Resources : github - cyfrin fundary-full-course-f12

blockchain-basics

Best Practices for Learning

1.​ 🌐 Engage with the Community by using GitHub discussions and Discord for real-time
communication. Remember that asking questions and interacting with others can greatly

🏝️
enhance your understanding and retention of the material.
2.​ Take Regular Breaks: Avoid cramming all the information in one go because your

3.​ ⏩
brain needs time to process and absorb the knowledge.
Adjust the Video Playback Speed: Use the speed controls in the video player to

4.​ 📝
match the pace of the lesson with your learning speed.
Use Subtitles if Needed: If English isn't your first language, take advantage of the

5.​ 🔄
subtitle options available in the video settings.
Follow a Modular Approach: The course is designed to be flexible. You can jump
between topics based on your interests and needs. Revisit lessons to reinforce your

🎯
knowledge and ensure thorough understanding.
6.​ Utilize Quizzes and Coding Challenges: Cyfrin Updraft offers both quizzes and
coding challenges. You'll find quizzes at the end of each section and coding challenges
at the end of each GitHub repository section. These will let you earn NFTs as badges of

❓
honor for your achievements.
7.​ Learn to Ask Well-Formatted Questions: Asking questions is a skill too.
Remember this when you are asking clear, concise questions in forums and discussions
to get the best help from others.

Bitcoin and Blockchain

You might be familiar with Bitcoin, which is one of the first protocols to utilize the revolutionary
blockchain technology. The Bitcoin Whitepaper, authored by the pseudonymous Satoshi
Nakamoto, described how Bitcoin could facilitate peer-to-peer transactions within a
decentralized network using cryptography. This gave rise to censorship-resistant finance and
presented Bitcoin as a superior digital store of value, often referred to as digital gold. There is
a fixed amount of Bitcoin, similar to the scarcity of gold. You can learn more about this in the
Bitcoin Whitepaper.

Ethereum and Smart Contracts

A few years after Bitcoin's creation, Vitalik Buterin and others founded Ethereum, which builds
upon the blockchain infrastructure, but with additional capabilities. With Ethereum, you can
create decentralized transactions, organizations, and agreements without a centralized
intermediary. This was achieved through the addition of smart contracts.
Though the concept of smart contracts was originally conceived in 1994 by Nick Szabo,
Ethereum made it a reality.

Smart contracts are a set of instructions executed in a decentralized way without

the need for a centralized or third party intermediary.

Smart Contract functionality is the primary difference between blockchains like Ethereum and
Bitcoin. Technically Bitcoin does have smart contracts but they're intentionally turing
incomplete.

The Oracle Problem

However, smart contracts face a significant limitation – they cannot interact with or access data
from the real world. This is known as the Oracle Problem.

Blockchains are deterministic systems, so everything happens within their ecosystem. To make
smart contracts more useful and capable of handling real-world data, they need external data
and computation.

Oracles serve this purpose. They are devices or services that provide data to blockchains or run
external computation. To maintain decentralization, it's necessary to use a decentralized Oracle
network rather than relying on a single source. This combination of on-chain logic with off-chain
data leads to hybrid smart contracts.

Note: Most of this course will assume we'r working with an Etherum or EVM
environment. The skills you learn here will be compatible with the vast majority of
blockchain architectures!

Chainlink

Chainlink is a popular decentralized Oracle network that enables smart contracts to access
external data and computation. Chainlink is also blockchain agnostic - so it's going to work with
any chain out there.

Layer 2 Scaling Solutions

As blockchains grow, they face scaling issues. Layer 2, or L2, solutions have been developed to
address this. L2 solutions involve other blockchains hooking into the main blockchain,
essentially allowing it to scale. There are two primary types of L2 solutions:

●​ Optimistic Rollups: eg. Optimism, Arbitrum

●​ Zero-Knowledge Rollups: eg. ZK Sync, Polygon ZK EVM

Don't worry too much about this now. Once we understand how blockchains work 'under the
hood', we'll go further into Layer 2's then.
Web3

Web3 is a term used to describe the new paradigm of the internet powered by blockchain and
smart contracts. Unlike the previous versions of the web, web3 is permissionless and relies on
decentralized networks rather than centralized servers. This ushers in an era of
censorship-resistant and transparent agreements and transactions, often called an ownership
economy.

Web1: The permissionless open sources web with static content

Web2: The permissioned web, with dynamic content where companies run your agreements on
their servers.

Web3: The permissionless web with dynamic content.

●​ Decentralized censorship resistant networks run your agreements and code.

●​ User owned ecosystems where one owns a portion of the protocol they interact with -
instead of solely being the product

Terminology

You're going to hear some terms used in this course (and the community as a whole) a little
interchangeably. Maybe you haven't heard these terms before. I hope this offers a bit of
clarification.

<details> <summary>Common Terms</summary>

1.​ Blockchain: In web3, a blockchain is a digital ledger that records transactions across
many computers in a secure and decentralized manner. Each block contains a number
of transactions, and every new block is linked to the previous one, forming a chain. This
makes the data tamper-resistant. Example: Bitcoin's blockchain records all BTC
transactions.
2.​ Oracle: Oracles in web3 are intermediaries that provide smart contracts with external
data. They act as bridges between blockchains and the outside world, allowing smart
contracts to execute based on real-world events and data. Example: A weather oracle
provides data for a smart contract that triggers crop insurance payments based on
rainfall data.
3.​ Layer 2: Layer 2 solutions in web3 are technologies built on top of a blockchain (Layer
1) to improve its scalability and efficiency. These solutions handle transactions off the
main chain, reducing congestion and fees, and then settle the final state on the main
chain. Example: The Lightning Network for Bitcoin.
4.​ Dapp (Decentralized Application): A Dapp is an application that runs on a
decentralized network, typically a blockchain. It is powered by smart contracts and
operates without a central authority. Dapps can serve various purposes, from finance to
gaming. Example: Uniswap, a decentralized finance application.
 5.​ Smart Contract: In web3, a smart contract is a self-executing contract with the terms of
the agreement directly written into code. They run on blockchains and automatically
execute when predetermined conditions are met, without the need for intermediaries.
Example: A smart contract for an escrow service.
6.​ Hybrid Smart Contract: Hybrid smart contracts combine on-chain code (running on a
blockchain) with off-chain data and computations provided by oracles. This allows the
contracts to interact with data and systems outside their native blockchain. Example: A
smart contract for insurance that uses real-world data (like weather or flight delays)
provided by oracles.
7.​ Ethereum/EVM (Ethereum Virtual Machine): Ethereum is a blockchain platform known
for its smart contract functionality. The Ethereum Virtual Machine (EVM) is its
computation engine that executes smart contracts. Ethereum allows developers to build
decentralized applications and is the basis for many web3 projects. Example: ERC-20
tokens, a standard for creating fungible tokens on Ethereum.

</details>

The Essence of Blockchain and Smart Contracts

Almost every interaction or transaction in our lives involves some form of agreement or contract.
For instance, purchasing a chair involves a contract to buy lumber, assemble it, and sell the
finished product. Your electricity supply is also based on an agreement between you and the
electric company. When you get an oil change for your car, you're promised a service in
exchange for money.

Almost everything we do in modern life relates to an agreement or contract in some way.

To make it more relatable, think of contracts and agreements as promises. Traditional contracts,
however, require trust between parties, and this doesn’t always work in favor of honesty and
fairness.

The Problem with Traditional Agreements

Lets consider some real world examples of where trust leverages agreements can go wrong
and why blockchain technology and smart contracts mitigates these risks.

Consumer Trust

In the 80s and 90s, McDonald’s Monopoly game promised customers a chance to win money
through game cards obtained with purchases. However, it turned out that the game was rigged
by insiders who manipulated the system for their gain. Essentially, McDonald’s failed to keep its
promise.
This example demonstrates that relying on trust within agreements can lead to fraudulent
activities and broken promises.

With smart contracts, we can eliminate the need for trust. A smart contract is an agreement or a
set of instructions that are deployed on a decentralized blockchain. Once deployed, it cannot be
altered, it automatically executes, and everyone can see its terms.

Imagine if McDonald’s Monopoly game was operated on a blockchain through a smart contract.
The fraudulent activities would have been impossible due to the immutable, decentralized, and
transparent nature of smart contracts.

Banking and Trust

Traditional banks have sometimes failed to keep the promise of safeguarding people's money,
as seen during the Great Depression. Blockchain and smart contracts can ensure transparency
and execute automated solvency checks, preventing the bank from becoming insolvent.

The core of blockchain and smart contracts lies in creating a trustless system where
agreements are transparent, unchangeable, and executed without human intervention. This
technology holds the potential to revolutionize industries and everyday agreements by ensuring
honesty and fairness.

Financial Markets Access

Centralized bodies, like traditional exchanges, have the power to restrict access to financial
markets. This was evident when Robinhood restricted trading on certain assets in 2021. With
decentralized exchanges like Uniswap, there is no central authority that can alter or limit market
access. This introduces fairness and openness to the financial markets.

To Summarize

●​ Traditional Agreements: Require trust in a centralized entity.

●​ Smart Contracts: Transparent, decentralized, and tamper-proof.

In a scenario where you have to choose, smart contracts are an obvious choice as they cannot
be manipulated or altered in anyone's favor.

Smart contracts are the solution to minimizing the reliance on trust based systems that have
historically failed us time and time again.

Under the Hood

Smart contracts are relatively new, but have already started transforming various markets. They
do this by representing 'promises' as code on the blockchain. This code is executed by a
decentralized collective, such that no single entity can alter the agreemeent in any way! The
agreement and it's terms are public knowledge and will automatically execute without human
intervention.

More industries are adopting smart contracts and blockchain due to the numerous advantages
they offer. This results in trust-minimized agreements or what can be simply termed as
unbreakable promises.

Beyond Trust Minimization

It is important to note that blockchain, smart contracts, and cryptocurrencies are not just about
trust-minimized agreements. They offer security benefits, uptime advantages, execution speed,
and much more.

Caution: Not All Are Equal

However, beware of platforms that claim to be decentralized but are not in practice. An example
from 2022 is the SBF's FTX platform. It presented itself as a Web3 platform, but was
essentially a traditional Web2 company using cryptocurrency without the benefits of smart
contracts.

As an emerging developer or user in this space, it's important to discern between legitimate
projects and those that aren't contributing to the ethos of Web3. I want you to be successful, but
I want you to be successful because you're creating value. Platforms like FTX were pretending
to bring value to the space and leeching value from it.

Key Features and Benefits

✅ Decentralization. Smart contracts operate on decentralized networks maintained by nodes,

which remove the need for central intermediaries

✅ Transparency and Flexibility. All transactions and contract executions on the blockchain
are visible to everyone, ensuring transparency and fairness. Additionally, pseudoanonimity
ensures that privacy is maintained, since accounts are not tied to real-life identities.

✅ Speed and Efficiency: Blockchain transactions are instant, unlike traditional bank transfers
that can take days or weeks to execute. This efficiency extends to financial settlements,
eliminating the need for clearing houses and reducing settlement times.

✅ Security and Immutability: Once deployed, smart contracts cannot be altered, ensuring
that the terms remain unchanged. Hacking a blockchain is extremely challenging due to its
decentralized nature, offering a more secure method for protecting information compared to
centralized systems.
✅ Reduced Counterparty Risk: Smart contracts remove the need for trust in intermediaries,
ensuring that agreements are executed as coded without the risk of human interference or
fraud.

Conclusion

Blockchain technology has revolutionized digital transactions and agreements. Bitcoin

introduced decentralized digital currency, Ethereum expanded it with smart contracts, and
Chainlink enhanced it with hybrid networks. These advancements challenge traditional finance,
offering secure, transparent, and efficient ways to manage and transfer wealth, leading to a new
era of trust-minimized agreements.

🧑‍💻 Test Yourself

📕 Describe briefly what are Bitcoin, Ethereum and Chainlink
📕 What are the key advantages of smart contracts over traditional financial systems?
1.​
2.​

Features of Smart Contracts

Smart contracts come with various features that distinguish them from traditional agreements.

Decentralization This is edited

The first feature is decentralization; smart contracts do not rely on any centralized intermediary.
Instead, they run on a blockchain which is maintained by thousands of individuals known as
node operators. It's the collective effort of these node operators running the smart contracts that
make the network decentralized. This aspect will be discussed more in-depth later.

Transparency and Flexibility

Transparency is inherent to blockchain networks. Since all node operators can see everything
happening on-chain, there is no room for unfair or hidden deals. This transparency ensures that
everyone has access to the same information and plays by the same rules.

It is important to note that this transparency does not necessarily compromise privacy.
Blockchain is pseudo-anonymous, meaning that your transactions are not directly tied to your
real-world identity.

Speed and Efficiency

Smart contracts and blockchain transactions are incredibly fast and efficient compared to
traditional banking systems. For example, bank transfers, especially international ones, can take
up to several weeks, whereas blockchain transactions happen almost instantly. This speed is
not only convenient but also allows for more efficient interactions between parties.
Security and Immutability

Once a smart contract is deployed, it cannot be altered or tampered with. This immutability
ensures that the terms of the contract are set in stone. This is a stark contrast to centralized
systems where a server or database can be hacked, and data can be altered. The decentralized
nature of blockchain makes hacking nearly impossible since an attacker would have to take
control of more than half the nodes, which is significantly more challenging than compromising a
single centralized server.

Additionally, the data on a blockchain is resilient. In a traditional system, if your computer and
backups fail, you lose all your data. In contrast, in a blockchain, your data is replicated across
thousands of nodes. Even if several nodes were to go down, your data would remain secure as
long as there is at least one copy of the blockchain.

Elimination of Counterparty Risk

Smart contracts eliminate the need for trust in transactions. Once a smart contract is deployed,
its terms cannot be changed. This means that parties cannot alter the agreement based on
greed or any other factors. This ensures that the agreement is enforced as originally intended.

In traditional systems, there is always a risk that the other party might not fulfill their end of the
bargain. With smart contracts, this risk is eliminated, and agreements are enforced
programmatically.

Applications of Smart Contracts

Smart contracts have given rise to new industries and revolutionized existing ones.

Decentralized Finance (DeFi)

DeFi, or Decentralized Finance, allows users to engage with financial markets without relying on
centralized intermediaries. With smart contracts, users have transparent access to financial
markets and can engage with sophisticated financial products efficiently and securely. We will
provide practical examples of how to build and interact with DeFi protocols in upcoming lessons.

Decentralized Autonomous Organizations (DAOs)

DAOs are governed entirely by smart contracts and operate in a decentralized manner. This
structure offers benefits such as transparent governance, efficient engagement, and clear rules.
DAOs are an evolution in politics and governance, and we will cover how to build and work with
DAOs in future lessons.

Non-Fungible Tokens (NFTs)

NFTs, or Non-Fungible Tokens, can be thought of as digital art or unique assets. NFTs have
created new avenues for artists and creators to monetize their work. We will also cover how to
create and interact with NFTs in this course.

Setting up Metamask for Ethereum Transactions

In this lesson, we will learn how to make a transaction on a test Ethereum blockchain using
Metamask, a popular cryptocurrency wallet.

Visiting Ethereum Website

●​ Go to the Ethereum website ethereum.org.

Understanding Blockchains

●​ We will make our first transaction on a test Ethereum blockchain.

●​ This process works the same across all EVM (Ethereum Virtual Machine) compatible
blockchains and layer 2 solutions like Arbitrum, Ethereum, ZK Sync, etc.
●​ EVM compatibility will be explained later.

Setting up Metamask Wallet

To set up a wallet, we really just need to follow these steps:

1.​ To send a transaction on EVM chains, set up a wallet. We'll use Metamask as it's one of
the most popular and easiest wallets to start with.
2.​ Go to Metamask.
3.​ Install the Metamask extension for your browser (e.g., Chrome, Firefox, or Brave).
4.​ Once installed, you’ll see the extension in the top-right corner of your browser.
5.​ Click "Get Started".
6.​ Select "Create a New Wallet".
7.​ Agree to help Metamask improve (optional).
8.​ Create a password. Make sure it’s secure.​
Note: This wallet will be for development purposes, so you may use a weaker password.
But never put real money into this wallet. Treat it as a real wallet to familiarize yourself
with good wallet safety.

Secret Recovery Phrase (Master Key)

Metamask is going to provide you with a secret recovery phrase. This is a series of 12 words
generated when you first set up Metamask. Ultimately this phrase will allow you to recover your
wallet and funds within, should you ever lose access.
This recovery phrase (sometimes referred to as a mnemonic) is your master key, so keep it
safe. Write it down, store it in a safe deposit box, or use a secure password manager. Some
even engrave their phrase on a metal plate.

Warning: If anyone gets access to your secret recovery phrase, they can access
and take all your funds. No one, including the Metamask team, can help you
recover your wallet if you lose the phrase.

1.​ Watch the Video offered by Metamask detailing how to keep your wallet secure.
2.​ Select "Secure My Wallet".
3.​ Write down your secret recovery phrase and save it securely.
4.​ Confirm by re-entering your phrase.
5.​ Click "Got it" after creating your wallet.

Note AGAIN: This wallet will be your development wallet do not add real funds!

Understanding the Metamask Interface

From this point, you should be able to see your metamask interface. It should look something
like this:

<img src="/blockchain-basics/05-first-transaction/first-transaction1.png" width="75%"

height="auto">

You can Pin Metamask to the top of your browser for easy access to this view in future.

A couple things to note:

1.​ In Metamask, you can create multiple accounts. Each account has a different address.
You can do this by selected Create Account from the menu in the top right.~~~~
2.​ All accounts created in Metamask share the same secret phrase but have different
private keys.​
Note: Access to the secret phrase grants control to all accounts, while access to a
private key only grants control to a single account.

Selecting a Network

Near the top of the Metamask interface, you’ll see “Ethereum Mainnet”. Click on it to see all the
networks that Metamask can access.

Ethereum Mainnet is a live blockchain where real money is used. For the purposes of this
course, we're not going to be working with Ethereum Mainnet. Instead, we'll be leveraging a
testnet, a development chain used for creating and testing smart contracts.

In addition to this, we'll also be covering how to test and deploy on a local chain, which we'll
quickly learn is the preferred way to test our code in most circumstances!
By toggling the show test networks option, we can see which testnets come included by
default.

<img src="/blockchain-basics/05-first-transaction/first-transaction2.png" width="75%"

height="auto">

We're able to switch networks simply by clicking on any network on the available list. Try out
Sepolia!

Do note - Testnets change often, they're run out of the goodness in people's hearts.
If a particular testnet is unavailable or changes, please checkout the course GitHub
repo or the section Updates area on Updraft for the latest testnet.

Just like Mainnets, testnets have blockexplorers available to us as well. We can navigate to
Sepolia Etherscan to see records of all the transactions that are happening on Sepolia.

First Transaction

In order to experience your first transaction, we're going to navigate to a faucet. Faucets are
services which allow you to claim some free testEth (in our case SepoliaEth) and use it in
development.

Sepolia Faucet

<img src="/blockchain-basics/05-first-transaction/first-transaction3.png" width="75%"

height="auto">

From this page you can connect your wallet with the click of a button. Once clicked, agree to the
terms of service and select Metamask.

<img src="/blockchain-basics/05-first-transaction/first-transaction4.png" width="75%"

height="auto">

Your Metamask should pop up and give you the option to select your account, following by a
confirmation to connect your wallet.

<img src="/blockchain-basics/05-first-transaction/first-transaction5.png" width="75%"

height="auto"> <img src="/blockchain-basics/05-first-transaction/first-transaction6.png"
width="75%" height="auto">

In order to request testnet native tokens (like SepoliaEth) you'll need to verify your GitHub
account. One that's done, you should be ready to send your request!

<img src="/blockchain-basics/05-first-transaction/first-transaction7.png" width="75%"

height="auto">
After a brief delay we should see something like this!

<img src="/blockchain-basics/05-first-transaction/first-transaction8.png" width="75%"

height="auto">

I encourage you to click the transaction hash, you'll be brought to Sepolia Etherscan and
provided a tonne of information about the details of your transaction. Additionally, you should be
able to open up your Metamask wallet and confirm you did indeed receive your requested
Sepolia Eth!

<img src="/blockchain-basics/05-first-transaction/first-transaction9.png" width="75%"

height="auto">

Try toggling your Metamask wallet between networks now, you'll notice that it's only on Sepolia
that you've gained your test ETH. If you want to practice further, there are additional testnet
blockchains with faucets available for you to try.

Transaction Details

Taking a brief look at some of the details of our transaction on Etherscan, we're given a lot of
insight. Understanding these properties is a fundamental part of being a blockchain developer.
Some of the basic details include:

●​ Transaction Hash - This is a unique idenfier for our transaction

●​ From - the originating address of the transaction request
●​ To - the address a transaction was sent to
●​ Value - any funds included with the transaction
●​ Gas - the cost of the transaction to execute, we'll be looking into gas more closely in the
next lesson.

<img src="/blockchain-basics/05-first-transaction/first-transaction10.png" width="75%"

height="auto">

Transaction Fee and Gas Price: What are they?

<img src="/blockchain-basics/06-intro-to-gas/intro-to-gas1.png" style="width: 100%; height:

auto;" alt="etherscan transaction">

While inspecting an Ethereum transaction, two terms invariably catch the glance: "transaction
fee" and "gas price". Let's clarify what they are and why they matter.

The transaction fee is the amount rewarded to the block producer for processing the
transaction. It is paid in Ether or GWei. The gas price, also defined in either Ether or GWei, is
the cost per unit of gas specified for the transaction. The higher the gas price, the greater the
chance of the transaction being included in a block.
 Gas price is not to be confused with gas. While gas refers to the computational
effort required to execute the transaction, gas price is the cost per unit of that effort.

When we click on "more details" in a transaction overview, we can see further information
including the gasLimit and Usage by transaction.

Now, let's address an important question: who gets these transaction fees and why?

The Role of Nodes in Blockchain

Blockchains are run by a group of different nodes, sometimes referred to as miners or

validators, depending on the network. These miners get incentivized for running the blockchain
by earning a fraction of the native blockchain currency for processing transactions. For instance,
Ethereum miners get paid in Ether, while those in Polygon get rewarded in MATIC, the native
token of Polygon. This remuneration encourages people to continue running these nodes.

Understanding Gas in Transactions

In the context of transactions, gas signifies a unit of computational complexity.

The higher a transaction's complexity, the more gas it requires. For instance, common
transactions like sending Ether are less complex and require relatively small amounts of gas.
However, more sophisticated transactions like minting an NFT, deploying a smart contract, or
depositing funds into a DeFi protocol, demand more gas due to their complexity.

The total transaction fee can be calculated by multiplying the gas used with the gas price in
Ether (not GWei). Therefore, Transaction fee = gasPrice * gasUsed.

Hands-on: Sending an Ethereum Transaction

In any blockchain, making a transaction requires the payment of a transaction fee (in terms of
the native token) to the blockchain nodes processing that transaction. Let's take an example of
a transaction using the MetaMask extension, a popular Ethereum wallet.

Here are the steps:

1.​ Open MetaMask and click "Expand View".

2.​ Choose the account to use for the transaction.
3.​ Click on "Send".
4.​ Select "Transfer between my accounts".
5.​ Enter the account to send the Ether to, and the amount you wish to send.
6.​ Click "Next". MetaMask will automatically calculate the gas fee for you. The total amount
to be paid is the sum of the Ether value you're sending and the gas fee.
Something of note, if you click the market link in Metamask, you'll be shown some optional
settings for gas in the transaction. You may wonder Why would I choose to spend more gas?

A simplified explanation of this is: if lots of people are trying to process transactions at the same
time, the space on a given block is competitive, gas prices are increased to throttle and prioritize
transactions during congestion.

1.​ Click "Confirm".

The transaction will now appear in the Activity tab of MetaMask. After a short while, the
transaction gets processed, and you can view its details in a block explorer like Etherscan.

You have now executed your first blockchain transaction!

Despite its simplicity, knowing how to process transactions with MetaMask is vital and
empowers you to interact with protocols on the Ethereum network and other blockchains.
However, to fully understand Ethereum and the blockchain landscape, it's crucial to delve into
the details behind these transactions and the fundamental mechanics of blockchains.

Remember, mastering the nuances of blockchain transactions and understanding the

mechanics behind Ethereum will enable you to become a powerful developer in the
decentralized world.

Understanding Hash Functions(https://andersbrownworth.com/blockchain/)

At its simplest, a hash is a unique, fixed-length string that serves to identify any piece of data.
When you input any kind of data into a hash function, it produces a hash. In this demo, the hash
algorithm we'll focus on is SHA-256.

<img src="/blockchain-basics/07-how-do-blockchains-work/how-do-blockchains-work1.png"
style="width: 100%; height: auto;">

If I add Patrick Collins to our SHA-256 algorithm, it will:

1.​ Convert the letters to numbers

2.​ Convert the numbers to a fixed-length “string” or “hash”

Patrick Collins gets converted to

7e5b5a1a6b80e2908b534dd5728a998173d502469c37121dd63fca283068077c

Ethereum, uses its own version of a hashing algorithm (Keccak256)that isn't exactly SHA-256
but belongs to the SHA family. This doesn't change things significantly here as we're primarily
concentrating on the concept of hashing.

In the application, whatever data you enter into the data section, undergoes processing by the
SHA-256 hash algorithm resulting in a unique hash.
 For example, when I input my name as "Patrick Collins," the resulting hash uniquely
represents "Patrick Collins." The fascinating aspect is, no matter how much data is
input, the length of the generated hash string remains constant.

Understanding Blocks

Now that we've grasped the concept of hashing and fixed-length string, let's inspect the
structure of a blockchain—a collection of "blocks."

<img src="/blockchain-basics/07-how-do-blockchains-work/how-do-blockchains-work2.png"
style="width: 100%; height: auto;">

A block takes the same data input, but instead of a singular data field, a block is divided into
'block', 'nonce', and 'data.' All three are then run through the hash algorithm, producing the hash
for that block. As a result, even a minor change in the data leads to an entirely different hash,
hence, invalidating the block.

In essence, mining involves the computational trial and error process of finding an acceptable
value to produce a hash which typically follows a certain pattern, such as starting with four
zeros. The value found, which satisfies this criterion, is known as the 'nonce'.

The problem or criteria a miner has to solve will vary from blockchain to blockchain, but the
concept is the same.

The Inherent Beauty of Blockchain: Immutability

In a blockchain, which is essentially a sequence of blocks, each block is comprised of the

previous elements - a block number, a nonce and data - as well as the hash of the
previous block

<img src="/blockchain-basics/07-how-do-blockchains-work/how-do-blockchains-work3.png"
style="width: 100%; height: auto;">

What this means in practice is that any changes to data, in any block of the chain, will invalidate
every proceeding block, until they are recalculated, or re-mined.

Genesis Block: This is the first block in a blockchain.

Decentralized Distribution

Now, if a single entity were to control the blockchain, they could conceivably change any data
they want, and then re-mine, or re-validate subsequent blocks. This is bad.

Enter Decentralized Distribution.

<img src="/blockchain-basics/07-how-do-blockchains-work/how-do-blockchains-work4.png"
style="width: 100%; height: auto;">

The crux of blockchain's power lies in its decentralization or distributed nature. Under this
system, multiple entities or "peers" run the blockchain technology, each holding equal weight
and power. In the event of disparity between the blockchains run by different peers (due to
tampering or otherwise), the majority hash wins, as the majority of the network agrees on it.

Nodes that don't agree with the majority effectively fork the network, continuing on their own
with their own history.

Interplay of Blockchain & Transactions

Until now we've been considering the data passed in a block to be a random string of text, but
the reality is - this data can be anything. In the token and coinbase sections of this demo you
can see how each block is comprised of a number of transactions that all get hashed together.
Any edits to any of these transactions is going to invalidate the chain!

<img src="/blockchain-basics/07-how-do-blockchains-work/how-do-blockchains-work5.png"
style="width: 100%; height: auto;">

Wrap Up

To summarize, every transaction, block, and indeed the whole blockchain itself comes down to
understanding the concept of a hash—this unique fixed-length string that is intrinsically linked
with the original data. We've also underscored the importance of decentralization and
highlighted how the concept of immutability plays into the system's security.

Public and Private Keys

(https://andersbrownworth.com/blockchain/public-private-keys/)

In this lesson, all the pieces we learnt about with Metamask should start coming together.

Understanding the relationship between private and public keys is essential to grasping the
concept of blockchain transactions. In essence, a private key is a randomly generated secret
key used to sign all transactions.

The private key is then passed through an algorithm (the Elliptic Curve Digital Signature
Algorithm for Ethereum and Bitcoin) to create the corresponding public key. Both the private
and public keys are central to the transaction process. However, while the private key must
remain secret, the public key needs to be accessible to everyone.

When we send a transaction to the blockchain, we're passing a private key - this allows others
to verify the transaction through the generated public key
<img src="/blockchain-basics/08-signing-transactions/signing-transactions1.png" width="100%"
height="auto" alt="signing-transactions1">

How does Transaction Signing Happen?

When we sign a transaction on the blockchain, we're digitally signing some data with our private
key. The hashing algorithm used makes it impossible for something to derive your private key
from a message signature.

<img src="/blockchain-basics/08-signing-transactions/signing-transactions2.png" width="100%"

height="auto" alt="signing-transactions2">

This signing method allows anyone to verify the validity of a transaction by comparing the
message signature to a user's public key!

<img src="/blockchain-basics/08-signing-transactions/signing-transactions3.png" width="100%"

height="auto" alt="signing-transactions3">

Importance of Hiding Private Keys

Your Metamask account's private key is accessible through Account Details > Show
Private Key. You'll be asked to provide a password, again underscoring the importance of
keeping this key safe.

Anyone with access to your private key can perform and sign transactions, on your behalf
consequently making it absolutely vital to safeguard private keys.

Note: As an interesting side note, wallet addresses, like the one Metamask
provided to you, are actually derived from your public key. A public key is passed
through the Ethereum Hashing Algorithm, the last 20 bytes of the resulting hash is
the address!

Wrap Up

Lets recap some of the things covered in this lesson.

We discovered that transactions on the blockchain are signed using a user's private key, the
generated message signature can then be verified by anyone through a comparison to a
user's public key.

KEEP YOUR PRIVATE KEY SECURE!

●​ Private Keys allow someone to sign a transaction, they should be kept secret and
secure.
We learnt that public keys are generated by using the Elliptic Curve Digital Signature
Algorithm on a user's private keys.

In addition to this, Ethereum addresses are derived from public keys by hashing a user's public
keys with the Keccak256 algorithm.

Transactions and Gas

In this lesson we're going to take a an even closer look at gas, how it functions and the purpose
it serves on the blockchain.

Don't stress if this topic sounds complex; gas can absolutely be a confusing topic, but the more
experience you gain and more examples we go through, it'll start to become clear.

Note: What we're covering here is applicable to Ethereum post implementation of EIP-1559
(https://www.youtube.com/watch?v=MGemhK9t44Q) wherein gas limits, priority fees and the
discussed burn mechanism were all introduced.

Transaction Breakdown

Before we continue, there are a couple important terms to understand.

Wei: 1,000,000,000 Wei = 1 Gwei (Gigawei)

Gwei: 1000,000,000 Gwei = 1 Eth

<img src="/blockchain-basics/09-gas-II/gas-II1.png" width="75%" height="auto">

Reference the above image, the labelled sections will be detailed below

1. Transaction Fee: This is calculated as Total Gas Used * Gas Price where Gas Used
represents the computational units required to perform the work and Gas Price is comprised
of a Base and Priority Fee

2. Gas Limit: This is the maximum amount of gas allowed for the transaction. This can be set
by the user prior to sending a transaction.

In Metamask, you can navigate to Market > Advanced > Edit Gas Limit in order to set
this value.

<img src="/blockchain-basics/09-gas-II/gas-II2.png" width="75%" height="auto">

3. Base Gas Fee: The base fee of a transaction, represented in Gwei. Remember, this is cost
per gas.

There are a couple important points to note regarding the Base Fee
 ●​ The fee is burnt as of EIP-1559. Burning serves to remove the value from circulation,
combating inflation on the protocol. The amount burnt can be seen beneath the Base
Fee in the image above.
●​ The fee is dynamic, under EIP-1559, if a block is more than 50% full, the Base Gas
Fee is increased for the next block. Likewise, if a block is less then 50% full, the fee
decreases. This serves to balance network demand and capacity.

4. Max Gas Fee: This is the maximum cost per cast the transaction has been configured to
allow. This can again be configured prior to sending a transaction.

5. Max Priority Fee: Again, configurable prior to sending a transaction, this represents the
maximum tip we're willing to give miners. This incentivizes the inclusion of our transaction
within a block.

6. Block Confirmations: These are he number of blocks which have been mined or validated
which have been confirmed to contain your transaction. The more confirmations the more sure
we can be of the transaction's validity.

Wrap Up

Lets recap some of what we've learnt about transactions on the blockchain!

We learnt that every transaction has a unique transaction hash that uniquely identifies the
transaction on chain.

Pulling up a transaction in a block explorer like Etherscan can provide us a tonne of additional
information, including:

●​ The block which contains the transaction

●​ The time stamp of when the transaction was requested
●​ Where the transaction is originating
●​ Where the transaction is being sent
●​ The value included in a transaction

From here we can also see details about the transactions fees and gas costs.

Gas is a measure of computation required to perform a task, the cost of a transaction is derived
from a Gas Price (made of Base and Priority Fees) and the amount of gas used.

We learnt that a Gas Limit can be set before a transaction is set and that the Base Fee on
all Ethereum transactions is actually burnt, in order to reduce inflation and stabilize the
network economy.
We also discovered that the Base Fee goes up and down depending on the congestion of a
block. If a block is >50% full, the fee goes up, <50% and the fee goes down.

Traditional Networks vs Blockchain

Traditionally, when you run an application be it a website or something that connects to a server
you are interacting with a centralized entity. This is the opposite of what you may recall from our
distributed blockchain example, in that the server is controlled and run by a single centralized
group.

Blockchains, as we saw, run on a network of independent nodes. In our previous example, each
of the Peers was representative of an independent node operator. The term node typically
refers to a single instance of a decentralized system, Peer A would be a node. This network,
this combination of these nodes interacting with each other is what creates a blockchain. What
makes these networks so potent, is that anybody can join. All anyone needs is a little bit a
hardward and you can participate in securing a blockchain network. You could go to GitHub and
start operating a node in a few seconds!

In the traditional world applications are run by centralized entities and if that entity goes down or
is malicious or decides that they want to shut off - they just can. They're the ones that control
everything.

Blockchains, by contrast, don't have this problem. If one node or one entity that runs several
nodes goes down, since there are so many other independent nodes running, it doesn't matter,
the blockchain and the system will persist so long as there is at least one node always running.
Luckily for us, the most popular chains like Bitcoin and ethereum have thousands and
thousands of nodes. Malicious nodes are kicked from the network, or even punished in some
cases. Majority rules when it comes to the blockchain.

This gives blockchains this incredibly potent immutability trait where nothing can be changed or
corrupted so in essence we can think of a blockchain as a decentralized database. In the case
of Ethereum it has an extra additional feature where it also can do computation in a
decentralized manner now.

Consensus

Let's talk consensus. This includes Proof of Work and Proof of Stake. You've probably
heard these terms before and they're really important to how these blockchains work.

The mining feature of our previous blockchain example was an example of Proof of Work

Proof of Work and Proof of Stake fall under this umbrella of consensus and
consensus is a really important topic when it comes to blockchains.
 Consensus is defined as the mechanism used to reach an agreement on the state
or a single value on the blockchain especially in a decentralized system.

Very roughly, a consensus protocol in a blockchain or decentralized system can be broken down
into two pieces a chain selection algorithm and a sybil resistance mechanism. Mining, or Proof
of Work, is a sybil resistance mechanism. This is what Bitcoin currently uses.

Proof of Work is known as a sybil resistance mechanism because it defines a way to figure
out who is the block author or which node did the work to mine a block. Sybil resistance is a
blockchain's ability to defend against users creating a large number of pseudo-anonymous
identities to gain a disproportionately advantageous influence over said system.

As mentioned, there are two primary types of sybil resistance:

●​ Proof of Work
●​ Proof of Stake

We'll look a little closer at Proof of Work first.

Proof of Work

Proof of work is a system of sybil resistance used in many blockchains, in its essence a miner
needs to go through a very computationally heavy process (mining) to find the block's answer.
As a result, it doesn't matter how many additional nodes you're running, each node is obligated
to do this work in order to receive a reward. The playing field is kept fair.

Note: Some blockchains may make their riddle or their block answer intentionally
hard, or intentionally easy to adjust the block time - which is the average time it
takes to mine a block. Blocktime is proportional to how difficult these algorithms are.

Proof of Work needs to be combined with a chain selection rule to create consensus.

A chain selection rule is implemented as a means to determine which blockchain is the

real blockchain. Bitcoin (and prior to the merge, Ethereum), both use something called
Nakomoto Consensus. This is a combination of Proof of Work (Etherum has since switched to
Proof of Stake) and the longest chain rule.

In the longest chain rule, the decentralized network decides that whichever chain has the
most number of blocks will be the valid, or real blockchain. When we saw block
confirmations in Etherscan earlier, this was representing the number of blocks ahead of our
transaction in the longest chain.
 You'll sometimes hear people use Proof of Work to describe a consensus
mechanism, but it's a little bit inaccurate, it's really the combination of sybil
resistance and chain selection that create consensus

Proof of Work also serves as a means to determine who receives transaction fees as we
discussed earlier. These transaction fees are paid by whomever initiates the transaction. In a
Proof of Work system, every node is competing against eachother to solve the block problem
first. The first node to solve the problem gets paid the transaction fees accumulated in the block
they mine. In addition to this, miners are also paid a block reward, the block reward is
given by the blockchain itself.

If you've previously heard of the Bitcoin Halving - this is the concept of the block
reward being cut in half roughly every 4 years.

Block rewards are in the blockchains native currency - Bitcoin = BTC, Ethereum = ETH. This
effectively increases the amount of that cryptocurrency in circulation.

Blockchain Attacks

There are two major types of attacks that exist in the blockchain space.

●​ Sybil Attack - When a user creates a number of pseudo-anonymous accounts to try to

influence a network.
●​ 51% attack - Occurs when a single entity possesses both the longest chain and majority
network control. This would allow the entity to fork the chain and bring the network onto
the entities record of events, effectively allowing them to validate anything.

Blockchains are very democratic. The bigger a blockchain is, the more decentralized, the more
secure it becomes.

I encourage you to look into running a node yourself to increase the security of the network!

Proof of Work does come with drawbacks. For example, Proof of Work consumes a LOT of
electricity. When you have thousands of nodes all working as hard as they can to solve a block
problem the energy consumption is HUGE and as such, so is the potential environmental
impact.

With the above in mind, many protocols are choosing the shift to a different consensus
mechanism that is more environmentally friendly. The most popular of which is...

Proof of Stake

In contrast to trying to solve a block problem, Proof of Stake nodes put up some collateral that
they are going to behave honestly aka they stake. If a node is found to be misbehaving, it's
stake is slashed. This serves as a very effective sybil resistance mechanism because for each
account, the validator needs to put up more stake and misbehaving risks losing all that
collateral.

In a Proof of Stake system, miners are known as validators. They aren't

actually mining blocks, they're validating other nodes.

Unlike in Proof of Work, where each node is racing to solve the block problem first, in Proof of
Stake, validators are pseudo-randomly chosen to propose the next block and other nodes will
validate it.

Proof of Stake of course comes with its own Pros and Cons.

Pros:

●​ great sybil resistance mechanism

●​ great for the environment, much less energy

Cons:

●​ seen as less decentralized due to upfront staking costs

This raises the question of how decentralized is decentralized enough? and I think I need to
leave that to the community to decide.

Layer 1 and Layer 2

I want to briefly touch on the concepts of Layer 1 and Layer 2 networks here as well.

1.​ Layer 1 solutions: This refers to base layer blockchain implementations like Bitcoin or
Ethereum.
2.​ Layer 2 solutions: These are applications added on top of a layer one, like Chainlink or
Arbitrum.

Layer 2s like Arbitrum and Optimism are special in that they're trying to solve the problem of
scalability. These protocols leverage something called rollups. We won't go too deep, but the
idea is that the protocols bundle their transactions to be processed by a Layer 1.

Introduction

In this course, we've briefly mentioned several key terms: Layer 1 (L1), Layer 2 (L2), and
Rollups. Throughout this course, we will deploy and interact with smart contracts on Sepolia, a
Layer 1 test net, and zkSync Sepolia, a Layer 2 Rollup.

Blockchain layers
A Layer 1 (L1) blockchain is the base layer of the blockchain ecosystem, where nodes help the
chain to reach consensus. It operates without any additional plugins and is often referred to as
the settlement layer. Examples of L1 chains include Bitcoin, BNB Chain, Solana, and
Avalanche. In this course, we primarily focus on Ethereum, which serves as the hub of the
Ethereum ecosystem. Applications directly deployed on Ethereum, like Uniswap, are not
considered L2s but rather dApps on L1.

A Layer 2 is any application built on outside an L1 blockchain that hooks back into it. There are
different types of Layer 2, for example Chainlink, a decentralized Oracle networks and event
indexing networks like The Graph, which enable applications to access on-chain data. But the
most popular type of L2 is the rollup, or L2 chain.

Rollups

Rollups are L2 scaling solutions that enable to increase the number of transactions on
Ethereum by bundling multiple transactions into one, reducing gas costs.

<img src="/blockchain-basics/15-l1s-l2s-and-rollups/tx-bundle.png" width="100%" height="auto"

/>

Rollups help solve the blockchain trilemma, which states that a blockchain can only achieve two
out of three properties: decentralization, security, and scalability. In the case of Ethereum,
scalability is sacrificed as it can only process approximately 15 transactions per second.
Rollups, on the other hand, aim to enhance scalability without compromising security or
decentralization.

<img src="/blockchain-basics/15-l1s-l2s-and-rollups/bc-trilemma.png" width="100%"

height="auto" />

How Rollups Work

When a user submits a transaction to a rollup, an operator (a node or entity responsible for
processing transactions) picks it up, bundles it with other transactions, compresses them, and
submits the batch back to the L1 blockchain. This process allows for efficient handling of
transactions as gas costs associated with the transaction, are split among all the users that
submitted the transactions in the batch.

There are two types of rollups, Optimistic and Zero-Knowledge rollups. The main difference
between the two lies in how each rollup verifies the validity of the transactions.

Optimistic Rollups

They assume that off-chain transactions are valid by default. Operators propose the valid state
of the rollup chain, and during a challenge period, other operators can challenge potentially
fraudulent transactions by computing a fraud proof.
This fraud proof process involves the operator engaging in a call and response interaction with
another operator to identify and isolate a specific computational step. This specific step is then
executed on the Layer 1 blockchain: if the result differs from the original state, it indicates that
the transaction was fraudulent. When the fraud proof succeeds, the rollup will re-execute the
entire batch of transactions correctly, and the operator responsible for including the incorrect
transaction will be penalized, usually by losing staked tokens (slashing).

Zero-Knowledge (ZK) Rollups

ZK rollups use validity proofs, known as zk proofs, to verify transaction batches. In this process,
the prover (operator) generates a zk proof to show that their inputs (the transactions) satisfy
this equation. A verifier (an L1 contract) then checks this proof to ensure that the output
matches the expected result. The solution that the prover uses to demostrate that their input
satisfies the mathematical equation in the zk proof is commonly referred as the witness.

Conclusion

Rollups enhance Ethereum's scalability by processing transactions off-chain, bundling them,

and submitting them back to Ethereum with validity proofs. This method maintains the security
and decentralization of L1 while significantly increasing transaction throughput.

🧑‍💻 Test yourself

📕 What is the primary function of a Layer 2 blockchain?
📕 How do optimistic rollups ensure the validity of transactions?
1.​

📕 What is commonly referred as the witness?

2.​
3.​

Introduction

In blockchain and cryptocurrency networks, the role of a sequencer is crucial for ordering and
bundling transactions. Sequencers are operators that are responsible for organizing how
transactions are processed. In many roll-up solutions, sequencers are centralized, controlled by
a single entity.

Centralization risks

Censorship and Manipulation. Centralized sequencers have the power to selectively block or
delay specific transactions. For example, users might experience blocked withdrawal
transactions, preventing them from accessing their funds. Additionally, centralized control
enables the manipulation of transaction order for personal gain.

Operational Downtime. If a centralized sequencer experiences downtime, all transaction

processing can halt. This means no transactions, including withdrawals, can be processed until
the sequencer is back online.
To mitigate the issues associated with centralized sequencers, projects like zkSync are working
towards decentralizing their sequencer operations, distributing control among multiple entities or
nodes.

Conclusion

The centralization of sequencers in blockchain networks poses significant risks, including

censorship, transaction manipulation, and operational downtime. Efforts to decentralize
sequencers, such as those by zkSync, are crucial for enhancing the security, fairness, and
reliability of these networks.

🧑‍💻 Test yourself

1.​ 📕 Explain what are the primary risks associated with centralized sequencers.

Introduction

A Layer 2 (L2) chains maturity is evaluated based on specific properties and categorized into
stages. The L2B team provides an opinionated assessment to encourage a progression
towards a greater decentralization.

Rollup Stages

1.​ Stage 0: In this initial stage, the rollup's governance is largely in the hands of the
operators and a security council, ensuring that critical decisions and actions are
overseen by a trusted group. The open-source software allows for the reconstruction of
the state from L1 data, ensuring transparency and accessibility. Users in this stage have
an exit mechanism that allows them to leave the rollup within seven days. However, this
often requires actions from an entity/operator.
2.​ Stage 1: In this stage, governance evolves to be managed by smart contracts, although
the security council still plays an important role (e.g. solving bugs). At this stage, the
proof system becomes fully functional, enabling decentralized submission of validity
proofs. The exit mechanism is improved, allowing users to exit independently without
needing operator coordination.
3.​ Stage 2: In this final stage, the rollup achieves full decentralization with governance
entirely managed by smart contracts, removing the need for operators or council
interventions in everyday operations. The proof system at this stage is permissionless
and the exit mechanism is also fully decentralized. The security council's role is now
strictly limited to addressing any errors that occur on-chain, ensuring that the system
remains fair without being overly reliant on centralized entities.

ZKSync Risk Analysis

In the L2Beat summary it's possible to see the actual stage of each rollup:

<img src="/blockchain-basics/17-rollup-stages/l2beat-summary.png" width="100%"

height="auto" />

Currently, Zksync Era is operating as a Stage 0 rollup. In the dedicated page on L2, we can
find a risk analysis:

●​ Data Availability: refers to the ability to reconstruct the L2 state from L1 data, ensuring
that anyone can verify and rebuild the L2 state if necessary.
●​ State Validation: involves verifying the legitimacy of a set of bundled transactions. For
ZK Sync, this is done using zero-knowledge proofs through an algorithm known as
PLONK (Permutations over Lagrange-bases for Oecumenical Noninteractive arguments
of Knowledge).
●​ Sequencer Failure: describes the ability to process transactions even if the sequencer
is down. In ZK Sync, transactions can still be submitted to L1, though not necessarily

🗒️
enforced immediately.​
NOTE​
The sequencer is the operator responsible for ordering user transactions and often
batching them before committing them to Layer 1.
●​ Proposer Failure: describes the ability to process transactions even if the proposer is
down. In this case, ZK Sync will halt all withdrawals and transactions executions.
●​ Exit Window: In the current ZK Sync stage, there is no window for exit during unwanted
upgrades.

Conclusion

The stages of rollups provide a framework for assessing and encouraging the maturity and
decentralization of L2 chains. Understanding these stages and their requirements is crucial for
evaluating the progress and risks associated with different rollups.

🧑‍💻 Test Yourself

1.​ 📕 What are the main differences between Stage 0, 1 and 2 rollups in terms of
2.​ 📕 Describe the parts that constitute a risk analysis for a Layer 2 solution.
governance and exit mechanisms?

Adding zkSync Sepolia to MetaMask

1.​ Add the Network: search for "zkSync Sepolia Testnet" on Chainlist, connect it to your
wallet, and add the network by following the confirmation dialogs. Ensure testnets are
included in your search.
2.​ Check Balance: you can view your Sepolia balance on MetaMask or on zkSync Era
Sepolia Block Explorer. To view your account summary you can copy your MetaMask
address and paste it into the Block Explorer.
Bridging Funds

Our first transaction involves receiving funds. There are two ways to receive funds on zkSync:

1.​ Using a Faucet: This method requires the use of APIs or GitHub sign-in.
2.​ Bridging: Our reommended method, that involves transfering funds from one chain
(Sepolia) to another (zkSync Sepolia). There are two types of bridging mechanisms:
○​ Locking and Unlocking: Tokens are locked on the source chain and unlocked
on the destination chain.​
<img
src="/blockchain-basics/18-making-your-first-transaction-on-zksync/lock-unlock.p
ng" width="100%" height="auto" />
○​ Minting and Burning: Tokens are burned on the source chain and minted on the
destination chain. The bridge protocol must control the token supply to manage
this process. An example is CCTV by the Circle team, where USDC is burned
and minted to facilitate bridging.​
<img
src="/blockchain-basics/18-making-your-first-transaction-on-zksync/burn-mint.pn
g" width="100%" height="auto" />
3.​ Get Sepolia ETH: Use the recommended faucet to obtain Sepolia ETH. With 0.05
Sepolia ETH, you're ready to transfer to zkSync Sepolia.
○​ Note: If you encounter a message requiring 0.001 ETH on the mainnet, wait
10-20 minutes before trying again.
4.​ Use the zkSync Bridge: Visit the zkSync bridge and ensure you are on the testnet.
Connect MetaMask to the bridge and confirm a transaction (e.g., 0.025 Sepolia ETH).
5.​ Verify the Transaction: Check the transaction on the zkSync Sepolia block explorer by
pasting your wallet address into the search bar to see the transaction details and status.
○​ Transaction Status: Once processed, you can view the transaction information,
including its status.
○​ Finality: As per the zkSync documentation on finality, this term refers to the time
from sending the transaction to when it is considered settled. On Ethereum, this
takes about 13 minutes, but on zkSync it can take approximately 24 hours.
During this period, transactions are displayed instantly in the UI and can be
further transferred, but full finality should be awaited to ensure they are fully
received and validated using ZK proofs.

Conclusion

In this lesson, we explored how to make a transaction to transfer funds on the zkSync testnet.
We began by adding zkSync Sepolia to MetaMask, we bridged funds to zkSync Sepolia and we
discussed two methods for receiving funds: using a faucet and bridging. For bridging, we
covered the mechanisms of locking and unlocking, as well as minting and burning tokens. We
obtained Sepolia ETH from a recommended faucet and used the official zkSync bridge to
transfer the funds.