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# System prepended metadata

title: Blockchain Fundamentals

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# Blockchain Fundamentals

## 1. What Is Blockchain?

A blockchain is a distributed, immutable ledger that records transactions in a chain of blocks, where each block is linked to the previous one using cryptographic hashes.

## 2. Decentralization

Blockchain networks distribute control across multiple nodes (computers).

Benefits:

- No single point of failure
- Greater resilience and trust
- Users don’t need to trust a central authority

## 3. Blocks & Chains
- Block: Contains a batch of transactions, timestamp, nonce, and the hash of the previous block.

- Chain: Links all blocks together using cryptographic hashes.

This structure makes tampering nearly impossible. Changing one block requires changing every subsequent block across all nodes.

## 4. Cryptography
Blockchain relies heavily on cryptographic techniques like:

Hashing: Converts data to a fixed-length string (e.g., SHA-256).

Public-key cryptography: Every user has a public/private key pair for signing transactions securely.

This ensures:
- Data integrity (hashing)
- User identity & ownership (digital signatures)


##  5. Consensus Mechanisms
How do thousands of nodes agree on the current state of the blockchain?

Through consensus algorithms, such as:

#### Proof of Work (PoW)
- Miners solve complex puzzles to validate transactions
- Energy-intensive but highly secure

#### Proof of Stake (PoS)
Used by Ethereum (after the Merge)
- Validators stake tokens instead of mining
- More energy-efficient and scalable


## 6. Transactions
Every interaction on a blockchain (e.g., transfer, mint, swap) is a transaction:

- Signed by a user's private key
- Broadcast to the network
- Verified and added to a block

Once confirmed, it's immutable.

## 7. Gas Fees
Blockchains like Ethereum charge gas fees for every transaction

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High demand = high gas fees
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## 8. Scalability Trilemma
A blockchain must balance:

- Decentralization
- Security
- Scalability

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Most systems can only optimize 2 out of 3. But new innovations (e.g., sharding, L2s) aim to solve this.
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## 9. Wallets
A wallet holds your private key and lets you send/receive crypto.

