Cryptocurrency Exchange Blockchain: Web3 Trust Foundation and Consensus Algorithms, Cryptography Analysis

In the traditional Internet (Web2), users’ trust relies on centralized institutions such as banks, social platforms, or e-commerce giants. However, frequent issues like data breaches and algorithm manipulation have led people to seek a trust mechanism that does not depend on “middlemen.” This is the core goal of Web3 — reconstructing the trust system through blockchain technology, allowing users to truly control their digital assets and identities. Blockchain is called the “trust engine” of Web3 because it relies on two main technological pillars: consensus algorithms and cryptography, enabling trustworthy collaboration in a decentralized environment.

Consensus Algorithms: The “Rule Engine” for Strangers to Reach Agreement

In blockchain networks, thousands of nodes worldwide may not know each other, but they must agree on questions like “Is this transaction valid” and “How should data be updated.” This consensus depends on consensus algorithms — a set of mathematical rules that ensure the network can operate efficiently even with malicious nodes.

Proof of Work (PoW): The classic algorithm used by Bitcoin, requiring nodes to compete for the right to record transactions through complex calculations (commonly called “mining”). This mechanism consumes real resources (such as electricity) to increase the cost of malicious behavior, making it difficult for attackers to tamper with historical data.

Proof of Stake (PoS): The upgraded algorithm used by Ethereum, where nodes earn the right to record transactions based on the amount and duration of tokens they hold. PoS reduces energy consumption but requires participants to stake assets; malicious behavior risks losing their staked assets.

Whether PoW or PoS, both fundamentally rely on economic incentives and penalties to encourage nodes to “vote honestly,” ultimately ensuring the authenticity and consistency of data across the network.

Cryptography: The “Invisible Shield” for Data Security

Another core aspect of blockchain is cryptography, which guarantees data privacy and integrity, enabling users to interact securely without revealing their real identities.

Hash Functions: Convert data of any length into a fixed-length unique string (hash value). Even slight modifications to the original data will drastically change the hash value. Blockchain links each block through hashes, forming an immutable chain — if someone alters historical records, all subsequent hashes will become invalid.

Asymmetric Encryption: Users possess a “public key” and a “private key.” The public key can be shared openly to receive information, while the private key is used to sign transactions. For example, when A transfers funds to B, A uses their private key to generate a digital signature. All network nodes can verify the transaction’s authenticity via the public key but cannot forge the signature.

The “Triple Revolution” of Trust

Blockchain’s reconstruction of trust manifests in three levels:

Transparency: All transaction records are publicly accessible, eliminating information asymmetry (e.g., Bitcoin block explorers can trace the flow of each token).

Decentralization: Data is maintained collectively by global nodes, with no single control point (e.g., DAOs achieve collective decision-making through smart contracts).

Self-Verification: Users independently manage assets using cryptographic tools without relying on third parties (e.g., signing transactions directly with MetaMask wallet).

From “Trusting People” to “Trusting Code”

The vision of Web3 is to build a user-driven Internet, where blockchain establishes rules through consensus algorithms and ensures security via cryptography, shifting trust from “human governance” to “code governance.” In the future, breakthroughs like zero-knowledge proofs and sharding will further advance this “trust engine,” enabling more scenarios — from decentralized finance to digital identities, supply chain traceability, and copyright management. A new collaborative network that requires no intermediary authority is taking shape. $VANRY **$SWCH **$ACE