Blockchain is known for being a decentralized ledger with distributed
storage. It has changed whole industries across borders by increasing security,
transparency, and reliance on intermediaries. Thus, from its initial design for
cryptocurrencies like Bitcoin, Blockchain extends its transformative potential for a
wide range of fields such as finance, supply chain management, and healthcare. The
contribution of this research is an in-depth analysis of blocks, transactions, and
consensus mechanisms constituting the anatomy of a blockchain. We have paid
particular attention to block-structure research in our work, emphasizing that a block is
an indivisible information unit, each containing transactional data and cryptographic
hashes that link it to the previous block. One of the most valuable parts of our research
consists of an innovative analysis of a consensus mechanism. We explain how different
algorithms ensure the validity and sequence of transactions among the network nodes,
and review the strengths and weaknesses of algorithms, namely, Proof of Work (PoW),
Proof of Stake (PoS), and Delegated Proof of Stake (DPoS). The key highlights in this
work are the case studies of well-established blockchain platforms, including Bitcoin
and Ethereum. These manifest our insight into their operational efficiencies and
mechanisms for security. Further, we demonstrate empirical results on the processing
times for transactions and scalabilities of blockchains under different network
conditions. Additionally, the challenges of scalability and energy consumption are put
forth, for which novel approaches may be proposed for future blockchain development.
The study contributes to the further development of blockchain technology by
informing future research directions toward solving the existing limitations and
exploring new applications within emergent sectors.
Keywords: Bitcoin, Blockchain, Consensus mechanisms, Decentralization, DeFi, Distributed ledger, Energy consumption, Ethereum, Mining, NFTs, Proof of stake, Proof of work, Smart contracts.
