1. Understand the data structure: Depending on the blockchain network or protocol, blockchains use different data structures. For example, Bitcoin uses data structures like Merkle Trees, while Ethereum uses a combination of trie trees and bloom filters.
2. Analyze transaction data: To interpret blockchain data, you need to look at individual transactions and blocks to understand how money is moving from one account to another and how the data is being stored and secured.
3. Compare hashes: When analyzing the data, it’s important to compare the hashes of different blocks to ensure that the data is valid and consistent. A hash is a cryptographic function that takes an input of arbitrary length and produces an output of fixed length. By comparing the hashes of different blocks, you can ensure that the data within each block has not been tampered with.
4. Understand smart contracts: If the blockchain network you’re analyzing is using smart contracts (or self-executing code), you’ll need to understand how these contracts are working within the system in order to interpret the data properly.
5. Analyze mining data: Most blockchains use a consensus algorithm, such as proof-of-work or proof-of-stake, in order to maintain the security of the network. By analyzing the mining data, you can get a better sense of how the network is functioning and the incentive structures involved.