TheCardano nodeis the top-level component within the network. Network nodes connect to eachother within the networking layer, which is the driving force for deliveringinformation exchange requirements. This includes new block diffusion andtransaction information for establishing a better data flow. Cardano nodesmaintain connections with peers that have been chosen via a custompeer-selection process. By running a Cardano node, you are participating in andcontributing to the network.
How does it work?
Stake pools use the Cardano node to validatehow the pool interacts with the network and are responsible for transactionprocessing and block production. They act as reliable server nodes that hold andmaintain the combined stake of various stakeholders in a single entity.
Producing a block
The goal of blockchain technology is the production of anindependently-verifiable and cryptographically-linked chain of records (blocks).A network of block producers works to collectively advance the blockchain. Aconsensus protocol providestransparency and decides which candidate blocks should be used to extend thechain.
Submitted valid transactions might be included in any new block. A block iscryptographically signed by its producer and linked to the previous block in thechain. This makes it impossible to delete transactions from a block, alter theorder of the blocks, remove a block from the chain (if it already has a numberof other blocks following it), or insert a new block into the chain withoutalerting all the network participants. This ensures the integrity andtransparency of the blockchain expansion.
Slots and epochs
The Cardano blockchain uses theOuroboros Praos protocol to facilitateconsensus on the chain. Ouroboros Praos divides time into epochs. Each Cardanoepoch consists of a number of slots, where each slot lasts for one second. ACardano epoch currently includes 432,000 slots (5 days). In any slot, zero ormore block-producing nodes might be nominated to be the slot leader. On average,one node is expected to be nominated every 20 seconds, for a total of 21,600nominations per epoch. If randomly elected slot leaders produce blocks, one ofthem will be added to the chain. Other candidate blocks will be discarded.
Slot leader election
The Cardano network consists of a number of stake pools that control theaggregated stake of their owners and other stakeholders, also known asdelegators. Slot leaders are randomly elected from among the stake pools. Themore stake a pool controls, the greater the chance it has of being elected as aslot leader to produce a new block that is accepted into the blockchain. This isthe basic concept ofproof of stake (PoS). Tomaintain a level playing field, and prevent a situation where a small number ofvery large pools control the majority of stake, Cardano has an incentive systemthat discourages delegation to pools that already control a large portion of thetotal stake.
Transaction validation
When validating a transaction, a slot leader needs to ensure that the sender hasincluded enough funds to pay for that transaction and must also ensure thatthe transaction’s parameters are met. Assuming that the transaction meets allthese requirements, the slot leader will record it as a part of a new block,which will then be connected to other blocks in the chain.
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