocks after it first. Therefore, the older the block, the more secure it is. Any attacker trying to change the data contained in older blocks would need to have an inordinate amount of power several times larger than that of the rest of the network, as any time spent trying to change such older blocks would mean time well-spent by the network creating newer blocks to consolidate the data contained in older blocks.