each node receives transactions • Consensus layer - Makes sure that each node agrees on the same transactions to modify their local state ◦ PoW (Proof of work) ◦ PoS (Proof of stake) • Application layer - Input a transaction and a state will return a new state ◦ Bitcoin - Account balance ◦ Ethereum - EVM ◦ Chainlink - Provide external data Proof of Work (PoW) vs. Proof of Stake (PoS)