Blockchain Fundamentals Part 1

The Three Pillars

Welcome to Blockchain Fundamentals. If you have ever felt confused by terms like "Web3," "Crypto," or "Distributed Ledgers," you are in the right place.

In this tutorial series, we are going to strip away the hype and focus purely on the technology. We won't be discussing price speculation; we are here to understand the architecture that powers the future of the internet.

Today, in Part 1, we start with the foundation. What actually makes a blockchain specialized? It comes down to three core concepts: Immutability, Decentralization, and Transparency.

1. Immutability

The first and perhaps most critical feature of a blockchain is that it is immutable. This is a technical way of saying "unchangeable."

In a standard database (like a bank's server), an administrator can edit, delete, or reverse a transaction. On a blockchain, once a block of data is written and confirmed, it is virtually impossible to alter.

 How it works

Each block contains a unique digital fingerprint called a Hash. It also contains the Hash of the previous block. This creates a chain. If a hacker tries to change a transaction in Block 5, the Hash of Block 5 changes. This breaks the link to Block 6, alerting the entire network that the data is invalid.

 The Analogy:

 Imagine carving a transaction into a stone tablet and then sealing it inside a transparent glass wall. You can see it, everyone else can see it, but you cannot erase or change it without breaking the entire wall.

2. Decentralization

The internet we use today is largely Centralized.

·      Your emails are stored on Google's servers.

·      Your money is stored on a Bank's ledger.

·      Your posts are stored on X's (Twitter's) database.

If those central servers go down, or if the company decides to ban you, you lose access.

Decentralization transfers control from a single entity to a distributed network of users. The database doesn't live in one place; it lives on thousands of computers (Nodes) simultaneously.

Why does this matter?

It removes the "Single Point of Failure." If one computer leaves the network, the blockchain continues running without interruption because every other user has a copy of the data.

Key Takeaway:

In a centralized system, you trust the entity (the bank). In a decentralized system, you trust the code (the protocol).

3. Transparency

A common misconception is that blockchain is "anonymous." In reality, most public blockchains are pseudonymous and completely transparent.

While your identity is hidden behind a wallet address (a string of random characters), your activity is public.

Any person, anywhere in the world, can use a tool called a Block Explorer (like Etherscan or Solscan) to view the entire history of the network. You can see exactly how much money moved, where it went, and when it happened.

This creates a system where trust is built through verification, not secrecy.

The Transaction Lifecycle

In the above section we discussed the three pillars of blockchain: Immutability, Decentralization, and Transparency. We know what the blockchain is, but how does it actually work? When you click "Send" in your wallet, what happens behind the scenes to move digital assets securely across the world without a bank?

Now, we are breaking down the Transaction Process. It typically happens in five distinct stages.

1. The Request

Everything starts with the user. You open your wallet application (like Phantom or MetaMask) and initiate a transfer. You specify the recipient's address and the amount.

However, you don't just "send" the money. You sign the transaction.

Your wallet uses your Private Key to create a digital signature. This proves that you—and only you—authorized this movement of funds, without ever revealing your actual private key to the network.

Key Concept:

Think of this like a wax seal on a letter. The seal proves the letter came from the King, but it doesn't give you the King's ring.

2. Broadcasting

Once signed, your wallet transmits (broadcasts) this data packet to the network.

It does not go directly to the blockchain yet. Instead, it enters a "waiting room" known as the Mempool (Memory Pool). This is where unconfirmed transactions hang out, waiting to be picked up by a node.

Note: If the network is busy, your transaction might sit in the Mempool for a while, unless you pay a higher fee to jump the queue.

3. Validation

This is where the network's security kicks in. Specialized computers on the network, known as Nodes (or Validators/Miners), pick up your transaction from the Mempool.

Before they process it, they must validate it. They run a series of automated checks:

·      Signature Check: Is the cryptographic signature valid?

·      Balance Check: Does the sender actually have the funds they are trying to send?

·      Double-Spend Check: Has this money already been spent elsewhere?

·      If the transaction fails any of these checks, it is rejected immediately.

4. Block Creation

Once validated, your transaction is not written to the ledger individually. That would be inefficient.

Instead, the Validator bundles your transaction together with hundreds or thousands of others into a single data container called a Block.

Each block is given:

·      A Timestamp: When it was created.

·      A Block Header: Summary data.

·      A Reference: A link to the previous block (creating the "chain").

5. Commit

This is the final step. The new block is added to the existing blockchain.

Once the block is added, this update is propagated to every other node in the network. Every node updates their copy of the ledger to reflect that your balance has gone down and the recipient's balance has gone up.

At this point, the transaction is Confirmed. Because of the Immutability rule we learned in this action can now never be reversed.

Conclusion:

To summarize the journey, we have established the rules of the game:

·      Immutability ensures history cannot be rewritten.

·      Decentralization ensures no single person is in charge.

·      Request: You sign a check.

·      Broadcast: You mail the check to the bank.

·      Validation: The bank checks if you have funds.

·      Block Creation: The bank bundles your check with others into a daily report.

·      Commit: The report is filed in the permanent archives.

This is determined by the Consensus Mechanism.

In Next Part, we will dive into the war between Proof of Work (PoW) and Proof of Stake (PoS), Who gets to decide which node creates the block? Who decides which transactions get priority? Until further See you soon.