Well, we gotta start forum from some content 😊 So I thought to write about some fundamental thing in blockchain… And thought: Why do we even need a blockchain at all? Well, to hold/timestamp transactions, but what is transaction? Transaction (at least in context of blockchains) is just a request (like HTTP request) to the "system program" that is signed with cryptographic signature and is positioned using the blocks in blockchain. Absolutely every blockchain has such "system program", including bitcoin - at least for accounting balances. Let's start from "web2 transaction" just for an example: const express = require('express') const app = express() let balances={ test:100 } app.get('/transfer/:from/:to/:amount', (req, res) => { //we entered "transaction processing phase" //req.params is "transaction body" //this handler basically represents part of a "system program" that processes transfers balances[req.params.from]-=req.params.amount balances[req.params.from]+=req.params.amount }) if(window.hljsLoader && !document.currentScript.parentNode.hasAttribute('data-s9e-livepreview-onupdate')) { window.hljsLoader.highlightBlocks(document.currentScript.parentNode); } And that's it! No rocket science, right? If you know even a little bit of JS, you should understand the concept of transactions now. Now, obviously example above is centralized, insecure, stupid, but the details fixing these issues are no more than that - the details, which do not affect the bigger picture of what really the transaction is. A lot of people in the space try to really overcomplicate matters, probably to look smart or just because everybody does it, or to raise more money from VCs, but most of things in cryptocurrencies are stupidly simple. This explanation is certainly not for cryptocurrency experts that this forum targets, but I bet that even if you're one, now you have a good way to explain transactions to friends, family, cat, cockroaches in your kitchen. Hit me up in answers to this thread if you still don't get it, want eli5 explanation of some other concepts (like smart contracts, blocks, PoS, PoW, BFT, UTXOs, etc).

Interesting way to show the crux of a ledger/spreadsheet. Though I also tend to explain this to people that are more of a sys admin and web devs by using MySQL as a reference point: You have a single MySQL db, this is one Bitcoin node. You scale that to two nodes, and setup active-active replication. Now you decide the two servers cannot trust each other, so you need a consensus system (etcd is a real example which uses Raft, though that assumes trust). Lastly you decide that for security, some sort of economy needs to exist, so that making changes has a cost to it. You now have transformed a traditional web2 database into a blockchain. I do think that more need to really understand this because the hype around it just gets old after a while. Blockchains are not mythical data structures, just immutable (usually!) spreadsheets that are P2P (distributed).

ELI5: How do blockchain transactions work?

angrymouse

Well, we gotta start forum from some content 😊

So I thought to write about some fundamental thing in blockchain… And thought: Why do we even need a blockchain at all?
Well, to hold/timestamp transactions, but what is transaction?
Transaction (at least in context of blockchains) is just a request (like HTTP request) to the "system program" that is signed with cryptographic signature and is positioned using the blocks in blockchain.

Absolutely every blockchain has such "system program", including bitcoin - at least for accounting balances.

Let's start from "web2 transaction" just for an example:

const express = require('express') 
const app = express() 

let balances={
test:100
}

app.get('/transfer/:from/:to/:amount', (req, res) => {  
//we entered "transaction processing phase"
//req.params is "transaction body"
//this handler basically represents part of a "system program" that processes transfers

balances[req.params.from]-=req.params.amount
balances[req.params.from]+=req.params.amount
})

And that's it! No rocket science, right?
If you know even a little bit of JS, you should understand the concept of transactions now.
Now, obviously example above is centralized, insecure, stupid, but the details fixing these issues are no more than that - the details, which do not affect the bigger picture of what really the transaction is.

A lot of people in the space try to really overcomplicate matters, probably to look smart or just because everybody does it, or to raise more money from VCs, but most of things in cryptocurrencies are stupidly simple.

This explanation is certainly not for cryptocurrency experts that this forum targets, but I bet that even if you're one, now you have a good way to explain transactions to friends, family, cat, cockroaches in your kitchen.
Hit me up in answers to this thread if you still don't get it, want eli5 explanation of some other concepts (like smart contracts, blocks, PoS, PoW, BFT, UTXOs, etc).

pcfreak30

Interesting way to show the crux of a ledger/spreadsheet.

Though I also tend to explain this to people that are more of a sys admin and web devs by using MySQL as a reference point:

You have a single MySQL db, this is one Bitcoin node.
You scale that to two nodes, and setup active-active replication.
Now you decide the two servers cannot trust each other, so you need a consensus system (etcd is a real example which uses Raft, though that assumes trust).
Lastly you decide that for security, some sort of economy needs to exist, so that making changes has a cost to it.
You now have transformed a traditional web2 database into a blockchain.

I do think that more need to really understand this because the hype around it just gets old after a while. Blockchains are not mythical data structures, just immutable (usually!) spreadsheets that are P2P (distributed).