Thread by @AmitejRana

GM!🚀 Web 3 frens 🧠
Presenting you an amazing 🧵on:

𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧 𝟏𝟎𝟏⛓️

Which made possible by @0xTPH Web3 session hosted by @aayushmittal13  & @MotwaniSuhas; led by OP speaker @crosschainyoda who is the CEO at @PillowFund

Hope you like it & provide feedback LFG!🚀

Let's first understand the History of Blockchain Ik Ik history is boooring... but I will try to sum it up in short

These two CS applied cryptographic techniques in a chain of blocks, built 1st prototype of blockchain in the early 90s to secure digital docs from tampering.

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Satoshi Nakamoto, a pseudonym (some anonymous person or a group) published $Bitcoin whitepaper on 10/31/2008.

Showcasing the 1st ever application of Blockchain (DLT) by creating a peer-to-peer electronic cash system i.e. $Bitcoin, although the technology is older than $BTC.

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Here is a link to the whitepaper(bitcoin.org/en/bitcoin-pap…)

Now let's understand the basics of Blockchain:

What is blockchain?:
Break word in 2 and you get 'block' & 'chain'. So it's a chain of blocks linked & organized in chronological order; secured by cryptographic proofs.

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Let's dive deeper & understand in a more technical way (d/w it's super easy):

A blockchain is a digital ever-growing list of data records (a bunch of data - doc, transaction, NFT, etc)

A blockchain is designed to be highly resistant to modification & fraud (double-spending)

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Distributed Ledger Technology(DLT):
Blockchain is a type of DLT where transactions are recorded with immutable cryptographic signature called hash.

What is Hash?:
The data stored in a blockchain converts into a 64 unique character (hash) protected by standard encryption.

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What is standard encryption?: first, let's understand SHA256.

SHA256 stands for Secure Hash Algorithm 256-bit and it's used for cryptographic security. Cryptographic hash algorithms produce irreversible and unique hashes.

Play it around -
(codebeautify.org/sha256-hash-ge…)

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Few more terms b4 we explore blockchain -

Nodes: Fancy word for computers who do computing work in order to validate the data stored in a block.

Peer: Node or a person

Consensus mechanism: It is a fault-tolerant mechanism used to reach an agreement among distributed nodes.

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Coinbase transaction: The very first transaction of any blockchain where initial tokens are minted out of thin air and given to someone randomly. (don't confuse the term with @coinbase, they have just used it for naming)

Nonce: an arbitrary number (Just ignore it)

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Now let's play & learn, Click on the link
(andersbrownworth.com/blockchain/)

Game1: Go to the Hash tab and type your name what do you observe

You have seen changes in the hash, Voila that's how hash works. It turns into some unique characters powered by the cryptographic algorithm.

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Game2: Go to the Block tab, type in your name again and click on Mine and observe the change.

You have observed prior to clicking Mine, the hash was different and now it starts with four '0'.

What happened exactly?
Let's understand a few more terms before playing next game.

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Mine/Mining: New blocks are added to the blockchain by nodes after doing some computation work is called Mining.

Hashing algorithm: Every blockchain has its own hashing algorithm to reach consensus. In this game block starting with four '0' is considered a valid block.

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So in Game2 when you clicked Mine, Node was doing computing work(guessing) to reach a hash that starts with four '0'.

Let's get back to our game:

Game3: Go to the Blockchain tab, where you see the chain of blocks linked with another chronologically.
(cont...)

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Now type in your name in 3rd block what do you observe?

All the blocks post 3rd(including it) turned 'red', why? bcz of change in hash and if you click on Mine to make it green then you have to perform for every next block

That's a lot of computation work, isn't it?

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And if you remove your name and click on Mine all blocks will turn green,

That's how immutable blockchain is. Once the block is mined, it can't be changed or modified, resistant to modification & fraud.

Now tell your friends and family about the wonders of blockchain.

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Game4: Now go to the Distributed tab and assume that you & friends are participating in this game and everyone has the same copy of the blockchain data.

You being Peer B and added some data(your name) on your block 3 and click on Mine for every block, What do you observe?

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Even though you have made all of your blocks green still you have observed that there is a mismatch in hash between yours and Peer A & C.

That's how DLT works! You cannot cheat Peer A & C caught you.

In real life, there are many nodes that are running and validating blocks.

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That's how secure a blockchain is

Now, explore token and coinbase tab by yourself and drop questions if you have any.

Every blockchain has its own Hashing algorithm, Mining algorithm, a different way of arriving at a consensus

Let's talk about two prime consensus mechanism

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Nodes do mining in return for reward which is called a Mining reward.

Proof of work: (Analogy) There is a 100m race and whoever comes first gets the reward rest gets ZERO.

In PoW, instead of 100m race, there is a cryptographic puzzle to secure the next block in the network

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The node that solves the puzzle first gets the mining reward thereby led people to build giant mining farms to get more mining rewards.

Miners combine their hash powers together to build mining pools

However, It's arguable that PoW is more decentralized compared to others.

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Proof of Stake: (Analogy) Imagine the same race, where instead of wasting everyone's energy, all elects one person for the race.

That's how PoS works, where people pool funds together for staking and whoever has the maximum gets to validate a block and earn a reward.

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One node (validator) in the blockchain is chosen to validate & mint the next block.

Stake is created by depositing crypto as a security deposit.

Slashing: if a node is found to be validating fraudulent transactions, its stake is slashed

PoS also called a capitalist economy

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Crypto wallet:
Please check out my thread on it.

However, I missed one important thing to mention which is:

Your Crypto is never stored in your wallet it always stays on the blockchain. Your wallet's job is to store your public and private key only.

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https://twitter.com/AmitejRana/status/1500542192418717696?s=20&t=KyR9QQ2eiA2Pce7JoDwUyA

What's Bitcoin $BTC ?:

It's a native currency of the Bitcoin network.

Bitcoin network is a DLT that operates on PoW consensus, can be used as a medium of exchange on the network by transferring it from one wallet to another, thereby enabling permission-less transactions.

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What is Ethereum $ETH ?:
Ethereum is a decentralized world compute platform (programmable money). it uses thousands of computers around the world to perform operations

$ETH is the native crypto of the Ethereum network.

Smart contracts are deployed upon this network

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ERC 20 token:

ERC 20 (Technical standard) is used to issue and implement tokens on the Ethereum blockchain. Tokens implemented using ERC 20 makes it easier to interact with other tokens, applications, and platforms on the ETH network.

Eg: Wrapped ETH $WETH, $Matic, $Mana

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Voila! Now you are a blockchain expert😎 with a few more added terms and jargon.

Ik it was a lot of information but you have made it through my dear web3 fren! So as I say...

Take a deep breath 🫁 & clap 👏 for yourself bcoz

WAGMI! my dear Web3 fren🚀

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