lbcd/blockchain

blockchain

Bitcoin Chain Processing Overview

Before a block is allowed into the block chain, it must go through an intensive series of validation rules. The following list serves as a general outline of those rules to provide some intuition into what is going on under the hood, but is by no means exhaustive:

• Reject duplicate blocks
• Perform a series of sanity checks on the block and its transactions such as verifying proof of work, timestamps, number and character of transactions, transaction amounts, script complexity, and merkle root calculations
• Compare the block against predetermined checkpoints for expected timestamps and difficulty based on elapsed time since the checkpoint
• Save the most recent orphan blocks for a limited time in case their parent blocks become available
• Stop processing if the block is an orphan as the rest of the processing depends on the block's position within the block chain
• Perform a series of more thorough checks that depend on the block's position within the block chain such as verifying block difficulties adhere to difficulty retarget rules, timestamps are after the median of the last several blocks, all transactions are finalized, checkpoint blocks match, and block versions are in line with the previous blocks
• Determine how the block fits into the chain and perform different actions accordingly in order to ensure any side chains which have higher difficulty than the main chain become the new main chain
• When a block is being connected to the main chain (either through reorganization of a side chain to the main chain or just extending the main chain), perform further checks on the block's transactions such as verifying transaction duplicates, script complexity for the combination of connected scripts, coinbase maturity, double spends, and connected transaction values
• Run the transaction scripts to verify the spender is allowed to spend the coins
• Insert the block into the block database