What Is Block Time in Crypto?

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Contributor, Benzinga
January 20, 2022

A common criticism of several blockchains is their poor scalability. Well-known, well-established, and often older blockchains such as Bitcoin and Ethereum can be expensive and slow to use. This article covers what a blockchain’s block time is and how it impacts the scalability of a blockchain. 

What Is Blockchain?

A blockchain is a distributed database that is shared among the nodes of a computer network. This database records all the transactions that occur on this network. An important distinction between a typical centralized database and a blockchain is the way that the data is structured. 

Some of the most popular databases in the world today are relational databases. A relational database is a collection of data items with pre-defined relationships between them. These data items are organized into tables made up of columns and rows. On the other hand, a blockchain collects information together in chunks known as blocks. 

Blocks are a collection of data that has been grouped together. Often in a blockchain, this data will be a list of transactions. These blocks also contain the hash of the data in the previous block along with the data these blocks contain. Therefore, a blockchain’s structure is similar to a singly linked list, with a block containing the hash of the previous block rather than a pointer to the previous block. The hash function ensures that the blockchain remains immutable because any changes to previous blocks will be evident by a change in the block’s hash. 

Another key difference between blockchains and other types of databases is decentralization. In a blockchain database, no centralized authority has the power to make changes to the database or to add data to the database. Instead, consensus protocols are used to get the various nodes of a blockchain to agree on the correct state of the blockchain in a peer-to-peer manner. 

What Is Block Time?

Blocks in a blockchain have certain storage capacities in terms of the amount of data a single block may store. As mentioned above, the data that is stored in blockchain blocks are often a list of transactions. When a block reaches its capacity, it is closed and linked to the previous block. All of the data that arrives after this block is added is compiled into a new block. This block will also be added and linked to the blockchain once it reaches its capacity. 

Block time refers to the time it takes for a blockchain to create a new block. It is the time interval between the creation of each new block in a blockchain. The block time of a blockchain is determined by a number of different factors.

These factors for proof-of-work blockchains can include the likes of the complexity of the hash being solved and the available computing power or hash rate.  The block time for Bitcoin is currently around 10 minutes, while the block time for Ethereum is currently 10 to 15 seconds. The protocols behind these blockchains will adjust the mining difficulty periodically to ensure that the average block time for the blockchain remains the same. 

The Block Size Dilemma 

The block size is what determines the quantity of data that can be stored within each block. Therefore, if a blockchain were to increase its block size, the blockchain will be able to increase the number of transactions per second that it may process. 

However, many negatives accompany increasing the block size. Larger blocks will grow the blockchain faster and make full nodes more expensive to operate. Full nodes are nodes that store the entire blockchain data on a hard drive rather than a simplified shorter version. As the blockchain grows faster, an increase in the data that must be stored by full nodes goes along with it. 

This change will increase the data storage costs of full nodes. Rising costs may cause more centralization, as it could both dissuade users to operate full nodes or cause users who operate full nodes to stop doing so. Any decrease in the number of users operating full nodes leads to an increase in centralization for the network.

Alternate Solutions to Increasing Block Size

Several alternatives exist to increasing the block size when it comes to improving the scalability of a blockchain. One alternative is the use of Layer 2 solutions. Layer 2 is a term used to describe a secondary protocol that is built on top of an existing blockchain. 

On this second layer, blockchain transactions and processes can take place independently of the original blockchain and still benefit from the decentralization and security of the original blockchain. 

Examples of Layer 2 solutions include the Bitcoin Lightning Network and the Polygon Network. Another alternative for improving scalability is to decrease the block time. However, decreasing the block time brings many downsides, including limited ability to scale because of the relay time. Relay time is the time needed to broadcast a new block to every node on the blockchain. If the block time falls below the relay time, then a new block will be generated before the old block can be received by all the nodes in the network. 

How Is Block Time Different For Bitcoin, Dogecoin and Ethereum?

Depending on the blockchain network used to secure a cryptocurrency, the block time will differ. The block time for Dogecoin, which is a fork of Litecoin, is every 1 minute, compared to Bitcoin’s 10-minute block time and Ethereum’s block time under 15 seconds. 

Get Started in Cryptocurrency

A good place to buy your first cryptocurrency is from a centralized exchange. These centralized exchanges allow customers to purchase cryptocurrencies with U.S. dollars. Some of the most popular centralized exchanges are Coinbase Global Inc. (NASDAQ: COIN), Gemini and Voyager. These exchanges provide easy-to-understand user interfaces that can be helpful for investors new to the crypto space. Centralized exchanges are also regulated by the U.S. government and follow Know-Your-Customer (KYC) laws. To abide by these regulations, you provide the centralized exchange with personal identification information. Afterwards, you connect your bank account to your exchange. After your account is funded, you can purchase cryptocurrencies available on the exchange. 

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Why Does Block Time in Crypto Matter?

A blockchain’s block time matters because it has an impact on the network's throughput. However, smaller block times are not always better because of the relay time of the network. Furthermore, block times are limited in their ability to help scale blockchains, and alternative updates to other parts of the blockchain protocol such as its consensus mechanism will have a much bigger impact on a network's scalability.

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