The following are the components of a Blockchain network:
It is of two types —Full Node and Partial Node.
Full Node: It keeps a complete record of all transactions. It is capable of validating, accepting, and rejecting transactions.
Partial Node: It is also called a "Lightweight Node" because it doesn't keep a full copy of the blockchain ledger. It only keeps track of the transaction's hash value. This hash value is the only way to get to the whole transaction. These nodes have a small amount of storage and can't do much.
It is a computerized collection of information. We've used the word "digital" here because the money that is traded between different nodes is a digital currency called cryptocurrency. Ledgers come in three different kinds. They are
Public Ledger: Everyone can see and understand it. Anyone who is part of the blockchain network can read or write.
Distributed Ledger: All of the nodes in this ledger have their own copy of the database. Here, the job is done by a group of nodes working together to check transactions and add blocks to the blockchain.
Decentralized Ledger: No single node or group of nodes is in charge of this ledger. Every node takes part in getting the job done.
It is a digital wallet that lets people store their cryptocurrency. In the blockchain network, every node has a Wallet. Public and private key pairs are used to keep the privacy of a wallet in a blockchain network. The money in a wallet doesn't need to be changed into another currency because it can be used anywhere. Cryptocurrency wallets are mainly of two types:
1. Hot Wallet: These wallets are used for everyday internet-connected transactions. Hackers can attack this wallet as it is connected to the internet. There are also two different kinds of hot wallets:
Online/ Web wallets: These wallets run on the cloud platform.
Examples: MyEther Wallet, MetaMask Wallet.
Software wallets: These include wallets for your computer and wallets for your phone. Desktop wallets can be downloaded to a computer's desktop, and the user has full control over the wallet. Example: Electrum is a type of desktop wallet.
Mobile wallets: They are designed to operate on smartphone devices.
Example: mycelium.
2. Cold Wallet: There is no way to connect these wallets to the internet. It is very safe, and hackers can't get in. The user buys one of these wallets. For instance, a paper wallet and a metal wallet.
Paper wallets: Paper wallets are offline wallets that use a piece of paper with the address written on it. QR codes are used to print the private key. For cryptocurrency transactions, a QR code is scanned.
Hardware wallet: A hardware wallet is a physical electronic device that uses a random number generator.
The focus of wallets is on these three things —
Privacy
Transactions should be secure
Easy to use
Public and private key pairs are used to keep the privacy of a wallet. A private key is used to both send money and open a message that has been encrypted. This makes transactions safe.
A "number only used once," or "nonce," is a number added to a hashed or encrypted block in a blockchain. "Nonce" is an abbreviation for "number only used once." The 32-bit number that is made up of random bits and is only used once helps to make a new block or verify a transaction. It is used to increase the security of the transaction.
It is choosing the number that can be used as the nonce is hard. It requires a lot of trying and failing. First, the miner makes a guess. Then, it adds the nonce that was guessed to the header's hash. After that, it hashes the value again and checks if it matches the target hash. Now, it checks to see if the hash value that was made meets the requirements. If all of the conditions are met, the miner has made an answer and is given the block.
Hashing is used to change the size of the data to a fixed size. It is an essential part of encryption. In a blockchain network, the hash value of one transaction is used as the input for another transaction. Here are some things about the hash function:
Collision resistant
Hiding
Puzzle friendliness