Blockchain & Web3 Fundamentals

Blockchain is a distributed, append-only ledger replicated across many computers (nodes). Records are grouped into blocks, each linked to the previous one by a cryptographic hash, so altering history is practically impossible without redoing the work/stake of the whole network. Nodes agree on the state with a consensus mechanism — no central authority.

Web3 is the idea of an internet where users own their data, identity and assets via blockchains, wallets and smart contracts:

Main uses: cryptocurrencies and payments, stablecoins, decentralised finance (DeFi), NFTs and digital ownership, tokenisation of real-world assets (RWA), supply-chain traceability, decentralised identity, DAOs, gaming.

Honest perspective for interviews: blockchains trade performance and simplicity for decentralisation and trustlessness. Good answers mention when a normal database is the better choice, regulation (e.g. India's 30% tax on virtual digital asset gains and 1% TDS; Taiwan's VASP registration regime) and security risks (scams, hacks, key loss).

Programming-language and tooling versions: Solidity 0.4 (2016) → 0.8 (2020, checked arithmetic) → 0.8.x current; ethers.js v6 (2023); viem 2 (2024); Nethereum 4.x/5.x for .NET.

Transaction lifecycle on Ethereum:

1. User builds a transaction in a wallet (to, value, data, gas limit, max fee, nonce).
2. The wallet signs it with the private key (ECDSA secp256k1).
3. Broadcast to a node via JSON-RPC (eth_sendRawTransaction) → enters the mempool.
4. A block proposer (validator in PoS) selects transactions (usually by fee/priority tip) and builds a block (about every 12 seconds — one slot).
5. Transactions execute in the EVM; state changes (balances, contract storage); gas is charged; events/logs emitted; a receipt records status.
6. The block is attested by validators → added to the chain → confirmations accumulate.
7. Finality — under Ethereum PoS a block is finalised after two epochs (~12.8 minutes); then reverting it would require destroying at least 1/3 of staked ETH.

Smart contract lifecycle: design → write (Solidity) → test (unit + fuzz) → audit → deploy (a transaction creating the contract; code is immutable unless an upgrade pattern is used) → verify source on a block explorer → interact → upgrade via proxy (if designed) or migrate → pause/deprecate.

Block lifecycle (Bitcoin PoW): transactions in mempool → miners assemble a block → find a nonce so the block hash is below the difficulty target (~10 minutes average) → broadcast → nodes validate → longest valid (most-work) chain wins; 6 confirmations is the common safety threshold.