Welcome to Web3Logic course on Blockchain technology! This comprehensive course is designed to help you master the fundamental concepts, practical applications, and real-world implications of blockchain. It will Help you pass the interview related Questions to blockChain.
Web 1.0 (The Static Web):
- In Web 1.0, the internet mainly featured static web pages with minimal user interaction.
- Information was provided by a single source, and users had no involvement in content creation or interaction.
- It was a centralized system where one entity controlled the content, and users relied on this entity for information.
Web 2.0 (The Social Web):
- Web 2.0 introduced dynamic, interactive websites where users could engage through comments, sharing, and content creation.
- Social media platforms emerged, fostering user-generated content and collaboration.
- While it enhanced user interaction, it remained centralized, with control held by organizations or individuals.
Web3.0 (The Decentralized Web):
- Web3.0 strives for decentralization by leveraging technologies like blockchain and peer-to-peer networks.
- It emphasizes trustless systems through smart contracts, reducing the need for intermediaries.
- Users gain control of their data and assets in a system that lacks a central authority, ensuring transparency and security. No single entity has exclusive control; everything is trustless and secure.
In essence, Web 1.0 was static and one-way, Web 2.0 added user interaction within a centralized framework, and Web3.0 is pioneering a decentralized, trustless system where users have full control over their data and assets, with no central authority dictating the rules.
Blockchain technology began with the release of Bitcoin's white paper by Satoshi Nakamoto in 2008, outlining a decentralized, cryptographic, peer-to-peer transaction system. This marked the origin of blockchain technology. Bitcoin was the first Protocol to use Blockchain Technology.Some people Saw this and thought that we can do more using this technology,So Vitalik Buterin introduced Ethereum in 2015, building on blockchain technology. Ethereum allowed for decentralized applications, organizations, smart contracts, and agreements without intermediaries. This idea, incorporating smart contracts, originated from Nick Szabo's 1994 concept.So After launch of Etherum Blckchian SkyRoketed as Ethereum played a significant role in the proliferation and popularization of blockchain technology, especially in the context of smart contracts and decentralized applications (DApps)
Before we dive into the nitty-gritty details, let's start with a high-level overview of how blockchain works. This will give you a foundation to understand the finer points. Once we have that covered, we'll go deeper into each component step by step.
Basically Blockchain Stores Data in form of Transactions, Lets see How a trnsaction works:
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Initiating a Transaction:
- The process begins when a user, let's say User A, initiates a transaction. This transaction could involve sending cryptocurrency, recording data, or executing a smart contract.
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Unconfirmed Transaction Pool:
- User A's transaction is initially placed in a pool known as the "unconfirmed transaction pool." This pool holds pending transactions that are waiting to be included in a block.
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Mining:
- Miners are responsible for creating new blocks on the blockchain. They gather transactions from the unconfirmed pool and package them into a block. To do this, miners compete to solve a complex mathematical puzzle, known as the Proof of Work (PoW) or Proof of Stake (PoS), depending on the blockchain's consensus mechanism. The first miner to solve the puzzle gets the right to create a new block.
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Adding to the Block:
- Once a miner successfully mines a block, they include User A's transaction along with others from the unconfirmed pool. This creates a new block that now contains a set of transactions.
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Validation:
- Before this new block is added to the blockchain, it needs to be validated. Validators, or nodes in the network, check the transactions within the block to ensure they are legitimate and follow the rules of the blockchain protocol. This validation step helps maintain the integrity of the blockchain.
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Consensus:
- Validators in the network collectively agree on whether the new block should be added to the blockchain. This agreement is reached through the consensus mechanism of the specific blockchain, such as PoW or PoS. If the majority of validators agree, the block is added.
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Blockchain Update:
- Once a consensus is reached, the new block is added to the blockchain, and User A's transaction is now confirmed and becomes a permanent part of the blockchain's history.
So, the process involves users initiating transactions, miners creating blocks that include these transactions, validators checking the validity of these blocks, and a consensus mechanism to ensure agreement before a new block is added to the blockchain. This process helps maintain the security and integrity of the blockchain ledger.
Do visit link! to see practical demo of blockchain Working!
Lets first Understand a few important concepts :
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cryptography in blockchain is the use of mathematical techniques to secure and verify transactions, protect data, and maintain the integrity of the blockchain. It involves encryption, digital signatures, and hash functions to ensure that data is confidential, authentic, and tamper-proof. This is crucial for the security and trustworthiness of the blockchain network.
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- SHA-256 is a one-way mathematical function that takes an input and produces a fixed-length OutPut, which is typically 64 hexadecimal digits or 256 bits. it is ireversible
- Same input will always give same outPut but small change in the input data results in a significantly different hash value.
- SHA-256 is used to create a unique "fingerprint" (hash) for each block. This hash is generated based on the block's data and the previous block's hash. Any change in the block's data would alter its SHA-256 hash, making it easy to detect tampering or fraud.
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These are records of actions or data that users want to add to the blockchain. For example, a transaction might involve transferring digital coins from one user to another.
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A block is like a container or package that stores a collection transactions. In a blockchain, these blocks are linked together in a chronological sequence to form a "chain."
- Each Block consist of a Block-Number, Nounce, Transaction Hash and Previous Block Hash
- Block Numbere is just the number of blocks a blockhcian Have
- A "block nonce" is a number used in the mining process of Proof of Work (PoW) blockchains. Miners attempt to find a valid block nonce that, when combined with other block data, results in a hash that meets specific criteria. Example criteria could be (block trx hash should be started with 2 zeros)
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An Ethereum address is a 40-character hexadecimal string that uniquely identifies a user account on the Ethereum network. It's used for sending and receiving Ether and tokens, interacting with decentralized applications, and executing smart contract functions. Addresses are derived from public keys and are permanent and immutable once created. They are represented in a human-readable format with a checksum for accuracy.
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A "wallet" in the context of cryptocurrencies like Bitcoin and Ethereum is a digital tool or application that allows users to store, manage, and interact with their
cryptocurrency holdings. Here's a brief overview: - wallet stores a user's public and private keys. - Public keys are used to receive funds, while - private keys are used to access and spend those funds - Wallets are designed with various security features to protect the user's private keys, ensuring that only the owner can access their cryptocurrency.
- Types:-**Hot Wallets** : These are online wallets connected to the internet and are convenient for frequent transactions but may be less secure. - **Cold Wallets**: These are offline wallets, like hardware or paper wallets, which offer enhanced security but are less convenient for quick transactions. - **Mobile Wallets**: Wallet applications designed for smartphones, providing easy access and convenience. - **Desktop Wallets**: Wallet software installed on a computer, offering more control and security compared to mobile wallets. - **Web Wallets**: Online wallets accessible via a web browser, convenient for accessibility but potentially less secure.
let's walk through an example of how a transaction is added to the Ethereum blockchain:
1.User A's Transaction Request: - Imagine User A wants to send 1 Ether to User B. User A uses their Ethereum wallet and initiates a transaction. 2. Creating the Transaction: - User A's Ethereum wallet software creates a transaction with specific details: - Sender's address (User A's wallet address). - Recipient's address (User B's wallet address). - The amount to be transferred (1 Ether). - The transaction nonce (a unique number for User A). - Gas limit (the maximum computational work that can be done for this transaction). - Gas price (the price User A is willing to pay for computational work). 3. Broadcasting the Transaction: - User A's wallet broadcasts the transaction to the Ethereum network, and it enters the pool of unconfirmed transactions. 4. Miner Inclusion: - Ethereum miners, who compete to solve complex mathematical puzzles (Proof of Work), select transactions from the pool to include in the next block. - Miners prioritize transactions based on the gas price offered (higher gas price transactions are typically processed first).
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Block Creation:
- A miner successfully mines a new block. This block contains a set of transactions, including User A's transaction.
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Validating the Block:
- The newly mined block, including User A's transaction, is broadcast to the network.
- All Ethereum nodes (validators) validate the transactions within the block to ensure they are legitimate and follow the rules of the Ethereum protocol.
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Consensus Mechanism:
- Ethereum nodes reach consensus to agree that the block is valid. The consensus mechanism in Ethereum (before transitioning to Ethereum 2.0's Proof of Stake) is Proof of Work.
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Adding to the Blockchain:
- Once consensus is reached, the new block is added to the Ethereum blockchain. User A's transaction is now confirmed and becomes a permanent part of the blockchain.
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Balance Update:
- User B's Ethereum wallet balance is updated to reflect the receipt of 1 Ether.
This example demonstrates how a transaction from User A is initiated, processed, and added to the Ethereum blockchain. It involves the creation of a transaction, miner selection, validation, consensus, and ultimately, the addition of the transaction to the blockchain. Once confirmed, the transaction cannot be altered, and User B's balance is updated accordingly.