sincethefirstblock

We have described how consensus allows a system to decide
which transactions enter the chain
and how a shared state is maintained over time.

That architecture brings clear benefits.

It also introduces constraints
that follow directly from the same design.

Understanding those constraints is necessary
to understand when blockchain systems
are suitable to use and when they are not.
1. Transaction and validation time
In a blockchain system, a transaction is not completed
when it is first submitted.
It must be propagated across the network, independently verified,
and included in a block that becomes part of the shared history.

This process exists because the system prioritizes
agreement and consistency across multiple participants,
not immediate execution.

Why this matters:Delays are not a failure of the system.They are the visible cost of distributed validation.This explains why blockchain interactionsoften feel slower than those in traditional systems.
2. Security depends on key control
Blockchain systems do not protect identities.
They protect cryptographic authority.

If a private key or seed phrase
is compromised, the system cannot distinguish
between legitimate and illegitimate use.

There is no native mechanism to block access
or reverse actions implicitly.

Why this matters:Security shifts from institutions to key management.Once control is lost, the system cannot interveneunless a new transaction explicitly does so.This significantly raises the cost of mistakes and misuse.
3. Transactions cannot be modified
Once a transaction is finalized,
it becomes part of the immutable record.

Past state is never edited.
Corrections are applied by adding new state on top of the existing one.

Why this matters:Error correction is explicit, not discretionary.This property follows directly from how validation and authorityare structured.
4. Applications are single-objective by nature
Blockchains are designed to enforce specific rules over shared state.

They are not general-purpose systems optimized for flexibility.
Applications tend to focus
on a narrow objective with clearly defined execution paths.

Why this matters:Precision is favored over adaptability.This limits what applications can do,but strengthens what they are designed to guarantee.
5. Development is structurally complex
Building on blockchain systems requires understanding
cryptography, state management, and deterministic execution.

Errors are not easily corrected
once code is deployed.

Why this matters:Development is slower and more demanding than in traditional environments.The cost of insufficient understanding is significantly higher.
6. No intermediaries, no safety net
Without intermediaries, there is no entity
that can pause, override, or arbitrate system behavior.

Responsibility is carried directly by the participant.

Why this matters:The absence of mediation creates a sense of exposure.Users interact directly with the system without implicit protection.
7. Friction emerges from unfamiliar models
Blockchain systems introduce concepts
that differ from established digital practices.

Key custody, finality, and irreversible actions
require different operational assumptions.

Why this matters:Even when the system functions correctly,interaction is more complex.Adoption is affected by that complexity,not by technical failure.
8. Regulation assumes intermediated systems
Most regulatory frameworks are built around custody,
central operators, and reversible control.

Decentralized systems
do not align cleanly with these assumptions.

Why this matters:Regulatory integration is slow and uneven.New legal structures are requiredto accommodate this architecture.
Final reflection
Blockchain systems do not remove trade-offs.
They make them explicit.

Distributed validation introduces time.
Self-custody introduces responsibility.

These limitations are not accidental.
They emerge from the same foundation
that produces the system’s guarantees.

This is the eighth block.
We start from the first block.
And we build from there.

#blockchain
#Infrastructure
#sinceTheFirstBlock

Earlier in this series,
we described what happens when a transaction enters the system.
It is received by the network,
validated, and eventually reflected in a shared state.

That process already relies on something fundamental.
Multiple independent participants must agree on the same outcome.
That agreement
is what keeps the system coherentas it evolves over time.
1. Consensus
Blockchain systems maintain a shared and consistent state.
For that to happen, participants agree on:
Which transactions are validThe order in which they are appliedThe resulting system state
This agreement is continuous
and takes place as the system progresses block by block.
Why this matters:

The shared state of the system

exists only as long as

this agreement holds.
2. Proof of Work
One way to reach agreement is through Proof of Work.
In this model:
Participants compete to propose the next valid updateProducing that update requires computational workAltering past states becomes increasingly costly
Bitcoin uses Proof of Work
to maintain agreement over its transaction history.
Why this matters:The cost of changing the systemis tied to work already performed,making past states difficult to modify.
3. Proof of Stake
Another approach to agreement is Proof of Stake.
In this model:
Participants commit capital to take part in validationProposing or validating updates depends on that stakeIncorrect behavior can lead to economic penalties
Ethereum uses Proof of Stake
to maintain agreement over its shared state.
Why this matters:

Security is enforced

through capital at risk,

allowing the system

to coordinate differently at scale.
4. Different objectives, different behavior
Both Proof of Work and Proof of Stake
aim to reach agreement on a single system state.

They differ in how that agreement is enforced.

Proof of Work emphasizes:
Resistance to historical modificationCost imposed through computation
Proof of Stake emphasizes:
Security based on committed capitalMore efficient coordination and faster finalization
These choices shape how each system behaves over time.
Why this matters:

The consensus model influences

security, cost, and performance

throughout the system.
5. Other consensus approaches
Proof of Work and Proof of Stake are not the only ways to reach agreement.
Other models exist:
Byzantine fault-tolerant approachesHybrid mechanismsPermissioned consensus systems
Different environments
require different assumptions and design choices.
Why this matters:

Consensus is a design space

with multiple valid approaches.
Final reflection
Consensus defines
how a distributed system agrees on a shared reality.

Once that mechanism is chosen,
the system’s properties largely follow from it.

Execution, cost, performance, and limitations
emerge from that foundation.

This is the seventh block.
We start from the first block.
And we build from there.

#blockchain
#Infrastructure
#sinceTheFirstBlock

In the previous block,
we looked at how blockchain systems
are already used in practice,
through concrete applications and real examples.

Those systems do more than record information.
They transfer value,
update ownership,
and coordinate activity
across shared infrastructure.

So what happens
when conditions are met
and the system needs to act?
1. From shared records to actions
Blockchain systems maintain
a shared and consistent state.

Transactions update balances.
Ownership changes are recorded.
The system moves forward block by block.

But many applications require
more than recording what happened.

They require actions to occur
when specific conditions are met.
Why this matters:A shared record is only part of the system.Many real-world processes dependon conditional execution.
2. What are smart contracts
Smart contracts are programs
stored and executed on a blockchain network.

They define:
ConditionsRulesAnd resulting actions
Once deployed,

their logic becomes part of the system state.

Execution is performed by the network itself,

under the same rules for all participants.
Why this matters:

Execution does not depend

on a central operator

or discretionary approval.
3. How smart contracts operate
At a high level, smart contracts:
Read the current system stateEvaluate predefined conditionsApply deterministic logicUpdate the ledger accordingly
The same inputs
produce the same outputs.

Execution does not change

based on who triggers the contract

or when it is triggered.
Why this matters:

Outcomes are predictable

and can be verified independently.
4. Why this execution model exists
As systems grow,
manual coordination becomes inefficient.

Shared infrastructure requires:
Consistent behaviorRepeatable outcomesVerifiable execution
Smart contracts embed execution rules
directly into the shared system,

removing the need for manual enforcement.
Why this matters:

Coordination can scale

without increasing operational complexity.
5. Where this model is used
Today, smart contracts are executed
millions of times per day
across blockchain networks.

They are used to:
Move value conditionallyCoordinate multi-step processesEnforce predefined constraints
This model supports systems
that operate continuously
across different jurisdictions.
Why this matters:

Execution logic remains consistenteven as participation scales globally.
Final reflection
Smart contracts do not change
what blockchain systems are.

They extend what those systems can do.
By combining:
Shared stateVerifiable historyAnd deterministic execution
they enable more complex systems
— such as decentralized applications
and financial protocols —
to operate on top of the same infrastructure
without manual coordination.

This is the sixth block.

We start from the first block.
And we build from there.

#blockchain
#Infrastructure
#sinceTheFirstBlock