What is a block in Bitcoin?

A block is a bunch of transactions that have been added to the blockchain.

How are blocks formed?

Blocks are constructed during the process of mining.

Mining basics

When you make a bitcoin transaction, it isn't added to the blockchain straight away. Instead, it is held in a temporary pool of transactions.

Diagram showing the memory pool inside a node on the bitcoin network.

I've called it a "transaction pool" here, but the official term is memory pool.

If you are a miner, your job is to gather transactions from the transaction pool in to a "candidate block", and to try and add this candidate block to the blockchain.

Diagram showing a transactions from the memory pool being collected in to a candidate block.

Block header

Each candidate block is given a block header, which is basically a bunch of metadata containing information about the contents of the block.

Diagram showing a block header being constructed for a candidate block.

Miners use this block header as the starting point when trying to add a block to the blockchain.

Metadata – data that describes other data, serving as an informative label.

How are blocks added to the blockchain?

To add a candidate block to the blockchain, you hash the data in the block header and hope that the result is below a certain target value.

Diagram showing a block hash for a candidate block being compared to the current target.

The target is calculated from the difficulty, which is a value set by the bitcoin network to regulate how difficult it is to add a block of transactions to the blockchain.

Don't worry, I know this difficulty and target business is a little confusing at first, but it will make more sense over time.

A value used to regulate how quickly blocks are solved. All nodes agree on the same calculation of the difficulty for the current height of the blockchain. It adjusts every 2,016 blocks (roughly every 2 weeks) to help create an average of 10 minutes between blocks.

Think of the target as the limbo pole for candidate blocks – the greater the difficulty, the lower the target, and the more difficult it is to find a block hash that is below this value.

An extra number

I lied. You don't actually hash the block header on its own. You actually hash it with an extra number.

Diagram showing a nonce being used to change the resulting block hash for a block header.

This extra number is called a nonce, and it's basically a dummy field that miners use to help them get a block hash below the target value.

Nonce – an arbitrary number used only once in a cryptographic communication.

If the first nonce doesn't work (starting at 0), keep incrementing it and hashing the block header. If you're lucky you'll find a nonce that returns a block hash that is below the current target value.

Diagram showing a successful nonce producing a block hash below the current target.

I know these hash values contain letters, but you can still think of them as numbers like any other. They're simply hexadecimal values, and computers love working with them.

Solving the block

Once you've found nonce that produces a low-enough block hash, the block is "solved" and all of the transactions in this block are added to the blockchain.

Diagram showing a successfully mined block being added on to the blockchain.

All miners will now head back to the transaction pool and start work on the next candidate block. They will use your successful block hash in their next block header (so they can build upon the block you've just mined), and the race to add a new block of transactions to the blockchain starts again.

Good work.