Functions of the blockchain

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The mini-blockchain scheme was developed by understanding the different purposes of the blockchain and then separating that functionality into individual mechanisms which are each optimized to serve their purpose. The blockchain has 3 main functions. The Bitcoin blockchain combines these functions into one single mechanism and as a result doesn't scale well. It requires nodes to store a lot of data which doesn't necessarily need to be stored for so long. Breaking up the functions of the blockchain is the key.

Functions of the Blockchain:

  1. to coordinate how the network processes transactions
  2. to manage account balances; record the ownership of coins
  3. to encapsulate the proof-of-work which secures the network

The mini-blockchain scheme separates these functions into the 3 core components.