https://cointelegraph.

com/explained/centralized-vs-decentralized-digital-networks-key-differences

Centralized and decentralized networks

https://www.geeksforgeeks.org/components-of-blockchain-network/

components of blockchain

https://www.geeksforgeeks.org/blockchain-and-block-header/?ref=lbp

block-header

https://www.geeksforgeeks.org/introduction-to-merkle-tree/

merkle tree

- Proof-of-work (POW) is a protocol used to prevent cyber-attacks in cryptocurrency mining.

- Satoshi Nakamoto applied the proof-of-work system to Bitcoin in 2009.

- Proof-of-work is a consensus algorithm used to validate transactions and broadcast new blocks to
the blockchain.

- Transactions are verified by solving complex mathematical operations through mining.

- Miners compete with each other to solve a complex computer calculation by setting the hash of the
block.

- Once a miner finds a solution, it is sent to the network for verification by other miners.

- The majority of miners must agree with the solution for it to be accepted and a reward in
cryptocurrency is distributed to the miners who have contributed to the verification of the block.

- As the number of bitcoins available for mining decreases, mining becomes more difficult and
expensive.

Proof-of-Work (PoW) is a consensus algorithm used in blockchain technology to validate transactions

and broadcast new blocks to the blockchain. PoW allows security on the network through distributed
consensus, and transactions are verified by solving a complex mathematical operation called mining.
Miners on a network compete with each other to solve a complex computer calculation by setting
the hash of the block. These calculations are hard to solve, but the solution is easy to verify. Once a
miner has found a solution, the block is sent to the network where all other miners verify if the
solution is correct. If the majority of miners agree with the solution, a reward in cryptocurrency is
distributed to the miners who contributed to the verification of the block. The technology of
transaction verification and new Bitcoins production is based on PoW. The number of Bitcoins is
limited, so the more coins are placed on the market, the less is available for mining, making mining
more difficult. PoW can be expensive, and an algorithm called proof-of-stake was conceived to solve
this problem.
Bullet Summary:

- Proof-of-Work (PoW) is a consensus algorithm used in blockchain technology

- PoW allows security on the network through distributed consensus

- Transactions are verified by solving a complex mathematical operation called mining

- PoW can be expensive

- An algorithm called proof-of-stake was conceived to solve this problem

- Proof-of-stake (POS) is a system for validating transactions in cryptocurrencies.

- It was suggested as an alternative to proof-of-work (POW) in 2011.

- In POS, blocks are forged rather than mined by validators.

- The creator of a new block is chosen based on stake (richness), age of the stake, and randomization.

- The size of the stake determines the chances of being selected as the next validator.

- The network is more decentralized and secure, and attacks are unlikely.

- Users must lock a certain amount of coins as their stake to participate in the forging process.

- POS is more accessible to users with less skills and smaller amounts of coins.

Proof-of-Stake (POS) is a system for validating transactions and maintaining security in a

cryptocurrency network. It was first suggested in 2011 as a way to solve problems with the Proof-of-
Work (POW) algorithm. In a POS system, blocks are forged rather than mined, and validators are
responsible for validating transactions and putting new money into circulation. Validators are chosen
based on the size of their stake, their stake's age, and randomization. The size of a stake determines a
node's chances of being selected to forge the next block. Other methods are used to ensure the
process is not biased towards the richest nodes in the network. Users must lock a certain amount of
coins into the network as their stake in order to participate in the forging process. Validators receive
transaction fees as a reward for their work. The more validators there are, the more decentralized
the network becomes, making it more difficult for attackers to compromise the system. POS is more
accessible to those with fewer skills or a smaller quantity of coins, and it leads to higher
decentralization and a more distributed consensus than POW. Attacks on the network are extremely
difficult and unlikely.
Bullet Summary:

- POS is a system for validating transactions and maintaining security in a cryptocurrency network

- It was first suggested in 2011 as a way to solve problems with the POW algorithm

- Blocks are forged rather than mined, and validators are responsible for validating transactions and
putting new money into circulation

- Validators are chosen based on the size of their stake, their stake's age, and randomization

- Users must lock a certain amount of coins into the network as their stake in order to participate in
the forging process

- Validators receive transaction fees as a reward for their work

- The more validators there are, the more decentralized the network becomes

- POS is more accessible and leads to higher decentralization and a more distributed consensus than
POW

- Attacks on the network are extremely difficult and unlikely

• Cryptocurrency mining is essential for the functioning of a decentralized network.

• Mining involves checking, validating, and encrypting new transaction blocks.

• Proof-of-work (POW) and proof-of-stake (POS) are the most common types of mining.

• POW and POS have different algorithms and involve different players (miners vs validators).

• Mining serves two purposes: verifying transaction legitimacy and introducing new coins into
circulation.

• Miners collect transactions and arrange them in blocks.

• The first stage of mining is producing the hash for each transaction in the block.

• Miners are rewarded with new coins and transaction fees for contributing to the security of the
system.

Cryptocurrency mining is the process of validating and encrypting new blocks of transactions, which
is necessary for the functioning of a decentralized network without the intervention of a third party.
Miners act as system administrators and maintain the blockchain by adding new blocks of
transactions. Proof-of-work (POW) and proof-of-stake (POS) are the two most common types of
mining, although the latter is also referred to as forging and is performed by validators. The purpose
of mining is to verify the legitimacy of a transaction and to introduce new coins into the existing
circulating supply. Miners are nodes within the network that collect and validate transactions before
arranging them into blocks. They generate a hash for each transaction and transmit it to the network,
with the other nodes checking that the hash is valid before adding the block to their copy of the
blockchain. Miners are rewarded for their work because they contribute to the security of the system
by verifying transactions, and this reward is based on the distribution of new coins generated for
each block, divided by transaction fees.

Bullet Summary:

- Cryptocurrency mining validates and encrypts new blocks of transactions

- Miners act as system administrators and maintain the blockchain

- Proof-of-work (POW) and proof-of-stake (POS) are the two most common types of mining

- Mining is necessary to verify the legitimacy of a transaction and introduce new coins into the
existing circulating supply

- Miners are rewarded for their work based on the distribution of new coins generated for each
block, divided by transaction fees.

- Proof-of-work (POW) and proof-of-stake (POS) operate differently to validate blocks and reach
consensus.

- POW rewards miners with coins for solving mathematical puzzles, which requires computational
power and consumes a lot of electricity.

- POS rewards validators with transaction fees for putting their wallets available to the network for
transaction validation.

- POS attributes mining power to the proportion of coins held by a miner, limiting energy
consumption and decentralizing the network.

- Validators are chosen with a probability proportional to the amount of coin they hold.

- A network that works with POS is often more decentralized than one with POW.

- The more validators that open their wallets to activate the stake, the safer the network becomes.

- WEWE has chosen POS for its green philosophy and to allow all users to participate in forging.
Proof-of-work (POW) and proof-of-stake (POS) are two different methods of validating a block and
reaching consensus in cryptocurrency networks. While POW requires computational power to solve
complex mathematical puzzles, POS rewards validators with transaction fees for making their wallets
available to the network. POS offers advantages over POW in terms of efficiency, cost, time, gains,
and security, as it is less energy-intensive and more decentralized. With POS, mining power is
attributed to the proportion of coins held by a miner, rather than computational power. Validators
are chosen based on the amount of coin they hold, with a probability proportional to their stake. The
more validators participate, the more secure the network becomes. While POW can lead to
centralization due to major mining nodes that have more capital to mine, POS distributes wealth
between nodes based on factors such as age of wallet and random choice, making it more
decentralized. WEWE has chosen POS for its green philosophy, allowing all users to participate in
forging and ensuring the node system. Users can open their stake wallets to start forging and
earning.

• A 51% attack is a type of cyberattack aimed at controlling the majority of the node network that
verifies transactions in order to execute fraudulent transactions.

• This bypasses the decentralized network and the consensus is held by a single node or group of
nodes attacking the network all at once.

• Decentralization and verification of transactions based on the consensus of a decentralized

network is what makes the blockchain secure.

• The largest networks have better protection against 51% attacks because they are harder to
compromise.

• Proof-of-work (POW) and proof-of-stake (POS) have different algorithms, but both can be targeted
by 51% attacks.

• In a 51% attack in POW, miners can spread false blocks containing fraudulent transactions in the
blockchain, allowing for double-spending.

• 51% attacks are difficult to achieve in POW as immense computing power is required.
• In POS, to reach 51% control of the node network, attackers would need to possess most of the
cryptocurrency coins, which is not worth investing in, and the selection of nodes for validation is
based on various criteria, making the attack nearly impossible.

A 51% attack is a type of cyberattack that aims to control the majority of the node network that
verifies transactions, allowing fraudulent transactions to be executed. This is achieved by gaining
control of 51% of the network, bypassing the concept of decentralized network and holding the
consensus with a single node or group of nodes. Decentralization and consensus of a decentralized
network make the blockchain secure. The largest networks have better protection against 51%
attacks because they are harder to compromise. Proof-of-work and proof-of-stake are two different
algorithms that have different types of 51% attacks. In proof-of-work, verification is done through
computing power, making it difficult to achieve a 51% attack due to the immense computing power
required. In proof-of-stake, mining a block is accessible based on the amount of coins possessed,
making it nearly impossible to achieve a 51% attack due to the criteria of selecting nodes placed in
the verification process. Cybercriminals can spread false blocks containing fraudulent transactions in
the blockchain, allowing them to perform double-spending.

Bullet Summary:

- A 51% attack aims to control the majority of the node network that verifies transactions

- Decentralization and consensus of a decentralized network make the blockchain secure

- The largest networks have better protection against 51% attacks

- Proof-of-work and proof-of-stake have different types of 51% attacks

- Cybercriminals can spread false blocks containing fraudulent transactions in the blockchain,
allowing them to perform double-spending.
- Smart contracts are programs run on a blockchain that function as a digital agreement controlled by
a set of rules.

- Smart contracts make it possible to create trustless protocols by ensuring that the contract will not
be executed if conditions are not met.

- Smart contracts can remove the need for intermediaries, reducing operating costs.

- They were first described by Nick Szabo in the 1990s and popularized by Vitalik Buterin.

- Smart contracts work like deterministic programs, performing operations only if certain conditions
are met.

- Smart contracts are distributed, deterministic, independent, immutable, trustless, and transparent.

- They can be designed for various use cases, including tokenized assets, voting systems, and
decentralized finance.

- Smart contracts can be risky if not written and implemented by experienced programmers,
especially when handling sensitive information or large sums of money.

Smart contracts are computer programs that run on a blockchain and function as digital agreements
controlled by a set of predefined rules. Smart contracts can create trustless protocols, remove the
need for intermediaries, and significantly reduce operating costs. They were first described in the
1990s by computer scientist Nick Szabo and have been popularized by Ethereum founder Vitalik
Buterin. Smart contracts on Ethereum are made up of a contract code and two public keys, with one
key acting as a unique digital identifier for each smart contract. The main features of smart contracts
include being distributed, deterministic, independent, immutable, trustless, and transparent. Smart
contracts can be designed for a wide range of use cases, including tokenized assets, voting systems,
crypto wallets, decentralized exchanges, video games, and mobile applications. However, smart
contracts can be subject to vulnerabilities and bugs, posing risks to sensitive information or large
sums of money. Therefore, they should only be written and implemented by experienced
programmers. Overall, smart contracts can provide a solution to process actions autonomously, cost-
effectively, and transparently.

Bullet Summary:

- Smart contracts are computer programs that run on a blockchain and function as digital agreements
controlled by predefined rules

- They can create trustless protocols and reduce operating costs by removing intermediaries

- Smart contracts were first described by Nick Szabo and popularized by Vitalik Buterin

- Main features include being distributed, deterministic, independent, immutable, trustless, and
transparent

- Smart contracts can be designed for a wide range of use cases

- They can be subject to vulnerabilities and bugs, posing risks to sensitive information or large sums
of money

- They should only be written and implemented by experienced programmers

- Smart contracts can provide a solution to process actions autonomously, cost-effectively, and
transparently.

1. Blockchains use advanced cryptographic techniques and mathematical models to ensure security.

2. Blockchain technology prevents duplication or destruction of digital currency.

3. Blockchain technology is being developed for use in other contexts, such as medical databases.

4. Consent and immutability are key concepts in blockchain security.

5. Consensus algorithms ensure system rules are followed and all parties agree on the network's
state.

6. Immutability guarantees the integrity of data and transaction logs.

7. Cryptography is used to protect information and communications in blockchain networks.

8. Public-key cryptography is fundamental for wallets and transactions, and private keys are
necessary for ownership and control over wallets.

Blockchain technology is protected by a range of mechanisms, including cryptographic techniques

and mathematical models, which prevent the duplication or destruction of cryptocurrency. The
technology is also being developed for use in other contexts, such as medical databases, where data
security is crucial. Consensus and immutability are two of the key concepts that provide the
framework for data security in blockchain networks. Consent refers to the ability of nodes to agree
on the network's state, while immutability prevents alterations to confirmed transactions.
Cryptography is another essential element of blockchain technology, used to protect information and
communications through codes. Hashing is a method of converting data into a character string that is
used in blockchain work, and cryptographic techniques are employed to secure wallets used to store
cryptocurrency units. Public-key cryptography is the underlying technology for wallets and
transactions, with a public address generated from the public key and a private key used for
ownership and control. Overall, a balance between decentralization and security is critical for the
development of reliable and effective cryptocurrency networks.