Blockchain Fundamentals

date

May 4, 2025

slug

Blockchain-Fundamentals

status

Published

🌐 1. What is Blockchain? — Our Digital Record Chain 📖🔗

Once upon a time in the internet world... all the computers sat together with strong filter coffee ☕ and said,

"We need a smart way to write down who gave what to whom!" 💸🍿

And thus, born was... BLOCKCHAIN! 🎉

🧱 What Is This Block-ah?

Think like this: Lot of digital boxes (we call them blocks 📦), all standing in line — like waiting for biryani at a wedding 😄🍽️.

Each box contains:

🧾 A list of what happened (money transfer, smart work, etc.),
🕒 What time it happened (no lying!),
🧠 A secret code (called a hash – not chutney hash 😅),
🔗 And also the code from the previous block, like a best friend chain 💕.

🔐 The Rule You Can’t Break!

Once you put the block into the chain… that’s it, game over 🎮

⛔ Can’t touch it, can’t change it.

It’s more safe than that big pickle jar amma keeps on the top shelf 🔒🥒

🌳 Bonus: Meet the Merkle Tree!

There’s a smart data tree inside this whole thing — it’s called a Merkle tree 🌳.

This tree? Ayyo! So brainy, it can probably fix your WiFi too 🤯📶

(Don’t worry — we’ll introduce you properly later 😄)

🛡️ Why We Care So Much?

Because no one can cheat, edit, or hide anything in this setup 😎

It’s like writing in a super-truth diary — once written, no backspace button 📓🚫

This is why Blockchain is full solid system! Like your auto anna — once he says “100 rupees” means, that's it. No change, no bargain 😂💪

🧱 2. The Tale of the Blockchain Blocks 🧙‍♂️

Once upon a digital time... 🕰️💻

There lived a bunch of blocks — not the building kind, but smart little data boxes 📦💡. These blocks had one job: to keep secrets safe and records clean! 🧼🔐

🧊 Meet the Block:

Each block was like a magic diary entry, and it carried:

🪙 A list of all the money moves (aka transactions),

🕒 A timestamp (to know when the magic happened),

🔐 A special secret code (a hash 🧙‍♂️✨),

🔗 The previous block’s secret code (so they never forget their past),

🎲 And a quirky number called a nonce (basically its ID card with a twist).

The blocks were really good friends — always holding hands 🧤👫 (linked by hashes) so no one could break their chain.

💌 What’s Inside a Transaction?

Now, let’s talk about the gossip inside those blocks — the transactions!

Each transaction was a little message 📩 saying things like:

🤑 “Alice sent 5 coins to Bob.”

🤖 “Deploy this cool smart contract!”

🧙 “Someone just poked the magic contract to do stuff!”

Whatever happened, the transaction would shout:

“Save me in the block forever!” 🔒🧾

🔗 The Magical Chain 🧵

As the story went on, new blocks kept joining the line like a conga party 🕺🕺🕺 — one after another, each holding the hand of the last.

And guess what?

No block could be changed without everyone noticing! 😲🔍

That’s what made the chain super honest — like a group of besties who never lie. 🤝❤️

And that, dear reader, is how the blocks, the transactions, and the chain live happily ever after — safe, linked, and unbreakable. 🏰✨

🔐 3. Cryptography — The Art of Secret Baatein (Talks) 🤫📜

Let’s go back a bit — not to your school days — but all the way to ancient Greece 🇬🇷. The word cryptography comes from two words:

kryptós = hidden 🫣

gráphein = written ✍️

Put them together and boom 💥 — you get "writing that is hidden!" Cool, right?

But wait, don’t worry! You don’t need to become a Greek pandit for this. Let me explain like how your cousin would at a wedding. 😄

💌 Sending Secret Baatein (Messages) Like a Desi James Bond

Imagine this: You want to send a love message to your crush 😍, but you're scared someone (maybe her nosy brother 🕵️‍♂️ or your little sister 📸) might read it on the way.

So, you decide:

"Bro, let’s make a secret code! Only she and I will know it."

That’s cryptography – using clever codes to keep things private between two people, like:

You (Sender) 💌

And your friend (Receiver) 📬

Even if someone in between catches your message...

💥 They’ll be like, “Hey brother, what is written here?!”

🔑 What Does Cryptography Do?

🕶️ Confidentiality – Secret rahega boss, only the right person can read it.

🛡️ Integrity – Message will not be changed. No jhol-jhaal ✋.

🧑‍💻 Authentication – You'll know who really sent it. Not some imposter.

🚫🧢 Non-repudiation – No “Arre bhai, maine toh bheja hi nahi” excuses.

Cryptography is like the Aadhar card of messages – it proves identity, keeps info safe, and can’t be faked. 🔥

💡 How It Works (In Desi Style)

To protect your messages, cryptography uses:

Locks & keys – But digital ones 🗝️🔐

Strong maths – Not 2+2 types, but scary IIT-level ones 😅

Hashing – Like giving your data a special fingerprint. No two are the same! 👆

Merkle tree – A smart tree 🌳 that stores data in a safe way (we’ll explain this tree later — it’s not from Kerala, promise 😄).

🤝 Why It’s So Important in Blockchain?

Blockchain is like a huge digital notebook 📒. But how do we trust that no one is writing fake entries or changing old pages?

Simple — use cryptography:

Every block (page) is locked with secret codes 🔒,

Only people with the right digital key can add entries 🔑,

And once added — no one can erase it, not even Sharma Ji’s son. 🙅‍♂️

This is why cryptography is the heart of blockchain — it keeps the data:

Safe,

Real,

And impossible to cheat. 💯

📘 What’s Coming Next?

Now that you've become a half-crypto expert 🧠, it's time to meet some cool characters:

🔍 Hash Functions – Like giving your message a digital face.

🔑 Crypto Keys – Public & Private, like having a desi locker and a key.

🌳 Merkle Tree – This tree doesn’t give mangoes 🥭, but it gives data security!

🔢 4. Hash Function — The Digital Blender Machine 🍹

Okay okay... listen ah!

In computer world, a function is like a machine 🛠️. You give it something → it does something clever → and it gives you a result. Simple!

🍱 What’s a Hash Function Then?

It’s like a magic blender 🧙‍♂️🥤.

You put anything inside (a message, file, secret recipe... whatever!)

It blends it using a secret formula (math magic),

And gives you a fixed-length output — we call this the hash 😮🔡.

No matter how big or small the input is… the output hash is always same length! Like all idlis are round, no matter who makes them 😄🍽️

[source:https://en.wikipedia.org/wiki/Cryptographic_hash_function]

💡 Special Powers of Hash Function:

🧠 Same input = Same output. Always! Like your mom’s rasam — never changes taste!

🔒 One-way street! You can get hash from input, but you can’t go backward! (Input-from-hash = Mission Impossible 🎬😅)

💥 Tiny change = Big drama! Even 1 letter change → output hash becomes totally different 😵‍💫

🚫 No two things should give same hash. This is called being collision-resistant. Like twins who don’t have same fingerprint! 🧬

⚡ Fast-fast work. Hash functions are super speedu — blink and done! ⚡🐆

🧾 What Do We Call the Output?

That mashed-up digital number we get is called a hash. Some people say:

Hash value

Hash code

Hash digest

Just "hashhh" 😄

🎯 Why Important in Blockchain?

Because blockchain uses this to:

Link blocks together (like a chain 😎)

Check if data got changed (spoiler: if hash changes, something is fishy 🐟)

Keep everything safe, smart, and tamper-proof 🛡️

So next time someone says "hash function," just smile and say,

“Ah yes! That blender machine which makes tamper-proof digital chutney!” 😄🫙

5. Cryptographic Keys 🔑

Imagine sending secret messages like a spy 🕵️‍♂️, but you’ve got a super-secret lock 🔒 and key 🔑 that only you and your friend know how to use!

In cryptography, we don’t need a physical lock. We use keys to lock and unlock our messages! 🔐

There are two types of keys:

Symmetric Key (same key for both lock and unlock)

Asymmetric Key (two keys: one public, one private)

Blockchain uses Asymmetric Keys! 🔥

Public Key and Private Key in Blockchain 🛡️

In public key cryptography, you and your friend can talk to each other secretly and safely. 🤫

The Public Key is like a mailbox 📬 that anyone can use to send you a secret message.

The Private Key is like your special key 🔑 to open the mailbox and read the message. Only you have it!

Example Time! ⏳

Let’s say Alice wants to send you a secret message. 📨

You give Alice your public key (everyone can know it).

Alice uses your public key to lock the message so only you can read it.

Now, only you can unlock it with your private key 🔑.

If anyone else tries to open it, they’ll be like “Oops, I can’t open this! 🤷‍♂️”

Key Takeaways 📝

To get secret messages, you need a public key (everyone can see it) and a private key (only you should know it). 🔐

The sender uses your public key to lock the message.

You use your private key to open it and read it. 🔓

Never share your private key! 😱 Only you should have it!

Also, your private key can be used to sign messages, like putting your unique stamp 🖋️ on it to prove it’s really from you!

6. Merkle Tree 🌳

In cryptography and computer science, a Merkle Tree (or hash tree) is like a tree 🌳, but instead of fruits 🍎, it has transactions and hashes! Every branch and leaf in the tree is connected in a special way to keep things secure. Let’s make it super simple:

Leaf Nodes 🌿: These are the last points in the tree. Imagine them as the base transactions that don’t have any children. They are at the bottom. For example, Tx0, Tx1, etc.

Parent Nodes 🏠: Everything above the leaf nodes are parent nodes. These are like the moms and dads of the tree, and they are connected to their children (the leaves).

Each leaf (like Tx0, Tx1) gets a unique label that is created using something called a cryptographic hash. 🧩 This is like turning the transaction data into a special, unreadable code!

How it works:

Each leaf node (transaction) gets a cryptographic hash – think of it like a barcode for that transaction. 🔒

The parent nodes (above the leaves) are created by combining the hashes of their child nodes, then hashing them again. So each parent node is labeled by the hash of the hashes! 🔑

If something changes anywhere in the tree, the parent and grandparent nodes will change as well! ⚡ Because hash functions are like secret formulas that always change the result if the input changes.

This is super important in blockchains! 🏗️ Why? Because if you change any transaction, all the hashes from that transaction up to the top of the tree will change, and everyone will know something has been altered. 🚨

Why do we use Merkle Trees? 🤔

They help us verify transactions in a block quickly and securely. 🌍

Let’s say you want to check if a transaction is in a block:

You don’t have to check every single transaction! 🙅‍♀️

With Merkle Trees, you can just follow the hashes from the leaf node to the top and see if it matches! 🔍

The Magic of Merkle Trees 🧙‍♂️

According to Andreas M. Antonopoulos in "The Bitcoin Protocol":

Merkle trees act like a summary of all the transactions in a block. 📝

They give us a digital fingerprint 🕵️‍♂️ of everything, making it fast and efficient to check if a transaction is really in the block.

So, Merkle Trees are like the strong backbone 💪 of blockchains, making everything secure and efficient!

🔑 Key Takeaways:

Merkle Trees organize transactions in a tree structure 🌳.

Every transaction has a unique hash 🧩.

Changing any transaction changes all the hashes! 🔄

It makes verifying transactions super fast and secure! 🛡️

Stay hash-safe! 😎

4o mini

Image: [Wikipedia](https://commons.wikimedia.org/wiki/File:Bitcoin_Block_Data.png "Merkle tree), license Creative Commons Attribution-Share-Alike 3.0 Unported

7. Game Theory 🧠🎲

Okay, so Game Theory has nothing to do with your favourite video or board games! 😅 Instead, it’s like a thinking game about how people (or even animals 🦁) make decisions when they have to consider others' decisions. Think of it like a big chess game of life where everyone’s moves affect each other. 🧩

What is Game Theory? 🤔

In Game Theory, you're studying how people (or "agents" 🤖) make choices, knowing that their decisions will impact other people's decisions too. It’s like figuring out how everyone in a group behaves when they all depend on each other.

To put it simply:

Decisions depend on others' decisions: You make your choice, but it’s also shaped by how you think others will act.

It’s all about probabilities – you guess what others might do, and plan accordingly. 🎲

Game Theory can be seen as mathematical models that help predict these types of strategic interactions.

Where is Game Theory used? 🌍

Economics 💰: Helping businesses and governments make decisions based on others' behavior (like pricing strategies, competition, etc.).

Logic 💡: Figuring out the best strategies for solving problems based on different rules and actions.

Computer Science 💻: Helping machines decide the best approach for things like AI or blockchain.

Traditional Game Theory 🎮

In old-school game theory, they mostly looked at two-person games where one player's gain is exactly the loss of the other player. It’s like zero-sum – if one wins, the other loses. 😬

Game Theory in the 21st Century 🧠🚀

But now, game theory is not just for two people. It’s become an umbrella term for any rational decision-making – whether it’s humans, animals, or even computers! 🤯

Game Theory in Blockchain 💥

In Blockchain, game theory is used to make sure everyone (miners, validators, users) acts honestly. You see, blockchain systems are designed to work well because each participant is incentivized to do the right thing. 💸

For example:

If you try to mess with the blockchain, you risk losing your rewards or getting punished (so it’s smarter to play nice). 😇

Game theory helps design these rewards and penalties in a way that keeps everyone honest!

Key Takeaways 🔑

Game Theory studies decision-making between interacting people or systems. 🤝

It helps predict behaviors based on strategies and probabilities.

It’s used in economics, logic, computer science, and blockchain! 💡

In Blockchain, it ensures everyone acts honestly with smart incentives.

So, next time you make a decision, think like a strategist in a game of life! 🎮🧠

8️⃣ Consensus Mechanisms – Everybody Should Agree La! 😎🤝

Okay boss, imagine this — a big gang of people 👨🏾‍💻👩🏻‍💻👩🏽‍💼👨🏼‍💼 sitting around trying to agree on one thing: “What’s the correct data?”. Everyone must say “Yes bro, I agree!” ✅

That’s called a consensus mechanism – a fancy word for a way to make sure everyone agrees without fighting 🙃

And you know what? This idea is built using game theory logic only! 🎲🧠

🧱 Consensus Mechanism in Blockchain: All Nodes, One Truth 😇

In blockchain, every computer in the network (we call them nodes 🖥️) must agree on the same data, same transaction, same result. 💾🔐xxxxxxx

If even one node starts acting like a local rowdy 🤨 and says “I won’t agree”, it can mess up the whole system la! So, we need strong rules to make sure:

Honest nodes can talk

Fake nodes get ignored 😤

Everyone agrees on the final data

This is where consensus mechanisms save the day. 🦸🏾‍♂️✨

🏰 Enter the Byzantine Problem: Too Many Generals, No Plan 😂

This whole thing started with a problem called the Byzantine Generals Problem 🏇🏾

Imagine a bunch of army generals trying to attack a fort 🏯 at the same time — but they can’t trust each other. Some might lie, some messages may not reach properly. Total confusion 🤯

Now bring that to computers… Same problem: Some computers (nodes) might crash 💥, some might cheat 😒, or act like they’re good but secretly plan to spoil the system 😏

So how to make sure they still come to a correct agreement? 🧐

That’s where we need:

👉 BFT – Byzantine Fault Tolerance – superpower to deal with cheaters 😎🔥

If a consensus mechanism is BFT, it can handle even if some nodes are acting like drama artists. 🎭