Fundamental Blockchain Concepts
Learn the fundamental concepts that allow all blockchains to function.
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- 1In 2010, a programmer paid 10,000 Bitcoins for 2 pizzas, roughly worth $30. In 2018, that same number of bitcoins is estimated at $83 million in value! The exchange of Bitcoin is possible due to …
- 2The blockchain is similar to a permanent book of records that keeps a log of all transactions that have taken place in chronological order. Let’s envision a bank transaction in which there are thr…
- 3So how do Blockchain-based applications like Bitcoin and Ethereum validate transactions without a central authority? In the blockchain, there are many participants in the network that are constant…
- 4Just like bricks are the building blocks of a house, blocks themselves are the building blocks of a blockchain. A block contains transaction data and other important details related to the creatio…
- 6To recap, a blockchain is similar to a permanent book of records — it keeps an accurate unchanging record of all data, or transactions, stored in chronological order. Each block has a reference to …
- 7Congratulations! You just learned the basics of blockchain technology. Below is a review of important terms that you may want to study to further solidify your knowledge on the blockchain. **Let’s…
- 1The magic of blockchain is that it’s a secure digital ledger that records transactions in chronological order. In this exercise, we’ll explore how blockchain transactions are handled. As transacti…
- 2In this exercise, we’ll explore how blocks are confirmed and added to the blockchain. The first step in adding blocks is verifying transactions. This means making sure that transactions haven’t be…
- 3In the previous lesson, we briefly touched upon the idea of hashing — generating a random string of characters from a given input. Let’s go a step further and explore why hashing is so fundam…
- 4We ended the last exercise on a cryptic note — what if an attacker tampers with a block and then somehow covers their tracks by recalculating the hash of each subsequent block to make the blo…
- 5Believe it or not, the security measures introduced in the previous exercises are not enough to secure the entirety of the blockchain. There needs to be another layer of security to protect the blo…
- 6Since participants on the blockchain network are anonymous users on their computers, we can’t trust them to verify transactions honestly. Proof-of-Work does nothing more than introduce an additiona…
- 7The blockchain participants always consider the longest chain to be the correct one. If someone is able to create the longest chain of blocks (even if the blocks are fake), the network is forced to…
- 8Congratulations! You learned about how transactions work in the blockchain and some of the mechanisms that keep a blockchain valid and secure. Let’s review the key terms: * Transaction: An exc…
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Fundamental Blockchain Concepts
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