Blockchain Demo - Part 3

Hi! In this video, I’m going to continue with our blockchain demo, focusing on how transactions work—particularly with real-world examples.

Transactions in the Blockchain

The basic logic remains the same: you cannot change transaction data.

For example, if Emily sends 10 Bitcoins to Jackson, no one can later claim that she sent only 7. If someone tries to alter the transaction, they must re-mine not only that block but also every single block that follows it.

And don’t forget, there are other peers in the network. So even if you manage to tamper with your local blockchain, the rest of the network will spot the inconsistency.

The Role of Majority Validation

Let’s say:

• Peer A ends with hash 68AD
• Peer B and Peer C end with hash BAA0

If two out of three peers show the same blockchain state, their version is considered valid. This concept of majority validation ensures data integrity.

Now imagine this not just with 3 peers, but with thousands of nodes. That’s the power of blockchain—this is what we mean when we talk about immutability.

51% Attack: Why It’s Not Practical

To successfully tamper with the blockchain, you'd need to control at least 51% of all nodes and make the same change to every single one. In practice, this is nearly impossible, making blockchain a secure system.

Validating Transactions: Do You Have Enough Bitcoin?

Let’s raise an important question:

If Emily wants to send 7 Bitcoins to Jackson, does she actually own 7 Bitcoins?

To verify this, we look into the Coinbase transactions. These are special transactions that introduce new coins into circulation—usually as miner rewards.

For instance:

• Anders starts with 100 Bitcoins.
• We can now verify if Anders can send 10 Bitcoins to Sofia.
• Yes—because he has that amount.
• Likewise, he can perform multiple transactions as long as he has sufficient balance.

Tracing Back Ownership

What about Ryan, who sends 6 Bitcoins to Carter?

We don’t know if Ryan owns that amount, so we look at the previous block. There, we see Jackson sent 15 Bitcoins to Ryan.

That confirms Ryan's ownership, making his transaction to Carter valid. This ability to trace transactions backward ensures that every transfer is verified before it’s accepted.

Final Thoughts

We’ve walked through the entire process—step by step—to help you understand the fundamentals of:

• Nonce value
• Difficulty level
• Transaction pools
• Miner selection
• Blockchain immutability

I highly encourage you to visit the demo website and experiment on your own. Seeing the process firsthand makes the concepts much clearer.