00 - Smart Contract Security | Blockchain basics

Shivanshu — Sun, 10 Oct 2021 04:57:41 +0000

In this series of smart contract security articles, I (@geekshiv) and @Thtsuman will cover Solidity, Smart Contract, etc with the security (Audit) aspect of it. Let's go through some of the basic terms and concepts before jumping to the complex part.

Block: Block is kind of container which stores data relevant to the network and transactions. Example: If you send ETH to someone, the transaction data needs to be added to a block for it to be successful.

A block may look like this:

Block-chain: Whenever a new block is created it refers to it's parent block and this creates a chain of blocks. A block's data cannot be changed without changing all subsequent blocks, which would require the consensus of the entire network.
Ethereum: Ethereum is built upon the concept of blockchain which acts as an open-source blockchain network providing features like a decentralized ledger, Smart Contracts, tokens (ERC-20 and ERC-721), and has its cryptocurrency called Ether(ETH).
Ether: Ether (ETH) is a cryptocurrency. It facilitates the operations of the ethereum platform.
Example: Any transaction in the ethereum network needs a fee that is paid in the form of ether.
Gas: Gas is a fee that is paid to the miner for the computational effort required to execute specific operations on the Ethereum network.

Consensus: When it comes to a decision of a network or large group the majority of people have to agree upon the decision to be successfully executed. This agreement can be referred to as a consensus mechanism. In Blockchain at least 51% of nodes have to agree for successful execution.
In Ethereum Consensus is achieved using the following Consensus mechanisms:
1. Proof of Work (PoW)
2. Proof of Stake (PoS)
Smart Contract: A smart contract is a digital contract that is deployed on the Ethereum network. A smart contract is basically an agreement between nodes converted into a piece of code which once agreed upon and deployed on the network cannot be changed.
Solidity: Solidity is a programming language that is used to write smart contracts in Ethereum.
Web3: Web3, in the context of Ethereum, refers to decentralized apps that run on the blockchain. These are apps that allow anyone to participate without monetising their personal data.
DAPP: DAPP (decentralized application) is a combination of smart contracts and a frontend interface. DAPP allows users to interact with services using the ethereum network.
DeFi: Defi (Decentralized finance) is a term referred to finance applications or services on a Blockchain network. Its a modern, effective way of decentralized banking that overcome the difficulties faced in the traditional banking system.
Accounts: Every entity in the network had an account of its own which is determined by a unique string. The smart contract also has an account that is different from the owner's account. Example account:

{0x0B76a1869bb55ABE5c8e696552418CD15e9eaEdd}

References:

Forem: Shivanshu

00 - Smart Contract Security | Blockchain basics