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

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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:

     {
       "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

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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

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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

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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:

     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

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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

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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

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7. Summary Flow Diagram (Text Version)

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

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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