Web3 Operation

Wallet Key Concepts

Mnemonic Phrase (Seed Phrase)

  • A human-readable list of words used to generate private keys
  • Usually 12 or 24 words (BIP-39 standard)
  • Acts as the master backup of a wallet
  • Anyone with it can fully control the wallet

Private Key

  • A secret cryptographic number
  • Used to sign transactions and prove ownership
  • Derived from the mnemonic phrase
  • Must never be shared

Public Key

  • Generated from the private key
  • Used to verify transaction signatures
  • Safe to share publicly
  • Cannot be reversed to get the private key

Wallet Address

  • Derived from the public key
  • Used to receive assets on the blockchain
  • Public and shareable
  • Example (Ethereum): 0x...

Relationship

  • Mnemonic Phrase → Private Key → Public Key → Wallet Address

From Wallet Transaction to Block Confirmation: Complete Flow

1. Transaction Creation (Wallet Side)

  1. User initiates a transaction in the wallet

    • Example: Alice wants to send 1 ETH to Bob
    • Wallet generates a transaction object:
      1
      2
      3
      4
      5
      6
      7
      8
      {
        "from": "AliceAddress",
        "to": "BobAddress",
        "value": 1 ETH,
        "nonce": 5,
        "gasLimit": 21000,
        "gasPrice": 50 Gwei
      }
    • nonce: sequence number to prevent replay attacks
    • gas: transaction fee to compensate miners/validators

  2. Wallet signs the transaction with the private key

    • Ensures the transaction is authorized by Alice
    • Anyone can verify the signature but cannot forge it

2. Transaction Broadcasting

  1. Wallet broadcasts the signed transaction to the blockchain network (P2P network)
  2. Nodes receive the transaction and place it in the mempool (pending transaction pool)
    • Transactions in mempool are waiting to be included in a block
  3. At this stage, the transaction is not yet part of any block

3. Transaction Validation (Nodes / Miners / Validators)

Before packaging into a block, transactions are validated:

  1. Signature verification → confirms the transaction is from Alice
  2. Sufficient balance → Alice has enough ETH + gas
  3. Nonce correctness → prevents duplicate transactions

✅ Only valid transactions are eligible to be included in a block

4. Block Packaging

  1. Miner/validator selects transactions from the mempool
    • Usually prioritizes transactions with higher gas fees
  2. Creates a new block:
    • Contains a list of transactions
    • Includes previous block hash
    • Constructs a block header:
      1
      2
      3
      4
      5
      Block N+1
        - PreviousHash: hash(Block N)
        - MerkleRoot: hash(all transactions)
        - Timestamp: 1673779200
        - Nonce: ??? (used in PoW)
  3. Essentially, the block organizes transactions into a structured format ready for consensus

5. Consensus Phase

Different blockchains use different consensus mechanisms:

a. Proof of Work (PoW, e.g., Bitcoin)

  • Miner performs work computation
  • Tries different Nonce values to find a hash below the target
  • Successfully mined block is broadcast to the network

b. Proof of Stake (PoS, e.g., Ethereum 2.0)

  • Validator is selected as block proposer
  • Verifies transaction validity
  • Signs the block and broadcasts it
  • Other validators vote to finalize the block

Core idea: global agreement on which block is accepted

6. Block Confirmation (On-chain)

  1. Nodes receive the new block and re-verify transactions and block integrity
  2. Updates local ledger/state
  3. Block is appended to the blockchain
    • Links to previous block hash
    • Transactions in this block are now confirmed
  4. Wallet can check transaction status:
    • “Pending” → “Confirmed after 1/2/3 blocks”
    • Confirmed transactions are immutable

7. Summary Flow Diagram (Text Version)

1
2
3
4
5
6
7
8
9
10
11
Wallet creates & signs transaction
         ↓
Broadcast to network (mempool)
         ↓
Nodes/Miners validate transactions
         ↓
Transactions packaged into new block
         ↓
Consensus mechanism confirms the block
         ↓
Block appended to blockchain, transaction complete

Wallet, Node, RPC, and Blockchain Network

1. Wallet

  • Manages private keys, public keys, and addresses
  • Functions:
    • Sign transactions
    • Query balances and transaction status
    • Interact with blockchain via nodes
  • Does not store the blockchain or validate transactions

2. Node

  • Computer in the blockchain network holding ledger/state
  • Functions:
    • Validate transactions and blocks
    • Store blockchain data
    • Provide RPC interface for wallets and apps

3. RPC (Remote Procedure Call)

  • Interface to interact with nodes remotely
  • Functions:
    • Query account balance
    • Broadcast signed transactions
    • Retrieve block or transaction info
  • Protocols:
    • HTTP / HTTPS (JSON-RPC)
    • WebSocket (for real-time events)

4. Blockchain Network

  • P2P network of nodes
  • Nodes sync blocks and transactions
  • Wallet accesses the network indirectly via node RPC

5. Wallet-Node-Network Connection

Wallet (UI + Private Key)
         |
         | RPC/API call
         v
Node (Full / Light / Hosted)
         |
         | P2P network sync
         v
Blockchain Network