Decoding Blockchain: From Basic Concepts to Technical Implementation

Introduction

Blockchain technology has rapidly gained global recognition for its decentralized, trustless mechanisms, positioning itself as the potential foundation for the next-generation "Internet of Value." This guide provides an introductory exploration of blockchain fundamentals, Ethereum, and smart contract development.

Key Sections

Blockchain Fundamentals
Ethereum Overview
Ethereum Development
a. Building a Test Network
b. Writing Smart Contracts

1. Blockchain Fundamentals

Bitcoin & Blockchain Relationship

Blockchain serves as Bitcoin's underlying technology. Bitcoin operates as:

A cryptocurrency: Decentralized digital currency secured by cryptography.
A protocol: Defines how digital assets transfer via blockchain.
A system: Public ledger and wallet infrastructure.

What Is Blockchain?

A decentralized database maintained collectively by nodes. Key characteristics:

Immutable blocks linked via cryptographic hashes.
Transparent public ledger without central authority.
Example: Bitcoin processes ~7 transactions/second with 1MB block size limits.

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Consensus Mechanisms

Proof of Work (PoW): Used by Bitcoin; energy-intensive but secure.
Proof of Stake (PoS): Faster, less energy-intensive than PoW.
DPoS: Voting-based validation (e.g., 101-node systems).

Blockchain Types

Type	Access	Use Cases
Public	Permissionless	Bitcoin, Ethereum
Private	Restricted	Enterprise databases
Consortium	Member-controlled	Industry collaborations

2. Ethereum: Blockchain 2.0

Ethereum extends blockchain with smart contract functionality:

Decentralized Apps (DApps): Self-executing code (e.g., Slock.it bike rentals).
Ethereum Virtual Machine (EVM): Runtime environment for contracts.

Core Components

Gas: Transaction fee unit (paid in ETH).
Accounts:
- Externally Owned (EOA): User-controlled wallets.
- Contract: Code-managed (e.g., DeFi protocols).

3. Ethereum Development

Building a Testnet

Install Geth: Ethereum CLI client.

git clone https://github.com/ethereum/go-ethereum
make geth

Compile Solidity:
```
solc --optimize --bin MyContract.sol
```

Run Node:

geth --datadir ./mychain init genesis.json

Smart Contract Example

Solidity Code:

contract Multiplier {
  function multiply(uint a) public pure returns(uint) {
    return a * 7;
  }
}

Deployment Steps:

Fund an EOA account.
Deploy via eth.sendTransaction().
Interact using eth.call() (read) or eth.sendTransaction() (write).

FAQ

Q1: Do all nodes execute every transaction?

Yes. Ethereum redundantly processes transactions for security.

Q2: Who uses Ethereum?

Companies like Ant Group, ConsenSys, and decentralized finance (DeFi) platforms.

Q3: How long does Ethereum sync take?

Approximately 10 hours for initial sync, depending on network speed.

Q4: What if a smart contract exceeds block size?

Split functionality across multiple contracts.

Conclusion

Blockchain’s potential spans finance, IoT, and governance. Ethereum’s programmability unlocks innovative DApps, though scalability remains a challenge.

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