Who validates the transactions on the blockchain? Guide 2025

Have you heard that there is no need for the bank but who validates the transactions on the blockchain if it is not a company or an intermediary? I mean, how can we be sure that Bitcoin transactions are safe? In the next article I will explain who validates the transactions on blockchain and why it is a revolutionary technology.

1. Who validates the transactions on the blockchain

Blockchain is a decentralized technology that works as a distributed digital register. Unlike traditional banking systems, where a central entity (bank) checks and approves transactions, blockchain uses a consensus mechanism. If you want to buy or sell Bitcoin, Ethereum or other cryptocurrencies, then the best place is the Abarai platform . You can call, and a specialist will help you trading.

The steps that a transaction travels until it is validated on blockchain:

1. Initiation of the transaction - when someone sends bitcoin or another cryptocurrency, the transaction is transmitted to the network.
2. Verification of the transaction - the network analyzes whether the transaction is valid, checking the digital signature and the sender's balance.
3. Adding to a block -the transaction is included in a new data block, along with other recent transactions.
4. Confirmation and validation - depending on the mechanism of consensus used (proof of work or proof of stake), the transaction is verified by miners or validators.
5. Adding to blockchain - once confirmed, the new block is added to the block chain, and the transaction becomes permanent and irreversible.

This process guarantees that no entity can falsify transactions, and all transfers are transparent and safe. Below is an explanatory video that explains exactly how a Bitcoin transaction is confirmed.

2. Miners and validators - who are they and what role do they play?

Depending on the type of blockchain and the mechanism of consensus used, the validation of transactions is performed by two main categories of participants:

a) Miners ( Proof of Work - Pow)

The miners are the ones who secure the Proof of Work (eg Bitcoin ) networks. They use the computational power of their equipment to solve complex mathematical problems. The first miner to find the correct solution adds the block to the blockchain and is rewarded with cryptocurrencies. This system ensures the security and decentralization of the network, but consumes large amounts of energy.

b) Validators (Proof of Stake - POS)

In networks that use Proof of Stake (eg Ethereum , Cardano , Solana ), validation of transactions no longer requires high computational power. In contrast, participants ("validators") must block a certain amount of cryptocurrencies as a guarantee ("stake"). The larger a validator has a bigger "stake", the greater the chances of confirming a new block.

POS blockchain more ecologically efficient.

Both miners and validators play an essential role in securing and operating the blockchain network. Without them, transactions could not be confirmed and registered correctly.

3. Proof of Work Vs. Proof of Stake - How are transactions validated?

In the Universe of Blockchain, there are two major transactions validation mechanisms: proof of work (POW) and Proof of Stake (POS) . These methods determine who has the right to add new blocks to the blockchain and secure the network. Let's see how each one works and what are their advantages and disadvantages.

Proof of Work (POW) - Security based on calculation power

Proof of Work is the mechanism used by bitcoin and other early blockchains. It assumes that miners from all over the world compete to solve complex mathematical problems, using the processing power of their computers. The first miner to solve the problem adds a new block to the blockchain and receives a cryptocurrency reward.

How does Proof of Work work?

1. A transaction is transmitted on the network.
2. The miners take over the transactions and try to solve a cryptographic puzzle.
3. The first to find the solution sends it to the rest of the network.
4. If most nodes accept the solution, the block is added to the blockchain.
5. The winning miner receives a reward in cryptocurrencies (eg Bitcoin).

✅ advantages proof of work

Very safe - POW networks are extremely safe due to the high calculation power needed to compromise the system. Decentralized - anyone can become a miner and participate in the network security. Attack resistant - a 51% attack requires huge resources, which makes large networks (eg bitcoin) almost impossible to compromise.

❌ Disadvantages Proof of Work

High energy consumption - mining requires a lot of electricity, which raises ecological problems. Longer transaction time - confirmation of a transaction can take several minutes. Requires expensive equipment - miners must invest in strong hardware to compete.

Examples of cryptocurrencies that use POW: Bitcoin (BTC), Litecoin (LTC), Dogecoin (Doge).

Proof of Stake (POS) - validation based on the holding of coins

Proof of Stake was created as a more energy efficient alternative to POW. Instead of solving complex mathematical problems, validators (the equivalent of the miners in the SOP) are selected to check the transactions according to the number of coins they own and put in staking.

How does Proof of Stake work?

1. Users "block" a certain amount of cryptocurrencies in a staking wallet.
2. The network selects a validator from those who have cryptocurrencies in staking, depending on the amount of coins and the time of their own.
3. The validator checks and adds transactions to a new block.
4. If transactions are confirmed by the rest of the network, the validator receives a reward.

✅ Advantages proof of stake

Low energy consumption - does not require specialized hardware and does not consume excessive electricity. Faster transactions - the blocks are validated faster than in the POW. Higher accessibility - anyone can participate in validation without investing in expensive equipment.

❌ Disadvantages Proof of Stake

It can favor "the richest" - more coins validators have higher chances to be selected for validation. Centralization risks - if a small number of participants hold most of the coins, they can control validation. Lower security than POW - although more efficient, POS is not as tested in time as POW.

Examples of cryptocurrencies that use POS: Ethereum (ETH), Cardano (ADA), Solana (Sol), Polkadot (DOT).

🔎 Pow vs. POS - which one is better?

Both Proof of Work and Proof of Stake are effective methods of validating blockchain transactions. Pow is safer, but it consumes a lot of resources, while POS is more energy efficient and allows faster transactions.

4. What does decentralization mean and why is it important?

One of the most important concepts in the blockchain is decentralization . Unlike traditional systems where transactions are checked by banks or centralized institutions, the blockchain works in a network distributed by computers, without a unique control point.

Why is decentralization so important?

✅ without central authorities - there is no single administrator who has the power to block or modify transactions. Anyone can check and participate in the network.

✅ Less censorship - because it does not depend on a centralized entity, no one can stop transactions as long as they follow the rules of the blockchain protocol.

✅ Safety and confidence -each transaction is validated by several participants and stored in an immutable register, which reduces the risk of fraud.

✅ Attack resistance -unlike a centralized banking system, where a cyber attack can compromise the entire system, the blockchain is much harder to attack, because the data is distributed throughout the network.

For example, if a bank undergoes a computer attack, all customer funds could be affected. On blockchain, to compromise a transaction, an attacker should control over 50% of the total power of the network - a scenario almost impossible on large networks such as Bitcoin.

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5. How can the compromised transactions be? Risks and solutions

Although blockchain is considered a safe system, there are some risks that users need to be aware:

a) 51% attack

This type of attack occurs when a single group or entity manages to control more than 50% of the calculation power of a Blockchain network based on proof of work (POW). If such an attack succeeded, the attacker could double the expenses, rejecting legitimate transactions and allowing the system fraud.

Solution: Large blockchain, such as Bitcoin and Ethereum, have a huge calculation power, which makes an extremely expensive and almost impossible attack.

b) errors of intelligent contracts

In blockchain that allow smart contracts (eg Ethereum, Solana, Cardano), programming errors can lead to financial losses. Hackers can exploit these vulnerabilities and steal funds from poorly secure contracts.

Solution: Security audits for smart contracts and the use of verified platforms reduce risks.

c) Phishing attacks and theft of private keys

Many users lose funds because of phishing attacks or private key theft. Attacrators send fraudulent emails or messages that seem to be from legitimate services to convince users to disclose their access data.

Solution: Never enter your recovery phrase or private key on unknown sites and use two factors (2Fa) for your accounts.

d) exploitation of network vulnerabilities

Lower or newer blockchains may have security problems or a small number of validators, which makes them vulnerable to attacks.

Solution: Use dedicated blockchains for major transactions and be cautious with new Crypto projects.

6.

✔ The best place in Romania where you can trade cryptocurrency is the Abarai platform.

✔ The blockchain does not need banks or intermediaries , because the validation of transactions is performed by network users.

✔ There are two main validation mechanisms : Proof of Work (POW) and Proof of Stake (POS) , each having advantages and disadvantages.

✔ Miners and validators are responsible for securing the network , checking the transactions and adding new blocks to the chain.

✔ 51% attacks are almost impossible to achieve in large networks such as Bitcoin, because it requires a majority control of calculation power or cryptocurrencies.

✔ Proof of Work (POW) requires a lot of energy and calculation power, being used by Bitcoin, while Proof of Stake (POS) is more efficient energy and is used by Ethereum and other modern blockchains.

✔ Decentralized validation makes blockchain a safe technology , eliminating the risk of fraud and censorship.