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Blockchain basics, one concept per page

The twenty-four mechanisms that take you from 'a chain of blocks?' to actually seeing how it works.


Steve Hodgkiss 8 concepts

A diagram, the classic misconception, and one thing to go try. That's a page.

Blockchain basics, one concept per page

The twenty-four mechanisms that take you from 'a chain of blocks?' to actually seeing how it works.


Set in Space Grotesk, Inter and JetBrains Mono (SIL Open Font License).

Mechanisms checked against bitcoin.org's developer guide (block chain, proof of work), ethereum.org's developer documentation (consensus, proof-of-stake, accounts, wallets, security, smart contracts, gas, oracles, tokens, NFTs, finality), the Solidity documentation overview, the Hyperledger Fabric documentation, and Wikipedia's article on The DAO. Ethereum is described as it is today: proof-of-stake since 2022.

Educational information only, not financial advice. No investment advice, no price talk, no token recommendations. This book explains mechanisms; it does not tell you to buy anything.

Your purchase is for personal use only. You do not have redistribution rights: please do not share, resell, or republish this book or its pages.

© 2026 Steve Hodgkiss. All rights reserved. Personal use only; no redistribution rights.

Edition 1.0 · stevehodgkiss.net

Contents

Contents


Part 1 · Foundations4
The append-only ledger5
Hashes: fingerprints for data6
Blocks, and the chain between them7
Distributed: many copies, one truth8
Part 2 · Mechanisms
Reorgs and finality9
Part 3 · Using it safely10
Wallets are keys, not accounts11
Seed phrases: the words ARE the wallet12
Part 4 · Smart contracts
Code that runs itself13
Part 1 of 4
What a blockchain actually is
1

Foundations

Before the jargon: a record book made of linked hashes, appended to forever, copied across many computers that all hold the same truth, which is exactly why tampering fails. Five pages on the machine under the buzzword.


In this part
  1. 01The append-only ledger
  2. 02Hashes: fingerprints for data
  3. 03Blocks, and the chain between them
  4. 04Distributed: many copies, one truth

A blockchain is a record book you can only add to. New entries go on the end; old entries are never edited. The history is the point.

Blockchain · No. 01
Foundations

The append-only ledger

A record book with no eraser

A LEDGER NOBODY EDITS. NEW PAGES GO ON THE END, AND OLD PAGES NEVER MOVE.an old entry, rubbed outLEDGERnew entry appends hereappend onlywhat changes:the write rule,not the papera notebooka blockchain's recordNo eraser exists in the design. Fixing a mistake means adding a new entry that says so.

Someone quietly edits an old row of a shared spreadsheet. A blockchain is that book with the write rule changed: entries only append, and every holder sees each new page.

'A database nobody can hack' is hype. It is a ledger that is very hard to rewrite unnoticed.

Ethereum's docs call it a shared database where data in a block cannot change without changing every block after it.

Not a cleverer database. A stranger one, on purpose.

TRY IT THIS WEEK

Open any public block explorer and read one recent block: a timestamp, a list of transactions, a height one higher than the last.

A hash is a short fingerprint computed from any data. Same data in, same print out; change one character and the print is unrecognizably different. You cannot run it backwards.

Blockchain · No. 02
Foundations

Hashes: fingerprints for data

Same data in, same print out

ONE WAY IN, ONE FINGERPRINT OUT. CHANGE A COMMA, THE WHOLE PRINT CHANGES."Send 2 coins to Priya"SHA-256a3f5…9c0264 hex characters. the print"Send 2 coins to Priya!"SHA-2567b81…dd44one character added, total rewriteunrelated printThere is no un-hash button. Matching prints tell you the data matches, exactly.

Let's say you must prove two files match without reading both aloud. Hash them: any data becomes a fixed-length fingerprint, and the smallest edit scrambles it completely.

The misconception is that a hash can be reversed. Nothing in the print lets you rebuild the input.

Bitcoin's guide: hashes convert data into seemingly random numbers, so you can't tweak data to hit a chosen print.

Hashing is a one-way street with a mirror at the end.

TRY IT THIS WEEK

Hash one sentence with an online SHA-256 tool, then change one comma and hash again. Compare the two prints.

A block bundles transactions and carries the hash of the block before it. The link is the chain: tamper with any block and every later block's reference breaks.

Blockchain · No. 03
Foundations

Blocks, and the chain between them

Each block fingerprints the last

EACH BLOCK KEEPS THE FINGERPRINT OF THE ONE BEFORE IT. THAT IS THE CHAIN.BLOCK 899prev 8e31…BLOCK 900prev 51cf…BLOCK 901prev e0b9…next blockbeing builthash of 899hash of 900this block's printEdit block 899 and its print changes: block 900 now points at a number that no longer exists.

Let's say page 900 ends with a summary number, and page 901 opens by copying it. That number is the previous block's hash: each block stores the hash of the block before.

'Chain of blocks' sounds like Lego. The link is a fingerprint, and edits break every reference downstream.

In the guide's words, a transaction cannot be modified without modifying its block and all following blocks.

The chain is a chain of fingerprints.

TRY IT THIS WEEK

Open the newest block in an explorer and find its previous-block hash field. Click it to walk the chain backwards.

Thousands of computers each hold a full copy of the ledger and check new blocks independently. There is no master copy; agreement between the copies is the truth.

Blockchain · No. 04
Foundations

Distributed: many copies, one truth

No master copy, and no owner

EVERY COMPUTER KEEPS THE WHOLE BOOK. THE COPIES CHECK EACH OTHER.node 1node 2node 47node 133node 251node 1,042same height,same last hash,book identicalone node's copya copy that disagreesis simply outnumberedNo master copy. Consensus means most computers agree on the same book, each checking alone.

Let's say one company runs the only copy of a ledger. It can edit history, or vanish with it. A public blockchain spreads the book: every full node holds and checks a copy.

The blockchain lives everywhere at once, not in one place. That is the whole difference.

Bitcoin's guide: each full node stores its own copy; same blocks on several nodes means consensus.

Many copies, one truth. The copies are the security.

TRY IT THIS WEEK

Compare the newest block's height and hash on two different explorers. Two strangers' copies, identical.

When two valid blocks compete, the network keeps the branch with more backing and drops the other: a reorg. Finality is the point after which reversing would require destroying a third of all staked ether.

Blockchain · No. 05
Mechanisms

Reorgs and finality

When a block stops being arguable

TWO BLOCKS ARRIVE AT ONCE. THE NETWORK FOLLOWS THE FORK WITH MORE BACKING.BLOCK 840prev 77c1…block Ablock BBLOCK A+1prev 31f7…more votes win,B becomes a stale branchits transactions return to the queuefinalitylocked in, 2/3 votedno undo button:reverting means burninga third of all staked ETHDeep blocks are past arguing about. The exchange rule of thumb: wait for finality before treating a payment as settled.

Let's say two valid blocks arrive nearly together. The chain forks, briefly. The network follows the branch with more backing; the loser goes stale and its transactions rejoin the queue. That is a reorg.

The misconception is that a block is permanent on arrival. Early blocks are soft, and that softness invites double spends.

Finality is the hard edge: a finalized block cannot be reverted unless an attacker destroys a third of all staked ether.

Seen once: maybe. Finalized: done.

TRY IT THIS WEEK

Watch a latest-blocks feed for five minutes and spot a block that vanishes from the main chain. A live reorg.

Part 3 of 4
Keys, words, mistakes
3

Using it safely

Nobody at a bank watches this account. Five pages on what a wallet really is (keys, not coins), why the 12 words ARE the wallet, what a private key controls, and the classic ways people lose funds to scams and slip-ups.


In this part
  1. 01Wallets are keys, not accounts
  2. 02Seed phrases: the words ARE the wallet

A wallet holds keys, not coins. The balance lives on the ledger, and whoever holds the private key controls it. Swap wallet apps freely; lose the key and the balance stays locked away from you.

Blockchain · No. 06
Using it safely

Wallets are keys, not accounts

Keys, not a bag of coins

THE WALLET DOESN'T HOLD YOUR COINS. IT HOLDS THE KEYS THAT PROVE OWNERSHIP.152not a bag of coinswhat the wallet actually holdsprivate keysigns, secretpublic keyshared freelythe coins live onthe chain's ledger,alwaysswap the pictureA wallet is a tool for using your account. The app can be replaced any day. The keys are the account.

Let's say you 'have 50 coins in your wallet app'. Delete the app. Nothing is lost: the app never held the coins. It held keys, and the balance sits on the ledger.

'Wallet' is the field's most misleading word. ethereum.org: a tool for your account; providers have no custody.

Swap apps freely; the account stays. You never really hold coins, you hold private keys.

The wallet is the keyring. The vault is the chain.

TRY IT THIS WEEK

Find your wallet's receive address and its export-key option (just find it). Notice which one the app guards.

A seed phrase is a list of 12 or 24 words from which every key in the wallet is generated. Type the words into any compatible wallet and the whole account returns.

Blockchain · No. 07
Using it safely

Seed phrases: the words ARE the wallet

12 words regenerate everything

TWELVE ORDINARY WORDS THAT REGENERATE EVERY KEY. THE PAPER IS THE WALLET.01 rifle02 ocean03 amber04 toast05 cable06 piano07 stone08 logic09 maple10 vault11 seven12 ridgewritten once, on paper, in orderwords in, wallet back12 wordsany wallet app,any device,same keys rebornOrder matters, and the words are not a password: they are the account, in plain language.

Let's say the app tells you to write down 12 words, without saying what they are. They are the seed: the wallet turns them into the number that generates every private key.

The phrase backs nothing up to any company. Anyone who learns the words becomes the wallet's owner.

That is also the rescue: the words restore the account into any compatible wallet. Order matters.

The words ARE the wallet. The app is just a viewer.

TRY IT THIS WEEK

Create a throwaway wallet, write its practice seed on paper, wipe it, restore from paper. Watch it return.

A smart contract is a program deployed to the chain with its own address. Anyone can call it; every node runs the same code and agrees on the result. Nobody steers it.

Blockchain · No. 08
Smart contracts

Code that runs itself

A program with an address and no owner

A PROGRAM THAT LIVES ON THE CHAIN AND RUNS EXACTLY AS WRITTEN, FOR EVERYONE.developer writes codedeploys it (pays gas)CONTRACT 0x71…c4an address, like an accountanyone, anytimecalls it with a transactionruns as programmedno owner at the wheelevery nodere-runs thesame codeThe rules execute as written. Whether the code matches anyone's intentions is a separate, human problem.

Let's say a game's rules sat in a program nobody could quietly patch, checked by thousands of computers. That is a smart contract: code at an address on the chain, run by transaction, identical on every node.

The misconception is that someone still operates it. ethereum.org: contracts run as programmed, with no user in control.

Users call a function with a transaction, exactly like sending funds, and interactions are irreversible.

'Runs itself' cuts both ways.

TRY IT THIS WEEK

Open a token contract's page on an explorer and click through its functions. That is a running program's menu.

Index

Index


Blocks, and the chain between them7
Code that runs itself13
Distributed: many copies, one truth8
Hashes: fingerprints for data6
Reorgs and finality9
Seed phrases: the words ARE the wallet12
The append-only ledger5
Wallets are keys, not accounts11