Session 2: Planting the Seeds - Web3 Fundamentals & Understanding Lisk

Session Date: October 15, 2025 | 19:30 - 21:00 (GMT+7)

Learn the basics of Web3 and Lisk. Understand how the blockchain works, why Lisk matters, and the key concepts like wallets, gas, and transactions. This session prepares the soil for everything you'll build.

Part 1: The Evolution of the Internet

Web1 vs Web2 vs Web3

Understanding where we are requires understanding where we've been. Let's explore the evolution of the web:

Comparative Overview

Aspect	Web1	Web2	Web3
Time Period	1990-2005	2005-Present	? (Emerging)
Features	Read-Only	Read, Write	Read, Write, Own
Protocol	Open	Closed	Open
Value	A Few Builders And Users	A Few Large Corporations	Users
Issues	Limited Functionality	Centralized, No Ownership	? (Being solved)

Web1: The Read-Only Era (1990-2005)

The early internet was like a digital library:

Static websites with limited interactivity
Users could only consume information
Built on open protocols (HTTP, HTML)
Run by a few builders and early adopters

Example: Think of early websites like newspapers online - you could read them, but not interact.

Web2: The Interactive Era (2005-Present)

The internet became a platform for participation:

Social media and user-generated content
Users can read AND write (post, comment, share)
Dominated by large corporations (Facebook, Google, Amazon)
Centralized control over data and content
You create content, but platforms own it

Example: Facebook, YouTube, Twitter - you create content, but the platform controls it, monetizes it, and can remove it.

Web3: The Ownership Era (Emerging Now)

The internet is becoming user-owned:

Users can read, write, AND own
Built on open protocols and blockchain
Decentralized control - no single authority
Value accrues to users and creators
You own your data, content, and digital assets

Example: NFTs you create are truly yours, tokens you earn are in your wallet, and your identity is self-sovereign.

Part 2: Understanding Blockchain

Blockchain is the foundational technology that makes Web3 possible.

What is Blockchain?

Definition: A blockchain is a distributed ledger - a list of records stored in "blocks" of data, where each block is chained together with its previous block.

Block 1 → Block 2 → Block 3 → ... → Block N
[Header]   [Header]   [Header]         [Header]
[Txs   ]   [Txs   ]   [Txs   ]         [Txs   ]

Core Concepts

List of Records Stored in "Blocks" of Data
- Each block contains multiple transactions
- Blocks have a fixed size limit
- New blocks are created at regular intervals
Each Block is Chained Together
- Every block references the previous block
- This creates an immutable chain
- Changing old data breaks the chain
A Series of Transactions
- Transactions record value transfers
- Smart contract executions
- State changes in the network

Blockchain Network Properties

1. Transparent

Every node has a copy of the blockchain
All transactions are visible to network participants
Anyone can verify the history
Public blockchains are fully auditable

Why it matters: No hidden changes or secret transactions - everything is verifiable.

2. Secure

Uses cryptography and digital signatures
Public/private key pairs prove identity
Digital signatures enforce read/write access
Encryption protects sensitive data

Why it matters: Your assets are protected by mathematics, not by trusting a company.

3. Immutable

Contains consensus mechanisms that make it hard to change records
Once data is recorded, it's extremely difficult to alter
Would require controlling majority of network
Historical data is permanent

Why it matters: Your ownership records can't be erased or modified by anyone.

Part 3: Ethereum's Journey

Understanding Ethereum's journey helps us appreciate where we are today.

Ethereum Launch (2015)

Ethereum's genesis block went live, launching the "Frontier" network

This barebones release gave developers their first chance to:

Build decentralized applications
Experiment with smart contracts
Test the possibilities of programmable money

Ethereum's Mission: An open internet where users control their data, applications run without gatekeepers, and value flows freely between people.

Key Milestones in Ethereum's Evolution

1. DAI: The Pioneer Stablecoin (December 2015)

The First Decentralized Stablecoin

DAI was revolutionary because it:

Maintained a dollar peg through cryptocurrency collateral locked in smart contracts
Operated through DAO governance, making it trustless and community-controlled
Unlike centralized stablecoins, DAI has no single point of failure

Why it matters: It proved that decentralized systems could create stable, reliable financial instruments without banks.

2. CryptoKitties and the NFT Frontier (November 2017)

Digital Ownership Comes to Life

CryptoKitties was a breakthrough moment:

Showed how blockchain could enable new forms of expression
Demonstrated collectibility and culture online
Proved Ethereum could scale beyond finance into gaming, art, and digital identity
Opened entirely new creative possibilities

Impact: This early NFT game showed the world that blockchain wasn't just for finance - it was for culture, creativity, and community.

3. DeFi Summer (June 2020)

Finance Reimagined

The explosive growth of DeFi redefined finance:

Protocols for lending, trading, and yield generation gained massive momentum
Showcased the power of open, composable financial infrastructure
Brought billions in value on-chain
Established Ethereum as the home of decentralized finance

What happened: Platforms like Uniswap, Aave, and Compound showed that financial services could be:

Permissionless (anyone can use them)
Transparent (all code is open)
Composable (protocols work together like LEGO)
Non-custodial (you control your funds)

4. The Merge Update (September 15, 2022)

Ethereum's Biggest Transformation

The network transitioned from energy-intensive Proof-of-Work to Proof-of-Stake:

Changed the consensus mechanism while billions in value remained on Ethereum
Compared to "changing an aircraft's engine mid-flight"
Cut energy consumption by 99.95%
Strengthened network security
Set the groundwork for future scaling upgrades

Why it matters: This unprecedented technical achievement proved that major blockchain upgrades are possible even with massive value at stake.

Part 4: The Blockchain Trilemma

Traditional blockchains face a fundamental challenge - it's extremely difficult to optimize all three properties simultaneously.

The Three Pillars

                Security
              (High attack difficulty)
                    /\
                   /  \
                  /    \
                 /      \
    Decentralization ---- Scalability
    (Low node operator    (High performance
     requirements)         i.e., TPS)

Understanding Each Pillar

Security

High attack difficulty
Expensive to compromise the network
Examples: Bitcoin, Ethereum mainnet (PoW networks with high monetary premium)
Trade-off: Often slower and more expensive

Decentralization

Low node operator requirements
Anyone can run a node
No single point of control
Examples: Ethereum, Cardano (networks with many validators)
Trade-off: Harder to coordinate upgrades

Scalability

High performance (transactions per second)
Fast confirmation times
Low transaction costs
Examples: Solana, Avalanche (high-throughput blockchains)
Trade-off: May require powerful hardware or sacrifice some decentralization

The Challenge

You can typically optimize for two, but the third suffers:

High Security + High Decentralization = Lower Scalability (Bitcoin, Ethereum L1)
High Security + High Scalability = Lower Decentralization (Some DPoS chains)
High Decentralization + High Scalability = Lower Security (Some newer consensus mechanisms)

The Solution: Layer 2

This is where Layer 2 solutions like Lisk come in - they help solve the trilemma!

Part 5: What is Layer 2?

Layer 2 (L2) solutions are built on top of Ethereum (Layer 1) to solve the scalability problem while maintaining security and decentralization.

How Layer 2 Works

Layer 2 is a network built on top of Ethereum that:

Processes transactions off-chain (outside the main Ethereum blockchain)
Settles/anchors transactions on Layer 1 for security
Makes transactions faster and cheaper
Inherits Ethereum's security guarantees

Optimistic Rollups Explained

One popular L2 approach is Optimistic Rollups:

┌─────────────────────────────────────┐
│      Optimistic Rollup (L2)         │
│  ┌──────────────────────────────┐   │
│  │   Execution Nodes            │   │
│  │   ┌────┐ ┌────┐ ┌────┐      │   │
│  │   │ OP │ │ OP │ │ OP │      │   │  ← Fast execution off-chain
│  │   └────┘ └────┘ └────┘      │   │
│  │                              │   │
│  │   Rollup Nodes               │   │
│  │      ┌────┐        ┌────┐   │   │
│  │      │ OP │        │ OP │   │   │  ← Batch & submit to L1
│  │      └────┘        └────┘   │   │
│  │    (Sequences)  (Validators)│   │
│  │         │            │       │   │
│  │   Proving Scheme            │   │
│  │   Cannon (Rollup Geth)      │   │  ← Fraud proofs
│  └──────────────────────────────┘   │
│              │                       │
│   Submit Batches to Layer1          │
│              ↓                       │
└─────────────────────────────────────┘
                │
    Derive Layer2 Block Data
                ↓
┌─────────────────────────────────────┐
│         Ethereum (L1)                │
│  ┌──────────────┐  ┌──────────────┐ │
│  │Bridge Contract│  │Sequencer Queue│ │
│  └──────────────┘  │Contract       │ │
│                     └──────────────┘ │
└─────────────────────────────────────┘

Key Benefits of Layer 2

Scalability: Thousands of transactions per second vs. ~15 TPS on Ethereum L1
Lower Costs: Transaction fees are a fraction of L1 costs
Ethereum Security: All transactions are ultimately secured by Ethereum
EVM Compatibility: Same tools, same code, same wallets

How It Works in Practice

Users submit transactions to the L2 network
L2 executes transactions quickly and cheaply off-chain
L2 batches many transactions together
The batch is submitted to Ethereum L1 as "calldata" or "blob"
If there's fraud, anyone can challenge within a window (usually 7 days)
After the challenge period, the transactions are finalized

Optimistic Assumption: The system assumes transactions are valid unless proven otherwise, which allows for faster processing.

Part 6: Introducing Lisk

Now let's explore Lisk - a Layer 2 network designed to make blockchain development accessible and scalable.

What is Lisk?

Lisk is a highly efficient, lightning-fast, and easily scalable Layer 2 (L2) network built on Optimism (OP) and secured by Ethereum.

Built on Superchain

Lisk is part of the OP Superchain ecosystem, which means:

It leverages proven, battle-tested infrastructure
Benefits from shared security and development
Interoperates seamlessly with other OP Stack chains
Contributes to and benefits from OP Stack improvements

Key Characteristics

1. Lightning-Fast Performance

Sub-second transaction confirmation times
High throughput for demanding applications
Optimized for real-world use cases

2. Highly Efficient

Dramatically reduced gas costs compared to Ethereum L1
Efficient batch processing
Optimized resource utilization

3. Easily Scalable

Handles high transaction volumes
Designed to grow with your application
No compromise on decentralization

4. EVM Compatible

Use the same tools you know (Hardhat, Foundry, Remix)
Deploy Solidity smart contracts without changes
Seamless migration from Ethereum or other EVM chains

5. Ethereum Security

Transactions are ultimately settled on Ethereum
Inherits Ethereum's robust security model
No need to trust a separate validator set

Part 7: Why Build with Lisk?

Developer-Friendly Features

1. Low-Cost Transactions

Gas fees are a fraction of Ethereum mainnet costs
Makes micro-transactions economically viable
Enables new business models that weren't possible before

Example: A transaction that costs $50 on Ethereum L1 might cost less than $0.01 on Lisk.

2. EVM Compatibility

Use the same tools and frameworks you already know
No need to learn new programming languages
Migrate existing contracts with minimal changes
Works with MetaMask, Hardhat, Foundry, Remix, and more

Example: If you built a dApp on Ethereum, you can deploy it to Lisk with minimal or no code changes.

3. Comprehensive Developer Support

Access essential technical materials for your development journey
Extensive documentation and tutorials
Active developer community
Regular workshops and events (like this one!)

4. All Major Framework Support

Lisk supports every major Ethereum development framework:

Hardhat - Most popular development environment
Foundry - Fast, modern toolkit written in Rust
Remix - Browser-based IDE
Truffle - Established development suite
Brownie - Python-based framework

Real-World Advantages

For DApp Developers

Deploy once, work everywhere (thanks to EVM compatibility)
Lower costs mean more users can afford to use your app
Fast confirmations improve user experience
Ethereum security gives users confidence

For Users

Affordable transaction fees
Fast confirmation times
Familiar wallet experience (MetaMask, etc.)
Backed by Ethereum security

For Businesses

Cost-effective blockchain integration
Scalable infrastructure
Enterprise-ready performance
Established ecosystem and tooling

Part 8: Lisk's Position in the Ecosystem

Part of the OP Superchain

Lisk is built on the OP Stack, which means:

┌─────────────────────────────────────────┐
│         OP Superchain Ecosystem         │
│  ┌──────────┐  ┌──────────┐  ┌────────┐│
│  │ Optimism │  │   Base   │  │  Lisk  ││
│  └──────────┘  └──────────┘  └────────┘│
│  ┌──────────┐  ┌──────────┐  ┌────────┐│
│  │  Mode    │  │   Zora   │  │  etc.  ││
│  └──────────┘  └──────────┘  └────────┘│
└─────────────────────────────────────────┘
                  │
                  │ Shared Security
                  │ Shared Standards
                  │ Interoperability
                  ↓
┌─────────────────────────────────────────┐
│            Ethereum (L1)                 │
│         Security & Settlement            │
└─────────────────────────────────────────┘

Benefits of Being in the Superchain

Shared Infrastructure: Leverage improvements made across the ecosystem
Interoperability: Easy bridging between Superchain networks
Network Effects: Benefit from the entire ecosystem's growth
Proven Technology: Built on battle-tested OP Stack

Part 9: Lisk Architecture Overview

How Lisk Processes Transactions

User Transaction
      ↓
┌─────────────────────┐
│   Lisk L2 Network   │
│                     │
│  1. Receive Tx      │
│  2. Execute Tx      │
│  3. Update State    │
│  4. Batch Txs       │
└─────────────────────┘
      ↓
┌─────────────────────┐
│  Submit to Ethereum │
│  (L1 Settlement)    │
│                     │
│  - Batch Data       │
│  - State Roots      │
│  - Fraud Proofs     │
└─────────────────────┘
      ↓
   Finalized!

Key Components

1. Sequencer

Orders and executes transactions
Provides instant transaction confirmation
Batches transactions for L1 submission
Operated by Lisk initially (decentralization roadmap)

2. Batch Submitter

Posts transaction data to Ethereum L1
Ensures data availability
Makes Lisk transparent and verifiable

3. Proposer

Submits state root proposals to L1
Allows verification of L2 state

4. Challenger

Anyone can challenge invalid state transitions
7-day challenge period for fraud proofs
Ensures system integrity

Part 10: Getting Started with Lisk

Network Information

Lisk Sepolia Testnet (for development):

Network Name: Lisk Sepolia
RPC URL: https://rpc.sepolia-api.lisk.com
Chain ID: 4202
Currency Symbol: ETH
Block Explorer: https://sepolia-blockscout.lisk.com

Lisk Mainnet (for production):

Network Name: Lisk
RPC URL: https://rpc.api.lisk.com
Chain ID: 1135
Currency Symbol: ETH
Block Explorer: https://blockscout.lisk.com

Essential Resources

Official Documentation

Developer Tools

Bridge: https://bridge.lisk.com
Faucet (Testnet): https://sepolia-faucet.lisk.com
Explorer: https://blockscout.lisk.com

Community

Discord: Join the Lisk developer community
Twitter/X: @LiskHQ
Forum: Community discussions and support

Part 11: Understanding Wallets - Your Gateway to Web3

Before we dive into hands-on practice, let's understand the fundamental concepts that power your interaction with blockchain: wallets, keys, and accounts.

What is a Wallet?

A crypto wallet is NOT like a physical wallet that holds money. Instead, it's a tool that:

Stores your keys (not your actual crypto)
Manages your accounts on the blockchain
Signs transactions to prove you own an account
Interacts with blockchain networks

Important: Your crypto isn't "in" your wallet - it's on the blockchain. Your wallet just proves you own it!

Real-World Analogy: The Mailbox System

Think of blockchain wallets like a mailbox system:

🏠 Your House = The Blockchain
📬 Mailbox = Your Account/Address (0x123...)
🔑 Mailbox Key = Your Private Key
📮 Mailbox Number = Your Public Address

The mailbox (address) is visible to everyone and where people send you mail (crypto)
The mailbox key (private key) is secret and only you can open the mailbox
Anyone can see the mailbox number to send you mail
But only you with the key can open it and take things out

Part 12: Private Key, Public Key, and Address

Understanding the relationship between these three concepts is crucial for blockchain security.

The Key Generation Process

┌─────────────────────────────────────────────────────┐
│  Step 1: Generate Private Key (Random Number)      │
│                                                     │
│  Private Key (Secret, 256-bit number):             │
│  0xf8f8a2f43c8376ccb0871305060d7b27b0554d2cc72bccf41b2705608452f315│
│                                                     │
│  ⚠️  NEVER SHARE THIS - It's like your password!   │
└─────────────────────────────────────────────────────┘
                        │
                        │ Cryptographic Math (ECDSA)
                        ↓
┌─────────────────────────────────────────────────────┐
│  Step 2: Derive Public Key                         │
│                                                     │
│  Public Key (Can be shared):                       │
│  0x04a598a8030da6d86c6bc7f2f5144544beb2dd0d4e8eef320e38a0c81ff9482c52ae7acf8374d4e8f7d6c7d8a7b6c5d4e3f2a1b9c8d7e6f5a4b3c2d1e0f│
│                                                     │
│  ✅ Can be shared publicly                         │
└─────────────────────────────────────────────────────┘
                        │
                        │ Hashing (Keccak-256) + Take last 20 bytes
                        ↓
┌─────────────────────────────────────────────────────┐
│  Step 3: Create Address                            │
│                                                     │
│  Address (Your public identifier):                 │
│  0x742d35Cc6634C0532925a3b844Bc9e7595f0bEb4      │
│                                                     │
│  ✅ This is what you share to receive funds        │
└─────────────────────────────────────────────────────┘

Breaking Down Each Component

1. Private Key (Your Secret) 🔐

What it is:

A 256-bit random number (64 hexadecimal characters)
Example: 0xf8f8a2f43c8376ccb0871305060d7b27b0554d2cc72bccf41b2705608452f315

What it does:

Proves you own an account
Signs transactions to authorize them
Can derive EVERYTHING else (public key, address)

Security Rules:

❌ NEVER share it with anyone
❌ NEVER enter it on any website
❌ NEVER take a screenshot of it
❌ NEVER store it in cloud storage unencrypted
✅ Store it offline (hardware wallet or encrypted backup)

Real-world analogy: Your house key - if someone else gets it, they can enter your house and take everything.

2. Public Key (Derived from Private Key) 🔓

What it is:

A point on an elliptic curve derived from your private key
128 hexadecimal characters
Generated using ECDSA (Elliptic Curve Digital Signature Algorithm)

What it does:

Used to verify your digital signatures
Proves a transaction was signed by the owner of the private key
Not typically shared directly (the address is used instead)

Key Property:

You can derive the public key FROM the private key
But you CANNOT derive the private key from the public key
This is one-way cryptography!

Real-world analogy: Your signature style - people can verify it's your signature, but they can't forge it without your hand.

3. Address (Your Public Identifier) 📮

What it is:

A 40-character hexadecimal string (42 with '0x' prefix)
Example: 0x742d35Cc6634C0532925a3b844Bc9e7595f0bEb4
Created by hashing your public key and taking the last 20 bytes

What it does:

Identifies your account on the blockchain
Where others send you crypto
Displayed in block explorers and wallets

Usage:

✅ Safe to share publicly
✅ Post on social media
✅ Use to receive payments
✅ Display on your website

Real-world analogy: Your email address - everyone can see it and send you things, but only you can access what's inside.

The Mathematical Magic: One-Way Functions

Private Key --[ECDSA]--> Public Key --[Keccak-256]--> Address

✅ Forward is easy and fast
❌ Reverse is computationally impossible

Why this matters:

Even if someone knows your address, they can't work backwards to find your private key
This is the foundation of blockchain security
Protected by mathematics, not by trusting a company

Seed Phrase: The Master Backup 📝

Most wallets use a seed phrase (also called recovery phrase or mnemonic):

What it is:

A list of 12 or 24 random words
Example: witch collapse practice feed shame open despair creek road again ice least

How it works:

Seed Phrase (12-24 words)
        │
        ├─> Account 1: 0x742d35Cc...
        ├─> Account 2: 0x8f3b2e1d...
        ├─> Account 3: 0xa2c4f7b9...
        └─> ... (millions more possible)

Important Properties:

Can generate multiple accounts from one seed phrase
Wallets use a standard called BIP-39 (Bitcoin Improvement Proposal 39)
The same seed phrase will ALWAYS generate the same accounts
This is how you "recover" your wallet on a new device

Security Rules:

❌ NEVER share it
❌ NEVER store it digitally (no screenshots, no cloud)
✅ Write it on paper
✅ Store in a safe place
✅ Consider metal backups for fire/water resistance

Part 13: Wallet Implementation Types

Not all wallets work the same way. Let's explore the different types based on how they store and manage your keys.

1. Hot Wallets (Software Wallets) 🔥

Definition: Wallets connected to the internet.

Browser Extension Wallets

Examples: MetaMask, Rabby, Coinbase Wallet

How they work:

Install as browser extension
Store encrypted keys on your computer
Interact directly with websites
Inject web3 provider into browser

Pros:

✅ Convenient for daily use
✅ Easy to interact with dApps
✅ Quick transaction signing
✅ Free to use

Cons:

❌ Vulnerable if computer is compromised
❌ Subject to phishing attacks
❌ Keys stored on internet-connected device

Best for: Development, testing, small amounts, frequent transactions

Mobile Wallets

Examples: Trust Wallet, Argent, Rainbow

How they work:

Mobile app on your phone
Keys stored in secure enclave (on iOS/Android)
QR code scanning for transactions
WalletConnect for dApp interaction

Pros:

✅ Portable and convenient
✅ Biometric authentication (Face ID, fingerprint)
✅ Hardware security features
✅ Built-in dApp browser

Cons:

❌ Phone can be lost or stolen
❌ Vulnerable to phone malware
❌ Less secure than hardware wallets

Best for: Medium amounts, mobile transactions, on-the-go access

Web Wallets

Examples: MyEtherWallet (MEW), MyCrypto

How they work:

Access via web browser
Can work with hardware wallets
Generate keys in browser
Export private keys or keystore files

Pros:

✅ No installation required
✅ Access from any device
✅ Can integrate with hardware wallets

Cons:

❌ Vulnerable to phishing sites
❌ Must trust the website
❌ Risk of fake/malicious sites

Best for: One-time transactions, working with hardware wallets

2. Cold Wallets (Hardware Wallets) ❄️

Definition: Wallets NOT connected to the internet.

Hardware Wallets

Examples: Ledger, Trezor, SafePal

How they work:

┌─────────────────────┐
│   Your Computer     │ ← Internet connected but NO private keys
│   (MetaMask)        │
└─────────────────────┘
          │
          │ USB/Bluetooth
          │ (Transaction to sign)
          ↓
┌─────────────────────┐
│  Hardware Wallet    │ ← Keys NEVER leave this device
│  (Ledger/Trezor)    │
│                     │
│  [Confirm on Device]│ ← You physically press button
└─────────────────────┘
          │
          │ Signed transaction (no keys exposed)
          ↓
     To Blockchain

Pros:

✅ Private keys never touch internet-connected device
✅ Physical confirmation required for transactions
✅ Protected against malware
✅ Best security for large amounts
✅ Supports multiple cryptocurrencies

Cons:

❌ Costs money ($50-200+)
❌ Less convenient for frequent transactions
❌ Can be lost (but recoverable with seed phrase)
❌ Requires physical device

Best for: Large amounts, long-term storage, maximum security

Paper Wallets

What they are:

Private key/seed phrase written on paper
QR codes for easy scanning
Completely offline

Pros:

✅ Completely immune to hacking
✅ No cost
✅ Simple concept

Cons:

❌ Paper can be damaged/destroyed
❌ Can be lost or stolen
❌ Risk when generating (must be on secure computer)
❌ Difficult to use (must import to software wallet)
❌ Generally considered outdated

Best for: Long-term storage, gifts, backups (use hardware wallet instead if possible)

3. Custodial vs Non-Custodial Wallets

Non-Custodial Wallets (Self-Custody) 🔐

Examples: MetaMask, Ledger, Trust Wallet

How it works:

You control your private keys
You are responsible for security
No one else can access your funds
No one can recover your keys if lost

The principle: "Not your keys, not your crypto"

Pros:

✅ True ownership
✅ No one can freeze your account
✅ No permission needed to transact
✅ Privacy

Cons:

❌ You're responsible for security
❌ No recovery if you lose keys
❌ Must understand how it works

Best for: Those who want true ownership, understand security, and can manage keys responsibly

Custodial Wallets (Third-Party Custody) 🏦

Examples: Coinbase, Binance, Crypto.com

How it works:

Company controls your private keys
You trust them to secure your funds
They can freeze your account
They can help recover if you forget password

Think of it like: A traditional bank account

Pros:

✅ Easy to use
✅ Customer support
✅ Password recovery
✅ Familiar experience
✅ Often includes insurance

Cons:

❌ Not your keys, not your crypto
❌ Can freeze/limit your account
❌ Requires KYC (identity verification)
❌ Subject to regulations and government seizure
❌ Exchange could be hacked or go bankrupt

Best for: Beginners, those who want convenience over control, trading frequently

Security Comparison Table

Wallet Type	Security Level	Convenience	Best For
Hardware Wallet	⭐⭐⭐⭐⭐	⭐⭐	Large amounts, long-term
Mobile Wallet	⭐⭐⭐	⭐⭐⭐⭐	Daily use, medium amounts
Browser Extension	⭐⭐⭐	⭐⭐⭐⭐⭐	dApp interaction, development
Custodial Exchange	⭐⭐	⭐⭐⭐⭐⭐	Trading, beginners
Paper Wallet	⭐⭐⭐⭐	⭐	Long-term storage (outdated)

Part 14: Account Types on Ethereum

Ethereum has two fundamentally different types of accounts, each serving different purposes.

The Two Account Types

┌─────────────────────────────────────────────────┐
│          ETHEREUM ACCOUNTS                      │
├─────────────────────────────────────────────────┤
│                                                 │
│  ┌──────────────────────┐  ┌─────────────────┐│
│  │ Externally Owned     │  │ Contract        ││
│  │ Account (EOA)        │  │ Account         ││
│  │                      │  │                 ││
│  │ Controlled by        │  │ Controlled by   ││
│  │ Private Key          │  │ Smart Contract  ││
│  │                      │  │ Code            ││
│  └──────────────────────┘  └─────────────────┘│
│                                                 │
└─────────────────────────────────────────────────┘

1. Externally Owned Account (EOA) 👤

Definition: An account controlled by a private key (the one you've been using!).

How EOAs Work

┌────────────────────────────────────┐
│  EOA: 0x742d35Cc6634C0532925a...   │
│                                    │
│  ├─ Balance: 1.5 ETH               │
│  ├─ Nonce: 42                      │
│  │  (transaction count)            │
│  └─ No Code                        │
│                                    │
│  Controlled by:                    │
│  Private Key: 0xf8f8a2f43c...      │
└────────────────────────────────────┘

Characteristics

Structure:

Has an address (0x...)
Has a balance (amount of ETH)
Has a nonce (transaction counter)
Has NO CODE

Control:

Controlled by whoever holds the private key
Can initiate transactions
Can sign messages

What it can do:

✅ Send ETH to other accounts
✅ Deploy smart contracts
✅ Call smart contract functions
✅ Sign transactions
✅ Hold tokens (ERC-20, NFTs)

Examples:

Your MetaMask account
Hardware wallet account
Any wallet you create

Real-World Analogy

Think of an EOA like a person with a debit card:

You (private key holder) initiate actions
You sign transactions to approve them
You decide when and where to send money
The bank (blockchain) validates your signature

2. Contract Account (Smart Contract) 📄

Definition: An account controlled by smart contract code deployed on the blockchain.

How Contract Accounts Work

┌────────────────────────────────────┐
│  Contract: 0x3f5CE5FBFe3E9af...    │
│                                    │
│  ├─ Balance: 100 ETH               │
│  ├─ Nonce: 1                       │
│  ├─ Code: Smart Contract           │
│  │         (Immutable Logic)       │
│  └─ Storage: Contract State        │
│                                    │
│  No Private Key!                   │
│  Executes when triggered           │
└────────────────────────────────────┘

Characteristics

Structure:

Has an address (0x...)
Has a balance (amount of ETH)
Has a nonce (deployment counter)
Has CODE (smart contract logic)
Has STORAGE (contract state/data)

Control:

Controlled by its code (the smart contract)
NO private key exists
Cannot initiate transactions on its own
Only executes when triggered by an EOA or another contract

What it can do:

✅ Hold ETH and tokens
✅ Execute code when called
✅ Store data permanently
✅ Call other contracts
✅ Receive and send ETH (if coded to do so)
✅ Emit events
❌ Cannot initiate transactions on its own

Examples:

ERC-20 token contracts (USDC, DAI)
NFT contracts (CryptoPunks, Bored Apes)
DeFi protocols (Uniswap, Aave)
Multi-signature wallets
DAO contracts

Real-World Analogy

Think of a contract account like a vending machine:

It has rules (code) that determine what it does
It holds money (ETH/tokens)
It only acts when someone interacts with it (you insert coins)
It follows its programming exactly
No one has a "key" to override it

Key Differences: EOA vs Contract Account

Feature	EOA (Externally Owned)	Contract Account
Controlled By	Private Key	Smart Contract Code
Can Initiate Transactions	✅ Yes	❌ No
Has Code	❌ No	✅ Yes
Creation Cost	Free	Costs gas to deploy
Can Hold ETH	✅ Yes	✅ Yes
Can Hold Tokens	✅ Yes	✅ Yes
Address Format	0x... (derived from public key)	0x... (derived from deployer + nonce)
Nonce Usage	Counts transactions sent	Counts contracts created
Examples	MetaMask wallet	Uniswap, USDC token

How They Interact

User (You)
    │
    │ Controls with Private Key
    ↓
┌─────────────────┐
│   EOA           │ ─────────→ Can send ETH directly
│ (Your Wallet)   │              to another EOA
└─────────────────┘
    │
    │ Calls/Triggers
    ↓
┌─────────────────┐
│   Contract      │ ─────────→ Can call other
│ (Smart Contract)│              contracts
└─────────────────┘
    │
    │ Can trigger (if programmed)
    ↓
┌─────────────────┐
│   Another       │
│   Contract      │
└─────────────────┘

Important Flow:

All transactions must originate from an EOA
EOAs can call contracts
Contracts can call other contracts (when triggered)
Contracts cannot initiate transactions on their own

Advanced: Account Abstraction & Smart Contract Wallets 🚀

There's a new evolution happening: making wallets themselves be smart contracts!

Traditional Account (EOA)

User → Private Key → Signs Transaction → Blockchain
                      ↑
                 Fixed Rules
          (Must pay gas in ETH)
        (Simple signature scheme)

Smart Contract Wallet (Account Abstraction)

User → Multiple Auth Methods → Smart Contract Wallet → Blockchain
       (Keys, Biometrics,             ↑
        Social Recovery)         Custom Logic!
                            (Gas in any token)
                       (Multi-sig, spending limits)
                            (Social recovery)

Examples of Smart Contract Wallets

1. Multi-Signature Wallets (Multi-Sig)

How it works:

Requires multiple private keys to approve transactions
Example: 3 owners, need 2 signatures to send funds (2-of-3 multi-sig)

Use case: Company treasury, shared funds, enhanced security

Example: Gnosis Safe

2. Social Recovery Wallets

How it works:

Choose trusted "guardians" (friends, family)
If you lose your key, guardians can help you recover
No single person can steal your funds

Use case: Better than seed phrases for average users

Example: Argent wallet

3. Programmable Wallets

Features:

Daily spending limits
Automatic payments
DeFi automation
Gas paid in any token (not just ETH)
Batched transactions

Use case: Advanced DeFi users, businesses

Example: Safe{Wallet}, Argent

Benefits of Smart Contract Wallets

Security:

✅ Multi-signature protection
✅ Social recovery (no seed phrase to lose)
✅ Spending limits
✅ Whitelisted addresses
✅ Time locks

User Experience:

✅ Pay gas in any token (USDC, DAI, etc.)
✅ Batch multiple transactions
✅ Automated transactions
✅ Better recovery options

Flexibility:

✅ Upgradeable logic
✅ Custom rules
✅ Session keys (temporary permissions)

Challenges & Trade-offs

Current Limitations:

❌ Higher gas costs (contract execution)
❌ More complex to set up
❌ Not all dApps support them yet
❌ Requires initial deployment cost

The Future: ERC-4337 (Account Abstraction Standard)

Making smart contract wallets work everywhere
Better user experience than traditional EOAs
Will gradually become the standard

Quick Decision Guide: Which Account Type?

Use an EOA (Traditional Wallet) if:

✅ You're just getting started
✅ You want simplicity
✅ You need broad compatibility
✅ You're okay managing private keys

Use a Smart Contract Wallet if:

✅ You want social recovery
✅ You need multi-signature
✅ You want advanced features (spending limits, etc.)
✅ You're managing significant funds
✅ You want better security

Most people start with EOA (MetaMask) and later explore smart contract wallets for advanced needs!

Part 15: Understanding Gas and Transactions

Now that you understand wallets and accounts, let's dive into how transactions actually work and what "gas" really means.

What is a Transaction?

Definition: A signed message from an account that changes the state of the blockchain.

Types of Transactions

1. Value Transfer:

Send 0.5 ETH from 0xABC... to 0xXYZ...

2. Contract Deployment:

Deploy a new smart contract to the blockchain

3. Contract Interaction:

Call a function on a smart contract
(e.g., swap tokens on Uniswap)

Anatomy of a Transaction

┌─────────────────────────────────────────────┐
│            TRANSACTION                      │
├─────────────────────────────────────────────┤
│                                             │
│  From: 0x742d35Cc6634C0532925a3b844Bc...  │  ← Sender (your address)
│  To: 0x3f5CE5FBFe3E9af3B33d4e456Cd3...    │  ← Receiver (address or contract)
│  Value: 0.5 ETH                            │  ← Amount of ETH to send
│  Data: 0xa9059cbb000000000000000...        │  ← Contract function call (if any)
│  Gas Limit: 21000                          │  ← Max gas you're willing to use
│  Max Fee: 50 Gwei                          │  ← Max price per gas unit
│  Nonce: 42                                 │  ← Transaction number
│  Signature: 0x8f3b2e1d4c5a6f7b8...        │  ← Proof you authorized this
│                                             │
└─────────────────────────────────────────────┘

Let's break down each field:

1. From (Sender)

Your account address
Automatically filled by your wallet
Must have enough balance for value + gas

2. To (Receiver)

Destination address
Can be another EOA or a contract
Empty (null) if deploying a new contract

3. Value

Amount of ETH to send
Can be 0 (for contract calls without payment)
Denominated in Wei (1 ETH = 10^18 Wei)

4. Data (Input Data)

Empty for simple ETH transfers
Contains encoded function call for contract interactions
Example: transfer(address,uint256) becomes 0xa9059cbb...

5. Gas Limit

Maximum computational work you authorize
If set too low, transaction fails but you still pay gas
If set too high, only actual gas used is charged

6. Gas Price / Max Fee

How much you pay per unit of gas
Denominated in Gwei (1 Gwei = 10^-9 ETH)
Higher price = faster confirmation (miners prioritize)

7. Nonce

Transaction counter for your account
Prevents "replay attacks"
Must be sequential (0, 1, 2, 3...)

8. Signature

Cryptographic proof you authorized this transaction
Created by signing the transaction with your private key
Allows anyone to verify it came from you

What is Gas?

Definition: Gas is the unit that measures the computational work required to execute operations on Ethereum.

The Gas System: A Restaurant Analogy

Think of gas like ordering food at a restaurant:

┌────────────────────────────────────────────┐
│         🍽️  RESTAURANT ANALOGY             │
├────────────────────────────────────────────┤
│                                            │
│  Menu Item       = Operation              │
│  (Simple Salad)    (Simple transaction)   │
│                                            │
│  Price per Item  = Gas Price (Gwei)       │
│  ($10/dish)        (50 Gwei per gas)      │
│                                            │
│  Number of Items = Gas Limit              │
│  (Order 3 dishes)  (Need 21000 gas)       │
│                                            │
│  Total Bill      = Transaction Fee        │
│  ($30 total)       (21000 × 50 Gwei)      │
│                                            │
│  Tip             = Priority Fee           │
│  (Fast service)    (Faster confirmation)  │
│                                            │
└────────────────────────────────────────────┘

Gas Components

1. Gas Limit (How much work is needed):

Each operation costs a specific amount of gas
Simple ETH transfer: 21,000 gas
Token transfer: ~65,000 gas
Complex DeFi swap: 150,000-500,000 gas

Common Operations and Their Gas Costs:

Operation                      Gas Cost
─────────────────────────────────────────
Send ETH (simple transfer)     21,000
ERC-20 token transfer          ~65,000
Uniswap token swap             ~150,000
Deploy simple contract         ~200,000+
Deploy complex contract        ~2,000,000+
Mint an NFT                    ~80,000

2. Gas Price (How much you pay per unit):

Measured in Gwei (gigawei)
1 Gwei = 0.000000001 ETH = 10^-9 ETH
Varies based on network congestion
Higher price = faster confirmation

Typical Gas Prices:

Network State          Gas Price
──────────────────────────────────
🟢 Not Busy           5-20 Gwei
🟡 Moderate           20-50 Gwei
🔴 Congested          50-100 Gwei
🔥 Very Busy          100+ Gwei

3. Transaction Fee (Your total cost):

Transaction Fee = Gas Used × Gas Price

Example:
─────────────────────────────────────
Gas Used: 21,000
Gas Price: 50 Gwei

Fee = 21,000 × 50 Gwei
    = 1,050,000 Gwei
    = 0.00105 ETH

If ETH = $2,000:
Fee = $2.10

EIP-1559: Modern Gas System

Since August 2021, Ethereum uses a new gas system called EIP-1559:

Old System (Pre-EIP-1559):

You set: Gas Price (one value)

New System (EIP-1559):

┌──────────────────────────────────────┐
│  Base Fee (automatic)                │  ← Set by protocol (burned 🔥)
│  +                                   │
│  Priority Fee (your tip)             │  ← You set (goes to validators)
│  =                                   │
│  Max Fee Per Gas (your maximum)      │  ← You set (protection)
└──────────────────────────────────────┘

Components:

Base Fee (Required):
- Set automatically by the network
- Burned (removed from circulation) 🔥
- Increases when network is busy
- Decreases when network is idle
Priority Fee (Your Tip):
- Extra you pay to validators
- Incentivizes faster inclusion
- You control this amount
Max Fee Per Gas (Your Protection):
- Maximum you're willing to pay
- If base fee + priority fee < max fee, you only pay actual
- Prevents overpaying if network spikes

Example:

Base Fee: 30 Gwei (burned)
Priority Fee: 2 Gwei (to validator)
Max Fee: 100 Gwei (your protection)

Actual Fee Per Gas: 30 + 2 = 32 Gwei ✅
(Lower than your max of 100 Gwei)

Total Cost: 21,000 × 32 Gwei = 0.000672 ETH

Gas on Layer 2 (Lisk)

Why L2 is cheaper:

Layer 1 (Ethereum Mainnet):
────────────────────────────────
Send ETH: 21,000 gas × 50 Gwei
Cost: $2-10+ per transaction 💸

Layer 2 (Lisk):
────────────────────────────────
Send ETH: 21,000 gas × 0.001 Gwei
Cost: $0.001-0.01 per transaction ✨

Why the difference?

Less competition: Fewer users per L2 network
Batching: Many L2 transactions combined into one L1 transaction
Optimized execution: Better efficiency
Data compression: Reduced data posted to L1

Real-World Transaction Examples

Example 1: Simple ETH Transfer on Lisk

┌──────────────────────────────────────────────┐
│  TRANSACTION: Send ETH to Friend             │
├──────────────────────────────────────────────┤
│  From: 0x742d...                            │
│  To: 0x8f3b...                              │
│  Amount: 0.1 ETH                            │
│  Gas Limit: 21,000                          │
│  Gas Price: 0.001 Gwei                      │
│                                              │
│  Cost Breakdown:                             │
│  ─────────────────────────────────────       │
│  Transfer Amount: 0.1 ETH                   │
│  Gas Fee: 0.000000021 ETH                   │
│  ─────────────────────────────────────       │
│  Total: 0.100000021 ETH                     │
│                                              │
│  In USD (ETH = $2000): $200.00004           │
│  Gas cost: Less than $0.0001! 🎉            │
└──────────────────────────────────────────────┘

Example 2: Token Swap on Uniswap (L1 vs L2)

┌──────────────────────────────────────────────┐
│  Ethereum L1                                 │
├──────────────────────────────────────────────┤
│  Swap: 1000 USDC → ETH                      │
│  Gas Limit: 180,000                         │
│  Gas Price: 50 Gwei                         │
│  Fee: 180,000 × 50 = 9,000,000 Gwei        │
│       = 0.009 ETH = $18 💸                  │
└──────────────────────────────────────────────┘

┌──────────────────────────────────────────────┐
│  Lisk L2                                     │
├──────────────────────────────────────────────┤
│  Swap: 1000 USDC → ETH                      │
│  Gas Limit: 180,000                         │
│  Gas Price: 0.001 Gwei                      │
│  Fee: 180,000 × 0.001 = 180 Gwei           │
│       = 0.00000018 ETH = $0.00036 ✨       │
└──────────────────────────────────────────────┘

💡 L2 is ~50,000× cheaper in this example!

Transaction Lifecycle

Let's follow a transaction from creation to confirmation:

Step 1: Create Transaction
│  User: "I want to send 0.5 ETH"
│  Wallet fills in details (from, to, value, gas, nonce)
↓

Step 2: Sign Transaction
│  Wallet: "Please confirm"
│  User: Clicks "Confirm"
│  Wallet signs with private key
↓

Step 3: Broadcast to Network
│  Wallet sends to RPC node
│  Node broadcasts to mempool
│  Other nodes receive transaction
↓

Step 4: Waiting in Mempool
│  Transaction sits in "pending" state
│  Validators/Miners see it
│  Higher gas price = higher priority
↓

Step 5: Included in Block
│  Validator picks your transaction
│  Executes the transaction
│  Includes it in a block
↓

Step 6: Block Confirmation
│  Block added to blockchain
│  Your transaction has "1 confirmation"
│  More blocks = more confirmations
↓

Step 7: Finalized
│  After enough confirmations (varies by use case):
│    - Exchanges: 12-20 confirmations
│    - Small transactions: 1-3 confirmations
│    - Large amounts: 20+ confirmations
│  On Lisk L2: Usually 1-2 seconds!

Transaction States

┌─────────────────────────────────────────┐
│  PENDING (in mempool)                   │
│  ⏳ Waiting to be included in a block   │
│  ↓                                      │
│  CONFIRMED (in block)                   │
│  ✅ Included in the blockchain          │
│  ↓                                      │
│  FINAL (enough confirmations)           │
│  🔒 Irreversible                        │
└─────────────────────────────────────────┘

Special States:
─────────────────
❌ FAILED: Transaction executed but reverted
   (You still pay gas!)

⏰ DROPPED: Transaction never included
   (Usually due to low gas price or nonce issues)

⚠️ REPLACED: You sent a new transaction with
   same nonce but higher gas price

Issue 1: "Out of Gas"

Problem: Gas limit too low for operation
Solution: Increase gas limit
         (MetaMask usually estimates correctly)

Issue 2: "Transaction Pending Forever"

Problem: Gas price too low during busy network
Solution:
  - Wait it out
  - Speed up transaction (send with higher gas)
  - Cancel transaction (send 0 ETH to yourself with same nonce)

Issue 3: "Nonce Too Low"

Problem: You already used that nonce
Solution: Wait for pending transaction to confirm
          or reset MetaMask account (Settings > Advanced > Reset Account)

Issue 4: "Transaction Failed But I Paid Gas"

Problem: Transaction was included but execution failed
Explanation: Gas pays for computational work
            Even failed computation uses resources
Solution: Check contract/transaction details
          Fix the issue and try again

Gas Optimization Tips

For Users:

✅ Use Layer 2 (Lisk, Arbitrum, Optimism) whenever possible
✅ Time your transactions - use gas trackers (ethgasstation.info)
✅ Batch transactions when possible
✅ Approve unlimited for tokens you trust (saves gas on future transactions)
✅ Avoid peak hours (US business hours = more expensive)

For Developers:

✅ Optimize contract code
✅ Use efficient data structures
✅ Minimize storage writes
✅ Use events instead of storage when possible
✅ Consider upgradeable patterns carefully

Hands-On Practice: Your First Steps on Lisk

Now that you understand the fundamentals, let's get hands-on! Follow along with the instructor to complete these practical exercises.

Activity 1: Request Test ETH from Faucet 💰

Let's get some test ETH so you can start experimenting!

Steps:

Make sure you've added Lisk Sepolia network to MetaMask (use the button above)
Copy your wallet address from MetaMask
Visit the Lisk Sepolia Faucet: https://sepolia-faucet.lisk.com
Paste your address and request test ETH
Wait a few seconds and check your MetaMask balance

What you'll see:

Balance updates in MetaMask
Notification of incoming transaction

Why this matters: You need test ETH to deploy smart contracts and interact with the blockchain. Test ETH has no real value - it's just for learning!

Activity 2: Send Your First Transaction 🚀

Experience how blockchain transactions work by sending test ETH to yourself.

Steps:

In MetaMask, click your account icon → "Add account or hardware wallet" → "Add a new account"
Name it "Test Account 2"
Copy the address of your new account
Switch back to Account 1
Click "Send" in MetaMask
Paste your Account 2 address
Enter amount: 0.001 ETH (a small test amount)
Review gas fees and click "Confirm"
Watch the transaction status change from "Pending" to "Confirmed"

What you'll learn:

How transactions work
What gas fees are
Transaction confirmation times (usually a few seconds on Lisk!)

Activity 3: Explore the Block Explorer 🔍

See your transaction on the public blockchain!

Steps:

After your transaction confirms, click on it in MetaMask
Click "View on block explorer"
The Lisk Sepolia block explorer will open

Things to explore:

Transaction Hash: Unique ID for your transaction
From: Your Account 1 address
To: Your Account 2 address
Value: 0.001 ETH
Gas Used: How much computational work was needed
Block Number: Which block includes your transaction

Try this:

Click on your address to see all your transactions
Click on any block number to see what else was in that block
Search for a contract address (like 0x...) and see the "Contract" tab

Why this matters: Block explorers let anyone verify transactions. This transparency is a key feature of blockchain!

Activity 4: Introduction to Remix IDE 🛠️

Let's explore the tool we'll use to write smart contracts in Session 3.

Steps:

Open Remix IDE: https://remix.ethereum.org
Look at the interface:
- Left sidebar: File Explorer, Solidity Compiler, Deploy & Run Transactions
- Middle: Code editor
- Right: Plugin manager and terminal
In the File Explorer, expand contracts/ folder
Click on 1_Storage.sol to view it

What you're looking at:

// SPDX-License-Identifier: GPL-3.0
pragma solidity >=0.8.2 <0.9.0;

contract Storage {
    uint256 number;  // ← A variable that stores a number

    function store(uint256 num) public {  // ← Function to save a number
        number = num;
    }

    function retrieve() public view returns (uint256){  // ← Function to read the number
        return number;
    }
}

Try to identify (instructor will explain):

Contract name: Storage
Variable: number (stores data)
Two functions: store() (writes data) and retrieve() (reads data)

Don't worry about understanding every detail - we'll learn Solidity deeply in Session 3!

Activity 5: Deploy Your First Smart Contract 🎉

Let's deploy the Storage contract to Lisk Sepolia - no coding required!

Steps:

Compile the Contract:
- In Remix, click the "Solidity Compiler" icon (left sidebar)
- Click "Compile 1_Storage.sol"
- You should see a green checkmark ✅
Connect MetaMask:
- Click the "Deploy & run transactions" icon
- In "Environment" dropdown, select "Injected Provider - MetaMask"
- MetaMask will popup - click "Connect"
- Verify it shows "Custom (4202) network" (Lisk Sepolia)
Deploy the Contract:
- Make sure "Storage" is selected in the "Contract" dropdown
- Click the orange "Deploy" button
- MetaMask will popup asking to confirm
- Check the gas fee and click "Confirm"
- Wait for the transaction to confirm
Your Contract is Live! 🎊
- You'll see the deployed contract appear under "Deployed Contracts"
- Click the dropdown arrow to see the functions

Interact with Your Contract:

Store a number:
- Expand the "store" function
- Enter a number like 42
- Click the "store" button (orange - because it changes data)
- Confirm the transaction in MetaMask
- Wait for confirmation
Retrieve the number:
- Click the "retrieve" button (blue - because it only reads)
- You should see 42 appear below!
- No MetaMask popup because reading data is free!

Find Your Contract on Block Explorer:

Copy the contract address from Remix (shown under "Deployed Contracts")
Go to https://sepolia-blockscout.lisk.com
Paste the address in the search bar
See your contract on the blockchain!
Click the "Transactions" tab to see your interactions

🎉 Congratulations! You just deployed and interacted with your first smart contract!

Activity 6: Wallet Security Basics 🔐

Before we finish, let's discuss keeping your wallet safe.

Key Security Principles:

Private Key = Your Money
- Never share your private key or seed phrase with anyone
- Not even "support" (they will never ask)
- If someone gets your private key, they can take everything
Seed Phrase is Your Backup
- Write it down on paper (not digital!)
- Store it somewhere safe
- Anyone with your seed phrase can recreate your wallet
Public Address is Safe to Share
- Your address (0x...) is like your email - safe to give to others
- Use it to receive funds or share your work
Test Networks vs Mainnet
- Test ETH (Sepolia) = No value, for learning
- Real ETH (Mainnet) = Real money
- Always practice on testnets first!
Scam Warning Signs 🚨
- "Send me ETH and I'll send double back" ❌
- "Verify your wallet by entering seed phrase" ❌
- Messages asking for private keys ❌
- Websites that look like official sites but with wrong URLs ❌

Best Practices:

✅ Keep seed phrase offline
✅ Use hardware wallet for large amounts
✅ Double-check addresses before sending
✅ Start with small test transactions
✅ Verify URLs (bookmark official sites)

Session 2 Checklist ✅

Before moving to Session 3, make sure you've completed:

✅ Added Lisk Sepolia network to MetaMask
✅ Received test ETH from faucet
✅ Sent a test transaction between your accounts
✅ Explored your transaction on block explorer
✅ Opened and explored Remix IDE
✅ Deployed the Storage contract to Lisk Sepolia
✅ Interacted with your deployed contract (store and retrieve)
✅ Found your contract on the block explorer
✅ Understand basic wallet security

Questions? Ask the instructor or join our Discord community!

Summary: Key Takeaways

Web3 Evolution

Web1: Read-only, static content
Web2: Read-write, centralized platforms
Web3: Read-write-own, decentralized ownership

Blockchain Fundamentals

Transparent: All transactions are visible
Secure: Protected by cryptography
Immutable: Records can't be changed

The Blockchain Trilemma

Security, Decentralization, Scalability - pick two
Layer 2 solutions help solve this challenge

Lisk Advantages

Lightning-fast transactions
Low-cost gas fees
EVM compatible - use familiar tools
Ethereum security - backed by L1
Part of Superchain - shared infrastructure

Next Steps

Ready to start building? In the upcoming sessions, you'll learn:

Session 3: Solidity Smart Contracts - Write your first smart contract
Session 4: Building Your First DApp - Connect frontend to smart contracts
Session 5: ERC Standards & Modular Design - Build professional-grade tokens
Session 7: DeFi & Automated Market Makers - Create DeFi protocols
Session 9: From Hack to Startup - Turn your project into a venture

Part 1: The Evolution of the Internet​

Web1 vs Web2 vs Web3​

Comparative Overview​

Web1: The Read-Only Era (1990-2005)​

Web2: The Interactive Era (2005-Present)​

Web3: The Ownership Era (Emerging Now)​

Part 2: Understanding Blockchain​

What is Blockchain?​

Core Concepts​

Blockchain Network Properties​

1. Transparent​

2. Secure​

3. Immutable​

Part 3: Ethereum's Journey​

Ethereum Launch (2015)​

Key Milestones in Ethereum's Evolution​

1. DAI: The Pioneer Stablecoin (December 2015)​

2. CryptoKitties and the NFT Frontier (November 2017)​

3. DeFi Summer (June 2020)​

4. The Merge Update (September 15, 2022)​

Part 4: The Blockchain Trilemma​

The Three Pillars​

Understanding Each Pillar​

Security​

Decentralization​

Scalability​

The Challenge​

The Solution: Layer 2​

Part 5: What is Layer 2?​

How Layer 2 Works​

Optimistic Rollups Explained​

Key Benefits of Layer 2​

How It Works in Practice​

Part 6: Introducing Lisk​

What is Lisk?​

Built on Superchain​

Key Characteristics​

1. Lightning-Fast Performance​

2. Highly Efficient​

3. Easily Scalable​

4. EVM Compatible​

5. Ethereum Security​

Part 7: Why Build with Lisk?​

Developer-Friendly Features​

1. Low-Cost Transactions​

2. EVM Compatibility​

3. Comprehensive Developer Support​

4. All Major Framework Support​

Real-World Advantages​

For DApp Developers​

For Users​

For Businesses​

Part 8: Lisk's Position in the Ecosystem​

Part of the OP Superchain​

Benefits of Being in the Superchain​

Part 9: Lisk Architecture Overview​

How Lisk Processes Transactions​

Key Components​

1. Sequencer​

2. Batch Submitter​

3. Proposer​

4. Challenger​

Part 10: Getting Started with Lisk​

Network Information​

Essential Resources​

Official Documentation​

Developer Tools​

Community​

Part 11: Understanding Wallets - Your Gateway to Web3​

What is a Wallet?​

Real-World Analogy: The Mailbox System​

Part 12: Private Key, Public Key, and Address​

The Key Generation Process​

Breaking Down Each Component​

1. Private Key (Your Secret) 🔐​

2. Public Key (Derived from Private Key) 🔓​

3. Address (Your Public Identifier) 📮​

The Mathematical Magic: One-Way Functions​

Seed Phrase: The Master Backup 📝​

Part 13: Wallet Implementation Types​

Part 1: The Evolution of the Internet

Web1 vs Web2 vs Web3

Comparative Overview

Web1: The Read-Only Era (1990-2005)

Web2: The Interactive Era (2005-Present)

Web3: The Ownership Era (Emerging Now)

Part 2: Understanding Blockchain

What is Blockchain?

Core Concepts

Blockchain Network Properties

1. Transparent

2. Secure

3. Immutable

Part 3: Ethereum's Journey

Ethereum Launch (2015)

Key Milestones in Ethereum's Evolution

1. DAI: The Pioneer Stablecoin (December 2015)

2. CryptoKitties and the NFT Frontier (November 2017)

3. DeFi Summer (June 2020)

4. The Merge Update (September 15, 2022)

Part 4: The Blockchain Trilemma

The Three Pillars

Understanding Each Pillar

Security

Decentralization

Scalability

The Challenge

The Solution: Layer 2

Part 5: What is Layer 2?

How Layer 2 Works

Optimistic Rollups Explained

Key Benefits of Layer 2

How It Works in Practice

Part 6: Introducing Lisk

What is Lisk?

Built on Superchain

Key Characteristics

1. Lightning-Fast Performance

2. Highly Efficient

3. Easily Scalable

4. EVM Compatible

5. Ethereum Security

Part 7: Why Build with Lisk?

Developer-Friendly Features

1. Low-Cost Transactions

2. EVM Compatibility

3. Comprehensive Developer Support

4. All Major Framework Support

Real-World Advantages

For DApp Developers

For Users

For Businesses

Part 8: Lisk's Position in the Ecosystem

Part of the OP Superchain

Benefits of Being in the Superchain

Part 9: Lisk Architecture Overview

How Lisk Processes Transactions

Key Components

1. Sequencer

2. Batch Submitter

3. Proposer

4. Challenger

Part 10: Getting Started with Lisk

Network Information

Essential Resources

Official Documentation

Developer Tools

Community

Part 11: Understanding Wallets - Your Gateway to Web3

What is a Wallet?

Real-World Analogy: The Mailbox System

Part 12: Private Key, Public Key, and Address

The Key Generation Process

Breaking Down Each Component

1. Private Key (Your Secret) 🔐

2. Public Key (Derived from Private Key) 🔓

3. Address (Your Public Identifier) 📮

The Mathematical Magic: One-Way Functions

Seed Phrase: The Master Backup 📝

Part 13: Wallet Implementation Types