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The Blockchain

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The Blockchain

A blockchain is a distributed ledger which enables secure, transparent, and tamper-resistant record keeping across a decentralized network of computers. New entries in a blockchain are added into a list of data-entries grouped in blocks. For simplicity, think of these blocks as pages in a ledger.
The blocks are linked together to form an immutable chain using cryptographic techniques and this eliminates the need for a central authority.

Typically, blockchains exist to record transactions in a permissionless peer-to-peer network, and a group of participants (nodes) manage the network through creation and validation of transactions in new blocks. These transactions are batched and sent to the network, and the first node to successfully mint a new block receives a percentage of the gas fees from the batch of transactions as a reward for contributing their resources, and incentivise them to participate actively and honestly in the network.

Gas fee is crypto jargon for transaction fee, but with a caveat. Transaction fees in traditional finance exist to prop up the PnL margins of entities facilitating the exchange of value among parties. Remember, participants in this system have little to none choice of using these platforms.

In decentralised finance, gas fees simply act as a bid to prioritize transactions in the network especially during periods of high network congestion.
Definitely, these fees get high at times since many users are placing bids synchronously for their transactions to be processed but all the users participating in the network are willing players. In the case gas fees become untenable, there are work arounds like utilising rollups. Also, users have the freedom to adjust their gas fees based on the priority they need their transaction to be given.