Blockchain Technology

Lesson 2 of 4

What is a Block?

A block is a digital container of data. Think of it like a page in a ledger or a chapter in a book. Each block stores:

Transactions

Records of actions (e.g., "Alice sent 2 $SMUD to Bob")

Timestamp

Exact time when the block was created

Hash

Unique digital fingerprint of the block

Previous Hash

Link to the fingerprint of the previous block

What is the Blockchain?

A blockchain is a chain of these blocks, linked together in order. Because each block contains the hash of the one before it, the whole chain becomes extremely secure. If you tamper with one block, it breaks the entire chain.

Block #1 Hash: a1b2c3

Block #2 Prev: a1b2c3 Hash: d4e5f6

Block #3 Prev: d4e5f6 Hash: g7h8i9

This visualization shows how each block references the previous block through its hash. If someone tries to change the data in Block #1:

The hash of Block #1 would change
Block #2's reference would no longer match
The entire chain would become invalid

This creates an immutable record that can't be altered without detection.

What is Consensus?

Consensus is how a blockchain agrees on what's true. Since there's no single ruler (like a bank), the network must come to agreement using special rules or algorithms.

Consensus Type	How It Works	Used By	Energy Use
Proof of Work (PoW)	Computers solve puzzles to add blocks	Bitcoin	High
Proof of Stake (PoS)	Validators stake coins to prove trustworthiness	Ethereum, SUI	Low
Byzantine Fault Tolerance (BFT)	Fast agreement even with bad actors	SUI (Narwhal/Bullshark)	Very Low

Why Decentralization Matters

Traditional Systems

Banks or companies control everything
They manage your money and data
You must trust them not to change rules
They can block your access at any time
Single point of failure

Blockchain Systems

Everyone shares control
No single entity has authority
Rules are coded and public
Your assets are truly yours
No one can freeze or reverse transactions

Key Takeaways

A blockchain is a secure, public record made up of linked blocks
It relies on consensus mechanisms to decide what's valid
Decentralization keeps power distributed among participants
Immutability ensures that records can't be altered once created
Different consensus mechanisms balance speed, security, and energy use