The birth of blockchain technology has marked a great turning point in the history of storing and transmitting digital value. At the heart of this revolution is the concept of "Block" – a digital entity that serves not only as the basic unit of data storage but also as the foundation for the security, transparency and decentralization of the entire system. Understanding the block structure is not just about grasping dry technical specifications but is also the key to deciphering how trust is established in an environment that does not require mutual trust. This report, compiled and analyzed by the team of experts at Tan Phat Digital, will delve into the detailed anatomy of a block, the chain linking mechanism and the far-reaching impacts of this structure on the global financial and legal landscape in the period 2024-2025.
Basic Architecture and Philosophy of Blocks in Distributed Ledger Systems
A block in blockchain is defined in a way is essentially a digital "container" used to store a set of transactions that have been validated by the network. Instead of storing data in a centralized server that is vulnerable to attack or manipulation, blockchain distributes these blocks across a global network of computers (nodes). As new transactions arise, they are grouped and packaged into a new block. Once confirmed through consensus algorithms, the block is cryptographically tightly linked to the block immediately before it, forming a chain that cannot be reversed or modified.
The block's design philosophy focuses on three pillars: decentralization, immutability, and security. Decentralization ensures no single entity has absolute control. Immutability means that once data has been written to the block and the chain has grown in length, changing past information becomes computationally impossible. Security is maintained through cryptographic hash functions and digital signatures, ensuring that only those in possession of a valid private key can make transactions.
Detailed Anatomy of the Block Header: Technical Regulatory Authority
The block header is the most important element of a blockchain block, containing the metadata necessary to identify and authenticate that block without having to access the entire transaction data details. In the Bitcoin network, the block header has a fixed size of 80 bytes. This structure is optimized so that devices with weak configurations (such as mobile phones or short nodes) can participate in the validation process without downloading hundreds of gigabytes of data of the entire blockchain.
Detailed Data Fields in the Block Header
The detailed structure of a typical block header includes six main components, systematized by Tan Phat Digital as following:
Version (4 Bytes): Version of the block protocol, allowing tracking of software updates or new consensus rules. This field is updated when the network performs upgrades (Soft Fork or Hard Fork).
Previous Block Hash (32 Bytes): The double SHA-256 hash of the immediately preceding block header, forming a "chain" link. This data is updated as soon as a new block is created and linked to the chain.
Merkle Root (32 Bytes): The aggregate hash represents all the transactions contained in the block body. This value will change if any transactions in the block are added, removed, or modified.
Timestamp (4 Bytes): The time the block started being mined, in seconds since the Unix era. This field is continuously updated as miners search for block solutions.
Bits/Difficulty (4 Bytes): A metric that represents the network's current difficulty target in a compressed format. This difficulty is adjusted every 2,016 blocks (about 2 weeks for Bitcoin).
Nonce (4 Bytes): Random number changed by miners to produce a valid block hash that meets the difficulty target. The Nonce changes with each hash attempt during mining.
The Role of Previous Block Hash in Immutability
The connection between blocks is made through the Previous Block Hash field. Each block stores the hash of its predecessor, which creates a profound cryptographic dependency effect. If an attacker tries to change a transaction in block number $n$, the hash of that block will change completely due to the properties of the SHA-256 hash function: a small change in the input will lead to an extremely large change in the output. Since block number $n+1$ contains the hash code of block $n$, the hash code of block $n+1$ will also become invalid. To successfully perform forgery, the attacker would have to recalculate the entire hash of all blocks from the modified block to the current block faster than the rest of the network can generate blocks. This is the technical barrier that makes the blockchain an easy record to tamper with.
Merkle Root: Authentication Efficiency and Binary Tree Structure
Merkle Root is a single hash value created by hashing each pair of transactions in a binary tree structure (Merkle Tree). This process begins by hashing each individual transaction, then hashes the resulting hashes together in pairs until only a single hash remains at the root of the tree.
The presence of the Merkle Root brings two huge benefits to the blockchain ecosystem:
Fast transaction validation: To prove a particular transaction is in the block, a network node does not need to send the entire list of transactions, but only needs to send a "Merkle Path" consists of the intermediate hashes needed to reconstruct the Merkle Root.
Applications in Scaling Solutions: Protocols such as the Lightning Network use the Merkle Root to prove payment states without writing every single transaction to the main chain, significantly reducing the load on the base layer.
Timestamps and Network Time Synchronization Rules grid
Timestamps in blockchain are more than simply a record of time. It is part of strict consensus rules. In the Bitcoin network, a block is considered valid if its timestamp is greater than the average value of the previous 11 blocks and less than the actual network time by more than 2 hours. This mechanism prevents miners from manipulating time to gain an advantage in adjusting difficulty or performing certain attacks.
Nonce and Computational Limits
Nonce is the only variable that miners have complete control over. Since the size of Nonce is only 4 bytes, it can only hold a maximum of $2^{32}$ (about 4.29 billion) values. With the enormous computing power of modern mining rigs, this 4 billion value space is often exhausted in just a fraction of a second. When Nonce is exhausted and miners still haven't found a valid hash, they are forced to take other measures such as updating the timestamp or changing the structure of the Coinbase transaction (a transaction that creates new coins) in the block body to create a completely new block header and start the search process again.
Anatomy of the Block Body: Storing and Executing Transactions
If the block header is the controlling "brain", then the block body is the "store" “storage” holds the true value of the network – the transactions. Each transaction in the block body is a complex data structure that records the transfer of ownership of digital assets.
UTXO (Unspent Transaction Output) Model
Most modern blockchains such as Bitcoin use the UTXO model to manage balances. According to analysis from Tan Phat Digital, this transaction structure includes:
Version: Determines the set of applied transaction rules, ensuring compatibility between network nodes.
Input: Refers to the transaction identifier (TXID) and the output index of a previous transaction. This is proof of the legal origin of the money.
Output: Contains the value in the smallest unit (Satoshi) and ScriptPubKey. This field determines who has the authority to spend this money in the future.
ScriptSig: The unlock code contains a digital signature and a public key. It is proof of ownership of input UTXOs.
Witness Data: Signature data is decoupled for space optimization (in SegWit transactions), which reduces transaction size and resolves transaction plasticity errors.
Script Mechanism and Spend Condition Flexibility
Blockchain uses a stack-based programming language called Script to define spending conditions. ScriptPubKey is placed on the output of a transaction like a puzzle or a lock, and ScriptSig provides the answer or key to solve it. This combination allows for the creation of transactions ranging from simple like direct money transfers to complex like multisig wallets or basic smart contracts.
Genesis Block: The Genesis Block and Historical Mysteries
Every journey of thousands of miles begins with a single step, and for every blockchain, that step is the Genesis Block (Block 0). This is the only block that does not reference a previous block because no block exists before it. In the data structure, the Previous Block Hash field of this block is filled with zeros.
Bitcoin's Genesis Block: A Political Manifesto
Created on January 3, 2009 by Satoshi Nakamoto, Bitcoin's Genesis block contains features that will never be repeated:
Symbolic message: Satoshi embedded the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" into the block's data. This is not only a time stamp but also a statement criticizing the centralized financial system and the collapse of major investment banks during the 2008 financial crisis.
50 BTC Unspent: A special feature of Bitcoin's source code is that this first 50 BTC transaction can never be spent. Experts still debate whether this was a technical error by Satoshi or a deliberate attempt to ensure the first block was always a permanent anchor in the database.
6-day break: Block number 1 was mined only on January 9, 2009, which was 6 days after the Genesis block. Some theories suggest that Satoshi took this time to test the stability of the system.
Today, the Genesis block has become a "digital memorial", where Bitcoin supporters still regularly deposit small amounts of Satoshi as a form of gratitude, knowing that the money will forever be irretrievable.
Consensus Mechanism: The Transformation of Validation Structure and Process Block
How a block is created and accepted by the network is determined by the consensus mechanism. The differences between Proof of Work (PoW), Proof of Stake (PoS), and Proof of History (PoH) lead to profound variations in block structure and performance.
Proof of Work (PoW): Energy-Based Competition
In PoW, miners compete by expending electrical energy to find a valid Nonce. Blocks in PoW are physical proof that a large amount of resources have been spent securing the network. Its security lies in the fact that the cost of rewriting history is too great compared to the benefits that can be obtained.
Proof of Stake (PoS): The Shift to Economic Power
In PoS, "Validators" (validators) replace miners. The likelihood of being chosen to create a block is proportional to the number of coins they stake.
Validator & Staking: For example, Ethereum requires 32 ETH to operate a validator node.
Time Structure: PoS divides time into "Slots" (12 seconds) and "Epoch" (32 slots). In each slot, a validator is chosen as the block proposer.
Slashing: This is the most important security mechanism of PoS. If a validator commits fraud, some or all of their staking funds will be burned.
Proof of History (PoH): Solana's Cryptographic Clock
Solana introduces a groundbreaking approach to solving the time synchronization problem. PoH uses a continuous hash chain (VDF - Verifiable Delay Function) to create a historical record of elapsed time. This allows validators to determine the order of transactions without communicating with each other, helping Solana achieve extremely fast block generation rates.
Network Security and Block Structure Attacks
Despite being designed with high security, blockchain still faces potential threats that target the block validation mechanism.
51% Attack
This is the most dangerous scenario when an individual or group controls more than 51% of the network's hashing power (PoW) or coin staking (PoS). With this power, they can:
Double Spending: Send money to someone, then create a longer secret blockchain that does not contain that transaction and make it public to overwrite the old chain.
Block transactions (DoS): Prevent certain addresses from making transactions or from being found by other miners block.
However, for giant networks like Bitcoin, the cost of carrying out this attack is extremely large. According to estimates from Tan Phat Digital by 2024, to attack Bitcoin, an entity needs to possess more than 304 EH/s of computing power, equivalent to millions of ASIC devices worth billions of USD.
Multi-layer Evolution: From Layer 1 to Layer 3 and App-chains
To solve the "Impossible Trinity" (Blockchain Trilemma) - including Security, Decentralization and Scalability – layered block structure.
Layer 1 (Base Layer): Blockchains like Bitcoin and Ethereum provide the highest level of security and decentralization. This is where blocks are finally confirmed and stored permanently.
Layer 2 (Extension Layer): Solutions like Rollups (Optimistic & ZK) help compress thousands of transactions into a single batch and only send valid proofs to Layer 1. This significantly reduces gas fees and increases processing speed.
Layer 3 and EDU Chain: The specialized application layer such as EDU Chain serving the decentralized education industry (EduFi). It enables on-chain storage of learning certificates and content copyright management through Publisher NFTs. EDU Chain has quickly become a leading Layer 3 blockchain with a TVL surpassing 150 million USD.
Strategic Context 2025: Blockchain as a National Asset
The year 2025 marks a turning point when blockchain data blocks become part of the national strategy. The United States has formalized the establishment of a Strategic Bitcoin Reserve (SBR).
Top Bitcoin Holding Countries Ranking (July 2025):
United States: 198,000 BTC
China: 194,000 BTC
Kingdom UK: 61,243 BTC
Ukraine: 46,351 BTC
Bhutan: 13,029 BTC
El Salvador: 6,003 BTC
Vietnam is also completing the digital asset legal framework in 2025 to prevent money laundering and promote digital economic development. With about 17 million people owning digital assets, Vietnam currently ranks 5th in the world in terms of interest in this field.
Typical Case Studies on Block Structure and Network Security
To better understand the applicability and practical risks, Tan Phat Digital has compiled the following 5 important case studies:
1. Bitcoin Fork Incident (2013): When Database Failure
On March 11, 2013, the Bitcoin network experienced a technical crisis when software versions 0.7 and 0.8 suddenly forked into two different chains. The cause is an error in the BerkeleyDB database (BDB) related to lock limits in blocks. The developers had to quickly reach a consensus to call on miners to downgrade to version 0.7 to merge the chain, avoiding the entire system from collapsing permanently.
2. 51% Attack on Bitcoin Gold (2018)
In May 2018, the Bitcoin Gold (BTG) network was hit by a 51% attack, resulting in losses of over 17.5 million USD. The attacker controlled the majority of hash power to perform double-spending, targeting exchanges instead of individual users. This incident is the clearest demonstration that small blockchains with low hashing power are vulnerable to actors possessing large resources.
3. Ethereum Classic Attack (2020)
In just a few days in August 2020, Ethereum Classic (ETC) was attacked 51% consecutively. In one attack, bad actors stole approximately 807,260 ETC (equivalent to $5.6 million) by renting hashing power from the NiceHash service at a cost of only about $192,000. The attacker created private blocks and then published them to overwrite the network's valid blocks, allowing them to reclaim funds spent on exchanges.
4. EIP-4844 (Blobs) and the Data Revolution for Layer 2 (2024)
Ethereum's Dencun upgrade in March 2024 introduced the "Blobs" structure (EIP-4844). Previously, Layer 2s had to store data in the calldata field, which was very expensive and permanently stored. Blobs allow temporary data storage (about 18 days) in a separate space, helping to reduce transaction fees on Layer 2 like Arbitrum or Optimism from 80% to 99%. However, transmitting larger blocks due to containing Blobs also slightly increases the fork rate of the network.
5. EDU Chain: Layer 3 Specialized for Education Identity (2025)
EDU Chain represents the trend of App-chains (application-specific chains). Built on Arbitrum Orbit, EDU Chain optimizes the block structure to store learning certificates as On-chain credentials. During the testing phase, the network processed more than 86 million transactions with the participation of hundreds of thousands of unique active wallets. This case study shows the customization of the block structure to serve specific industries such as education (EduFi), rather than simply serving finance.
See more: What is a 51% attack?
Distinguishing Block in Blockchain and Block on Social Networks
A common confusion is to equate the concept "block" (data block) with the "block" action on social networks. Tan Phat Digital would like to clarify the difference:
Immutability: In blockchain, a confirmed block is permanent. On social networks, blocking an account can be easily reversed (unblocked).
Purpose: Blockchain is used to build trust and store value. Social networks are used to manage personal experiences and prevent trouble.
Implementation mechanism: Blockchain is based on decentralized cryptographic algorithms. The social network is based on the enterprise's centralized server.
Frequently Asked Questions (FAQs) About Block Structure
In addition to the above mentioned issues, below are the 10 in-depth questions that users are most interested in:
What are Empty Blocks and why do they exist? Sometimes miners create a block that contains no transactions other than reward transactions (coinbase). This happens when miners find a block right after the previous block and start mining immediately for rewards without updating the new transaction list from the cache.
What does Block Height reflect? This is the block number in the chain, starting from the Genesis block (height 0). Block Height helps determine the location of the block and calculate the length of the current blockchain.
How many confirmations are needed for a transaction to be considered absolutely secure? Although there is no absolute number, in the Bitcoin network, 6 confirmations (about 1 hour) is generally considered secure for large transactions. For miners, block rewards can only be spent after 100 confirmations to ensure the block is not discarded due to forks.
What is the core difference between Block and Node? Block is the entity that stores data, while Node is the device (server, computer) that participates in the network to store, verify and propagate those blocks. The node acts as a "gatekeeper" checking the validity of every new block.
What special role does the Coinbase transaction play in the block? This is always the first transaction of every block, used to pay block rewards and transaction fees to miners. This is the only way that new coins (like Bitcoin) are introduced into circulation.
What is the difference between Orphan Block and Uncle Block? Both are valid blocks but not in the main chain. "Orphan Blocks" (common in Bitcoin) are not rewarded, while "Uncle Blocks" (in old Ethereum PoW) still receive a small reward to incentivize miners.
What is Maximum Extractable Value (MEV)? MEV is the maximum value that a miner or validator can further profit by reordering, adding or removing transactions in a block to take advantage of the Arbitrage or front-running.
How will Verkle Trees replace Merkle Trees in Ethereum? Verkle Trees use polynomial commits which produce much smaller proofs than Merkle Trees (from 150 KB down to 1-2 KB). This allows "stateless nodes" to operate more easily.
How do Blobs (EIP-4844) help reduce Layer 2 fees? Blobs provide a temporary data space (only lasting about 18 days) instead of permanently storing it on Layer 1. Because it does not consume permanent storage resources, the data sending fee of Rollups is reduced by up to 80-99%.
Can the data in the block be changed if the majority of the network agrees? In theory, if a group controls more than 51% of the network power, they can perform a "reorganization" to change the nearest blocks. However, changing blocks that are deep in history (like the Genesis block) is impossible due to the enormous financial and computational costs.
Future Prospects
The block structure is one of the greatest inventions of the digital era, perfectly combining cryptographic mathematics and game theory. From the smallest data fields like Nonce to macro applications like the National Stockpile, we see a powerful transformation of data into assets and trust. Tan Phat Digital believes that mastering the block structure is the key to positioning yourself in a world where decentralization is the foundation of financial freedom.
Hash(Block) = SHA256(SHA256(Block_Header)
Formula above is the beating heart of the Bitcoin network, maintaining the stability of a digital economy worth trillions of dollars every 10 minutes. That stability is the most eloquent testament to the power of the block structure in the blockchain.
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