Data model, transactions, and chain structure

The first two capabilities, data model and transactions, are closely related to each other. This is where the data model describes the type of assets available on the network and its data structure. Transactions trigger actions to modify asset data and transact assets between participants. The data model can be very simple and contain just one asset, such as a cryptocurrency like Bitcoin, or a more complex model with multiple assets that can even have relationships between them. The same applies to the transactions available on the network.

An asset(s) can be created or referenced in a transaction, which in essence transfers the asset(s) between two parties who wish to exchange the data, for example, processing a payment between two parties, placing an order on an online store, registering an automobile, tracking diamonds around the world, or sharing your digital identity. More background will be provided on these two capabilities in Chapter 3, Blockchain 101 - Assets, Transactions, and Hashes.

The chain structure is also related to transaction data. It describes the data structure in which individual transactions are combined into a block and how these blocks are chained to each other. The structure is usually different across blockchain platforms, since it is used to run on a specific platform. When comparing blockchains, you will notice that more advanced platforms have more complex structures; that is, they contain more information. For reference, the minimum size of a block on the Bitcoin blockchain is around 100 bytes, whereas the minimum size of a block on the Ethereum blockchain is around 525 bytes. The chain structure also describes the maximum size of a block, how blocks are chained together, and how incentives are paid out to participants. More information will be provided about this capability in Chapter 4, Blockchain 101 - Blocks, Chains, and Consensus.