Blockchain Fundamentals

Master the building blocks of decentralized technology

What is a Blockchain?

A blockchain is a distributed digital ledger that records transactions across multiple computers in a way that makes them extremely difficult to change, hack, or cheat. Think of it as a chain of digital blocks, where each block contains a cryptographically secure record of transactions.

Unlike traditional databases controlled by a single entity, blockchains are decentralized - meaning no single person or organization has control over the entire network. This creates a system where trust is built into the technology itself, rather than relying on intermediaries.

Block 1

Hash: 0x1a2b3c...

Previous: Genesis

Data: Alice → Bob: 5 ETH

→

Block 2

Hash: 0x4d5e6f...

Previous: 0x1a2b3c...

Data: Bob → Carol: 2 ETH

→

Block 3

Hash: 0x7g8h9i...

Previous: 0x4d5e6f...

Data: Carol → Dave: 1 ETH

Key Properties of Blockchain

Immutability: Once data is recorded in a block and added to the chain, it becomes extremely difficult to alter or delete. This is because changing one block would require changing all subsequent blocks, which would require enormous computational power.

Consensus Mechanisms

Proof of Work

Miners compete to solve complex puzzles

Proof of Stake

Validators are chosen based on their stake

Consensus Mechanisms

For a decentralized network to function, all participants must agree on the current state of the ledger. This agreement is achieved through consensus mechanisms.

Proof of Work (PoW): Used by Bitcoin, miners compete to solve computational puzzles. The first to solve it gets to add the next block and receive a reward. This requires significant energy but provides strong security.

Proof of Stake (PoS): Used by Ethereum 2.0, validators are chosen to create new blocks based on the amount of cryptocurrency they "stake" or lock up as collateral. This is more energy-efficient than PoW.

Mining and Validation Process

Transactions are broadcast to the network and collected in a mempool
Miners/validators select transactions and bundle them into a block
The block is validated against network rules (sufficient funds, valid signatures, etc.)
Once validated, the block is added to the blockchain and distributed across the network
The miner/validator receives a reward for their work

Smart Contracts

Smart contracts are self-executing contracts with the terms directly written into code. They automatically execute when predetermined conditions are met, without the need for intermediaries.

Think of a smart contract like a vending machine: you insert coins (meet the conditions), select your item (trigger the contract), and the machine automatically dispenses your product (executes the contract terms).

Smart contracts enable complex decentralized applications (DApps) including decentralized exchanges, lending protocols, and governance systems.

Simple Smart Contract Example

contract SimpleVoting {
    mapping(address => bool) public hasVoted;
    mapping(string => uint) public votes;
    
    function vote(string memory candidate) public {
        require(!hasVoted[msg.sender], "Already voted");
        hasVoted[msg.sender] = true;
        votes[candidate]++;
    }
}

Why Blockchain Matters

Blockchain technology enables trustless systems - you don't need to trust other participants because the protocol enforces honest behavior. This opens up possibilities for global, permissionless financial systems, transparent governance, and digital ownership without central authorities.

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