Blockchain basics

Different between web1,2,3

Web 1 is a read only format more like a magazine Web 2 is the second generation and it’s communicate with server, edit web pages and interacts. It’s a read and write format. E.g social media. Web 3 is an integration of web 2 that solves some problems web 2 faces. Anything that increases web 2 efficiency is web3 and web3 is an approach to decentralizing the internet using peer-to-peer protocols to create a decentralized open network.

Blockchain and it’s properties We have

1. Hashing and pre image resistance: hashing is basically taking huge amount of data and compress it into a fixed size of 256bits and 64alphanumerals.
2. Double spending: Bitcoin solves the problem of double spending.
3. Turning complete: no matter how much problem the system is given, it will definitely solve it
4. Cytographic keys : private and public keys
5. Deterministic: Ethereum and BTC are deterministic, always produce the same output which equals Accuracy.
6. Distributed System: a system exist in multiple location. And Transaction is the smallest unit of Blockchain, if transaction doesn’t happen, nothing happens Transaction =Block=Chain of Blocks=state.

Consensus mechanism

Consensus mechanism is an agreement of how blockchain is set to work. And we’ve two types of consensus mechanisms

1. Proof of work and
2. Proof of stake.

Proof of work: Proof of work involves a number of computational processes called mining, where miners find nonce. Mining is done by miners to validate a transaction on the Blockchain. In the cause of mining,proof of work offers low resistance to Sybil attacks. Sybil attack is when someone pretend to be many people so as to verify as many transaction as possible and Proof is work is Sybil attack defense/ 51% attacks.

Proof of stake: Proof of stake offers high resistance to Sybil attacks. Proof of stake doesn't involve computational processes, instead it offers a collateral or staking.

Difference between Bitcoin and Ethereum

Bitcoin is the most popular blockchain since 2009 founded by Satoshi Nakamoto . It is decentralized There is peer to peer transactions

Ethereum is the second most popular since 2015 founded by Buterin.

Etherum is special because it uses smart contracts.

HOW BLOCKCHAIN TRANSACTION WORKS.

Blockchain transactions are cryptographically signed instructions from accounts. An account initiates a transaction to update the state of the blockchain network. A transaction has recipient, signature, value, data, gas limit, maxpriorityfeepergas, maxfeepergas.

GAS refers to the transaction fee paid to the miners (i.e people that validate transactions). Gas is native to the ethereum. It cannot be transferred among users. It has to be purchased using ether and is measured in gwei.

TRANSACTION FEES are calculated based on the amount of transactions a person carries out. These transaction fees (GAS)were created to combat Denial Of Service Attack (DOS) . Which simply means denying people service to the network. Ethereum is able to compute anything no matter how long it takes. If a transaction that is universally non computable is inputted, it will still try to solve it and it may use all the resources and take a lot of time, denying every other person access to the resources. But since there's a charge for every transaction, the Blockchain will automatically stop computing once a user can no longer pay for the transaction.

Then, I also learnt and enjoyed about wallets, Smart contracts and the difference between the traditional Finance TradFi and decentralized Finance Defi .