Blockchain for Beginner Developers

This writeup is for someone who wants to learn the basics and understand the system in simpler terms.

What is Blockchain?

Blockchain is a record or log of all the Transactions that happened on the network. A Transaction is any action or event recorded on the blockchain.

For example, a social media app:

• In current system, a centralized app like Instagram, all your posts and data are stored on Meta’s servers, which control access and rules.
• In a blockchain-based social app, your posts are stored across many nodes — no single company owns or can delete your data, since it’s shared and verified by the network.

What is Block?

A block is a list of transactions(actions). It also has timestamp, hash (block’s unique id) and previous block’s hash.

Block has block size, a limit of how many transactions can be stored. The size is usually decided by the blockchain.

Note: If there aren’t enough transactions to fill a block, a smaller block after a certain time interval can be created.

How the process works?

No one is boss in a blockchain network so computer nodes on the network need to perform consensus and agree on the transactions to be approved. Each blockchain can define their own consensus methods.

Some of them:

1. Proof of Work (PoW): Solve puzzles. Miners are people who solve puzzles and the first to solve it wins the right to add the next block. Example: Bitcoin

2. Proof of Stake (PoS): Lock up/Stake crypto coins. Validators are people who stake. The system randomly picks one validator (like a lottery weighted by stake). Validator proposes a block, others check it. If valid → they get a reward; if they cheat → they lose their stake. Example: Ethereum (now)

3. PBFT (Practical Byzantine Fault Tolerance): Nodes vote on the next block

4. PoA (Proof of Authority): Only trusted validators approve blocks.

5. PoH (Proof of History): adds timestamps for faster validation (used by Solana).

What is a wallet?

A digital wallet that hold cryptocurrencies. It has a public key, private key and an address.

• Address: Address of wallet (like mailbox location or bank account number to receive currency)
• Public Key: Long string code used to create digital signatures - unique id (like name on mailbox)
• Private Key: Key to access the wallet (like key to open mailbox or password for bank account)

What is Smart Contracts?

A block of code that executes a list of actions when a certain transaction is performed.

What is Gas Fees and Transaction costs?

Gas Fees is payment to run smart contracts or process transactions on blockchain.
Transaction costs are the total fees to move money or data, including gas and network charges.

What is Tokens and Cryptocurrency?

Tokens are digital assets built on top of a blockchain (like NFT, game tokens, etc.)

Cryptocurrency is the digital money of a blockchain (also a type of token). Just like real money comes in different forms—dollars, euros, dirhams, etc.; cryptocurrency also exists in many types: Bitcoin, Ethereum, Polkadot (DOT), Solana (SOL), Cardano (ADA), and more.

What is Parachain?

A custom blockchain that runs alongside other blockchains like a branch, connected to a main chain. So, if blockchain network is a tree then the main chain is like a trunk and the parachain are like its branches.

What is Web3?

It is a type of internet network.

The 1990s Web1 was read-only. So, user could only view pages and see information.
The 2000s-now Web2 is read-write. So, user can post, interact, but data is owned by big companies.
The Web3 (blockchain web) is read-write-own. So, user can interact, transact, and truly own their data and assets without relying on a central authority.

Common Questions:

1. Do Miners solve puzzle by hand? No, they use powerful computers to solve the puzzles. So it is expensive for them as well.
2. What if 1 Miner/Validator takes up a lot of computing power or staked coins in PoW/PoS? It is called 51% attack or massive cheating. If that happens, people would lose trust in that blockchain and abandon it. Coin value also plummets. So, cheating is possible but the financial and reputation loss makes it discouraging.
3. How does one connect to blockchain? A node, a wallet or a bridge.
   • Connecting as a node means downloading entire blockchain.
   • Connecting with a wallet allows to make cryptocurrency transactions.
   • Bridge allows apps to connect to the blockchain programmatically.

P.S. - If you have doubts, comment it. Everyone can chip in and come on consensus. That's how we learn blockchain together.