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@faariszh

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5) what if there’s a bad actor? - validators that act maliciously (or who forget to participate) get their collateral ETH “slashed” (burned and removed from circulation) - this slashing provides incentive for validators to act in an honest way
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4) but why would someone want to lock up their ETH? - for helping to secure the network (by validating transactions), validators are rewarded with ETH
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3) proof-of-stake: - ethereum also differs from bitcoin in its consensus mechanism. rather than proof-of-work (PoW), ethereum uses proof-of-stake (PoS) - this mechanism is similar to PoW but instead of miners, there are “validators” who lock up their ETH as collateral to demonstrate their commitment to the system. this gives them the opportunity to validate transactions
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2) enter ethereum: - ethereum is also a large virtual computer that can track transactions securely. however, it can also be sent instructions and given programs to run (smart contracts) - for example, on the ethereum blockchain, one could write a program saying “send 1 ETH to my friend if the Timberwolves win the NBA finals” - this is just one of the many applications of smart contracts
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a simple explanation of what Ethereum is and how it actually works ↓ 1) some context to start: - from a very high-level view, bitcoin is a virtual computer that uses mining to incentivize people to collaborate and compete with each other to keep a database secure and up-to-date - this is a great system for keeping a secure list of transactions, however this is just about all bitcoin can do
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@dwr.eth thoughts on solana’s blinks? do you think this just validates frames or presents competition?
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6) although PoW is secure, it wastes a lot of electricity, which is obviously not great for the environment. this is why many blockchains (like Ethereum) use another consensus method called Proof-of-Stake (PoS), which I will dive into in my next post, so follow for more content like this. also happy to answer any questions!
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5) hashing: - hashing involves a miner taking a summary of the list of transactions in a block, the hash of the previous block, a random number called a nonce, and putting it all through a hashing algorithm (like SHA-256). - this spits out a 64 digit hexadecimal number that may or may not meet the requirements of the Bitcoin software - it is very unlikely to find the right hash, which means that hashing/mining uses a large amount of computational power and electricity - this ensures miners’ commitment to faithfully verifying blocks because they are spending resources (money) to mine blocks - the energy intensive nature of mining and hashing also deters attacks, as gaining control of 51% of the nodes in the network would be extremely expensive. possibly so expensive that it wouldn’t even be worth it to attack the network
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4) mining: - mining is literally just a computer (node) trying over and over to calculate a hash (a string of numbers and letters) that satisfies the requirements of the Bitcoin software - for example, the requirement might be to calculate a hash that starts with 19 zeroes - if the correct hash is found, the miner publishes the block and its corresponding hash to the Bitcoin network. other miners review the block and if the majority agrees, the block is committed to the blockchain - miners are incentivized to “mine” because they receive Bitcoin each time they mine a new block
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3) proof-of-work: - Bitcoin’s consensus mechanism is called “Proof-of-Work” (PoW) - PoW uses “miners” (nodes) that propose lists of transactions (blocks) to other miners on the Bitcoin network - the other miners verify that the transactions and other qualities of the block are valid - if the majority of miners agree on the block, it’s posted to the blockchain
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2) new blocks: - a new block is created and verified through a consensus mechanism - this mechanism ensures that a majority of computers (nodes) on the network agree that a block is valid before being committed to the blockchain
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a simple explanation of what blockchains are and how they actually work (Bitcoin specifically) ↓ 1) an overview: - a blockchain can track and carry out transactions without the need for a 3rd party (think: banks, Venmo, Zelle, etc.) - as transactions occur, they're grouped into files called "blocks" - each block contains a list of transactions - each block is connected to the next block by referencing the previous one
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