Blockchain Fundamentals
Core Concepts
How It Works
A blockchain is an append-only linked list of blocks. Each block contains a hash of the previous block. Changing any past block invalidates all subsequent hashes — this is immutability.
Consensus
| Mechanism |
How |
Used By |
Trade-off |
| Proof of Work |
Miners solve puzzles |
Bitcoin |
Secure but energy-intensive |
| Proof of Stake |
Validators stake tokens, slashed if dishonest |
Ethereum |
Efficient, ~99.95% less energy |
| Proof of Authority |
Trusted validators |
Private chains |
Fast but centralized |
Key Numbers
| Metric |
Ethereum L1 |
Base (L2) |
Bitcoin |
| Block time |
~12s |
~2s |
~10min |
| TPS |
~15 |
~1000 |
~7 |
| Finality |
~12min |
~minutes |
~60min |
| Gas cost |
$$$ |
$ |
N/A |
The EVM (Ethereum Virtual Machine)
- Stack-based VM executing smart contract bytecode
- Every node runs the same computation → deterministic consensus
- Storage is EXPENSIVE: writing 32 bytes costs
20,000 gas ($0.50-$50)
- Memory is cheap. Design accordingly: compute at read time, store minimally
- No floating point. All math is integer. Use fixed-point (amounts in wei, not ETH)
Key Concepts for Developers
Wallet: public/private key pair. Address = identity. Private key = NEVER expose.
Transaction: signed message. Contains: to, value, data, gas limit, gas price.
Smart Contract: code at a blockchain address. Immutable once deployed.
ABI: JSON describing contract functions/events. The "API spec."
Events/Logs: cheap data emission (vs storage). Frontends listen to these.
Token Standards
| Standard |
Type |
Use Case |
| ERC-20 |
Fungible tokens |
Arena Coins (interchangeable units) |
| ERC-721 |
NFTs |
Badges, trophies (each unique) |
| ERC-1155 |
Multi-token |
Batch of different items (mixed badges) |
L1 vs L2
| Layer |
Examples |
Cost |
Speed |
Security |
| L1 |
Ethereum mainnet |
$$$ |
Slow |
Maximum |
| L2 Optimistic |
Optimism, Base, Arbitrum |
$ |
Fast |
Ethereum (fraud proofs) |
| L2 ZK |
zkSync, Starknet, Polygon zkEVM |
$ |
Fast |
Ethereum (validity proofs) |
For new projects: ALWAYS build on L2. Base (by Coinbase) is the current default — low fees, high throughput, Ethereum security.
Optimistic vs ZK rollups:
- Optimistic: assume valid, fraud proofs if challenged. 7-day withdrawal delay. Easier to build.
- ZK: cryptographic proof of validity. No delay. Harder to build. Better long-term scaling.
What Goes On-Chain vs Off-Chain
| On-Chain (expensive, permanent, verifiable) |
Off-Chain (cheap, fast, mutable) |
| Token balances (Arena Coins) |
User profiles |
| Badge ownership (NFTs) |
Challenge descriptions |
| Challenge results (hash) |
Full transcripts |
| ELO snapshots (end of season) |
Real-time leaderboards |
| Reputation scores |
Session data |
Rule: Store the minimum needed for verification on-chain. Everything else stays in Supabase.
Sources
- ethereum/solidity documentation
- OpenZeppelin/openzeppelin-contracts
- Ethereum.org developer documentation
- Vitalik Buterin's "Endgame" L2 vision
Changelog
- 2026-03-21: Initial skill — blockchain fundamentals
1---2name: blockchain-fundamentals3description: How blockchain actually works — consensus, EVM, gas, transactions, smart contracts, token standards, L1 vs L2. The engineering, not the hype.4---56# Blockchain Fundamentals78## Core Concepts910### How It Works11A blockchain is an **append-only linked list of blocks**. Each block contains a hash of the previous block. Changing any past block invalidates all subsequent hashes — this is immutability.1213### Consensus14| Mechanism | How | Used By | Trade-off |15|-----------|-----|---------|-----------|16| Proof of Work | Miners solve puzzles | Bitcoin | Secure but energy-intensive |17| Proof of Stake | Validators stake tokens, slashed if dishonest | Ethereum | Efficient, ~99.95% less energy |18| Proof of Authority | Trusted validators | Private chains | Fast but centralized |1920### Key Numbers21| Metric | Ethereum L1 | Base (L2) | Bitcoin |22|--------|------------|-----------|---------|23| Block time | ~12s | ~2s | ~10min |24| TPS | ~15 | ~1000 | ~7 |25| Finality | ~12min | ~minutes | ~60min |26| Gas cost | $$$ | $ | N/A |2728## The EVM (Ethereum Virtual Machine)2930- Stack-based VM executing smart contract bytecode31- Every node runs the same computation → deterministic consensus32- **Storage is EXPENSIVE:** writing 32 bytes costs ~20,000 gas (~$0.50-$50)33- **Memory is cheap.** Design accordingly: compute at read time, store minimally34- **No floating point.** All math is integer. Use fixed-point (amounts in wei, not ETH)3536## Key Concepts for Developers3738```39Wallet: public/private key pair. Address = identity. Private key = NEVER expose.40Transaction: signed message. Contains: to, value, data, gas limit, gas price.41Smart Contract: code at a blockchain address. Immutable once deployed.42ABI: JSON describing contract functions/events. The "API spec."43Events/Logs: cheap data emission (vs storage). Frontends listen to these.44```4546## Token Standards4748| Standard | Type | Use Case |49|----------|------|----------|50| **ERC-20** | Fungible tokens | Arena Coins (interchangeable units) |51| **ERC-721** | NFTs | Badges, trophies (each unique) |52| **ERC-1155** | Multi-token | Batch of different items (mixed badges) |5354## L1 vs L25556| Layer | Examples | Cost | Speed | Security |57|-------|----------|------|-------|----------|58| L1 | Ethereum mainnet | $$$ | Slow | Maximum |59| L2 Optimistic | Optimism, Base, Arbitrum | $ | Fast | Ethereum (fraud proofs) |60| L2 ZK | zkSync, Starknet, Polygon zkEVM | $ | Fast | Ethereum (validity proofs) |6162**For new projects: ALWAYS build on L2.** Base (by Coinbase) is the current default — low fees, high throughput, Ethereum security.6364**Optimistic vs ZK rollups:**65- Optimistic: assume valid, fraud proofs if challenged. 7-day withdrawal delay. Easier to build.66- ZK: cryptographic proof of validity. No delay. Harder to build. Better long-term scaling.6768## What Goes On-Chain vs Off-Chain6970| On-Chain (expensive, permanent, verifiable) | Off-Chain (cheap, fast, mutable) |71|---------------------------------------------|-----------------------------------|72| Token balances (Arena Coins) | User profiles |73| Badge ownership (NFTs) | Challenge descriptions |74| Challenge results (hash) | Full transcripts |75| ELO snapshots (end of season) | Real-time leaderboards |76| Reputation scores | Session data |7778**Rule:** Store the minimum needed for verification on-chain. Everything else stays in Supabase.7980## Sources81- ethereum/solidity documentation82- OpenZeppelin/openzeppelin-contracts83- Ethereum.org developer documentation84- Vitalik Buterin's "Endgame" L2 vision8586## Changelog87- 2026-03-21: Initial skill — blockchain fundamentals
nickgallick