What is the reason for the block chain? (What is the block effect?)

The block chain is a special structure used to achieve scalability in the block chain. This structure allows transactions to remain consistent without changing the main chain or state, thereby improving efficiency. Due to the different scalability and consensus algorithms of each chain, each chain can have its own fork upgrades and recombination.

For Bitcoin, it has a unique feature that its underlying public chain (such as Ethereum) also has functions similar to side chains, but it does not rely on a single node as a validator. Regarding these issues, Samson Mow, Chief Strategy Officer of Bitcoin development company Blockstream, believes that both types of data transmission methods are based on two main components: the communication protocol between miners and users. If “proof of work” is an incentive mechanism, then Bitcoin is an infrastructure created for other cryptocurrencies. Therefore, theoretically, when an application is used to pay a specific amount, a large amount of data will be transferred to this platform. However, although the Bitcoin network itself is an important infrastructure project, there have been some limitations in the practical process. (Bitcoinist)

The second characteristic of Bitcoin is that it operates without any central authority. According to research reports from BitMEX, only a few entities control the majority of transactions in the Bitcoin blockchain, and these participants are not responsible for maintaining the entire system as they did before. Therefore, if someone tries to attack a part of the Bitcoin ecosystem, action needs to be taken to prevent more nodes from joining the system. Nevertheless, Bitcoin can still protect the security of the block chain by sending messages to multiple different block chains and package transactions into new blocks, effectively preventing malicious activities. However, even the two types of bitcoin assets most relevant to Bitcoin have not completely stopped operating. (Trustnodes)

What is the block effect?

The concept of block chain has further developed in recent years, so people have more awareness of the block effect. But what we see now is a trend where some parts of the chain structure are divided into two main layers, one composed of individual nodes and the other composed of multiple nodes.

This characteristic is called the “block effect”. When a block appears and becomes a new block, it can be seen as a line with a large number of transaction records and information around it, enabling every participant in the network to make effective decisions (i.e., consensus). This forms a phenomenon: if there are enough transactions in a ledger that do not comply with the rules, it will lead to the collapse of the entire system. This is the so-called block effect: the process of adding certain data to the block and changing it after a period of time. This process is called blockization. What is the block effect? In simple terms, “blocky” refers to a specific function or behavior within a system that has a certain number of characteristics, including but not limited to the following three points: 1. Small block interval; 2. Large timestamp; 3. Average size; 4. Large total number.

As we mentioned earlier, any meaningful information is likely to change due to changes in block height, but they may also change due to other factors.

For example:

1. As the correlation between the price of Bitcoin and fiat currency increases, the rate of increase in the price of Bitcoin will also increase;

2. Due to reasons such as the expansion of mining scale, market demand continues to grow, and the Bitcoin mined by miners will not decrease, which makes many people use Bitcoin as a way of asset allocation;

3. Due to the complexity and volatility of the crypto market and changes in investor risk preferences, the inflation rate of Bitcoin has also increased.