Tag: crypto

Why Ethereum matters

Most people don’t understand blockchain, let alone Ethereum.

What is Blockchain?

Blockchain is basically a database that everyone shares.

Anyone can write to the database.

Blockchain enables users to attain self sovereignty over their money and wealth. To do so, all you need is a non-custodial crypto wallet.

What is Ethereum?

Ethereum is a decentralized world computer.

Ethereum possesses all the key tenets of decentralization, security, and cryptography, which are fundamental to blockchain.

Beyond that, Ethereum is fully programmable, where any application can be built.

The investment case for Ethereum (and hence ETH) is that it will become the most liquid token in a digital economy built atop of a Turing-complete decentralized computer that can execute smart contracts.

How do most people view Ethereum, and what are they missing?

Ethereum means many things to different people.

To some, it is a cryptocurrency… a token and you can buy and sell and speculate on, just like any stock or asset.

To other people, Ethereum is the entry point into the world of DeFi, and the slightly shady world of lending, borrowing and yield farming.

Some people use Ethereum buy into web3 projects like NFT’s or other crypto tokens.

To others, Ethereum is like a cousin of Bitcoin with high-transaction fees.

All of these various “identities” that Ethereum might take on express the magic of the Ethereum Virtual Machine.

When you combine all these applications of Ethereum, you start to see the big picture:

Ethereum is more than a cryptocurrency – it is programmable money.

Of course, the first use case of blockchain was the Bitcoin cryptocurrency, and it is extremely valuable because it solves the double spend problem.

But the principles of blockchain that enable currency can be applied in many other unique and creative ways. This is what Ethereum focuses on.

Solving the double spend problem is just the first of many.

However, in order to apply blockchain tech to problems in the world and on the internet, we needed a way to build apps and systems that has blockchain technology built in.

We needed a blockchain software development platform.

This is why Ethereum was invented.

Ethereum is a Platform Where Any Application Can Be Built

Ethereum is first and foremost a computer built on the technical fundamentals of blockchain.

Remember computers in the 90s and 2000s and even the ones we have now aka smartphones?

Well, the Ethereum computer is like that but its built on a new architecture using blockchain.

The technical fundamentals of Ethereum are sound. Its a distributed computer, meaning it runs on a network of linked nodes instead of a single motherboard and processor.

And blockchains fundamentals of decentralization, cryptography, and security have been built in… so its different from other computers because of this.

Given that Ethereum is a computer, this means that Ethereum can serve as a platform that allows applications to flourish. Ethereum it provides the tools for this.

Solidity is the Programming Language for Ethereum

By tools, I’m talking programming languages, developer documentation, Github repositories, communities, etc.

Ethereum actually has a programming language called “Solidity” that allows any developers to write code and build an application using the Ethereum blockchain as a platform.

Doing so allows developers to build the front-end that users interact with, while maintaining the solid technical fundamentals like decentralization that Ethereum promises.

Since 2017 when I first learned about Ethereum, this is by and large the biggest reason that I believe in its future.

I wanted to invest in a technically sound project that was seeking to re-engineer the internet and the way computing can be architected.

A technically sound blockchain platform would ensure that software engineers and developers would be driven to use it.

And in technology, if developers use it, then the business people will follow.

The platforms that allow applications to be built will be the biggest winners.

This is true for any industry. For this reason, I am bullish on Ethereum.

Ethereum scalability vs. decentralization and the future of ETH.

Its difficult to have both scalability and decentralization on a blockchain.

If the blockchain community cares about maintaining decentralization, we must prioritize decentralization over scalability.

Ethereum and Decentralization

Yes, decentralization matters. What makes ethereum decentralized?

As Polynya describes on the linked Medium article, in order to ensure decentralization, it is important for a significant number of average users to be able to run a validator node.

A validator node is a someone with a computer within a peer-to-peer network that ensures consensus and validates transactions on the blockchain network. This prevents falsification and fraudulent activity, ensuring the blockchain remains trustworthy and tamper-proof.

To increase decentralization, blockchains must not create barriers or restrict / limit anyone’s ability to serve the community as a validator node.

Blockchains also need a way to incentivize users to become validator nodes. Today, ethereum does this by something called “proof of stake”, where validator nodes earn interest for their work.

Today, ethereum does a pretty good job of this by keeping block size low, meaning less computing power is needed to validate each block.

And while validator nodes on ethereum technically require 32 ETH, users can join a staking pool to participate with a small group.

How is a decentralized community of validator nodes structured?

To ensure that ethereum continues to have as many validator nodes as possible, it needs to be easy for people to serve as nodes.

Users with consumer laptops/hardware and novice technical acumen should be able to participate in the community as a validator.

Compare the two possible blockchain architectures below and how they might affect the average person’s ability to serve as a node:

  • Scenario A: Low computing power is required for validation. Someone with a regular laptop (the kind you can buy from best buy or costco or apple) is able to run a node on the network and act as a validator.
  • Scenario B: High computing power is required for validation. A network full of a high-performance servers, or million-dollar supercomputers acting as nodes.

The model described above in Scenario A is decentralized because there can be a LOT of validators and nodes ensuring that no bad actors try to take over.

In Scenario A, while maintaining decentralization, the tradeoff with having a culture of small validator nodes means the blockchain is unfortunately inefficient and less scalable than a centralized system can be.

Scenario B is way more centralized because there are fewer people that will be able to serve as a node on the network.

The small number of nodes in Scenario B could in theory work together to take advantage of some portion of users at any given time.

Although Scenario B will be highly scalable, lower cost, and will enable the network to run faster, having such a structure defeats the purpose because the whole reason blockchains are valuable in the first place is to enable decentralization.

Scenario B could be less-favorable for end users because you cannot trust the few large-scale validator nodes from acting out of self interest.

Maximizing Decentralization

To maximize decentralization, as many people as possible should be able to serve as a validator node on the network.

With present technology, true decentralized systems are great for establishing trust and avoiding but not so great for scalability.

The good news is that Ethereum will release data sharding which will increase scalability, but the risk is that, by Polynya’s estimates, it may take until 2023.

This is the world we’re living in today with Ethereum.

As Polynya describes below, based on the current state of the internet, I’m not so sure whether or not users truly do care about decentralization.

“there’s plenty of evidence from the web2 world, where the most adopted services are the ones that are most convenient, despite their overwhelming problems with privacy.” Polynya on Medium

Polynya on Medium

Perhaps some people simply want to use the most convenient blockchain with the lowest fees.

However, this partially misses the point.

In traditional models, as in Apple’s app-store, users experience fees on the backend, where the centralized entity takes a percentage cut of all app-generated revenue.

This idea came from BelugaWilliams’ tweet below.

The advantage of decentralized cryptocurrencies, albeit stressed with high-gas fees, is that creators and developers can maintain ownership of whatever they create.

What does this mean for ethereum?

Given that some users inarguably do prefer networks with lower fees, one possible outcome is that ethereum is overtaken by another, more centralized blockchain.

Although this may feel unlikely, it would be naive to ignore it as a hypothetical future scenario.

Today, ethereum does feels like the dominant chain.

More projects are built on top of ethereum than anything else.

Ethereum has created a rapidly growing application ecosystem.

From NFTs to layer 2 blockchains to lending and borrowing apps, as of right now Ethereum has more developer usage and user adoption than any other blockchain.

  • NFT’s, for example, while largely containing hype infused projects, also contain projects building a genuine community for their members. Surf Punks NFT, for example, is a community centered around surfing, and is even throwing a few wave pool surfing events.
  • Decentralized apps like Sorare enable enable fantasy futbol, powered by ethereum. What’s amazing is that all fees, transactions, and blockchain jargon is abstracted behind the scenes, so that all people experience is a user friendly fantasy sports game with their friends.

Conclusion

Ethereum’s current state is not without risks. The fact that sharding will take until 2023 to implement means that scalability will continue to be a challenge, although layer 2 chains may help segway some of the demand off-chain.

Given Ethereum’s strength, an unknown and unforeseen up-and-coming chain is unlikely to takeover without anyone realizing.

Sure, it is technically possible, but probably unlikely as the network effects of ethereum are growing rapidly.

However, while the new dapp ecosystem is focused on Ethereum, perhaps someone in the world is working to build a true Ethereum killer that will arise from out of nowhere and take us all by surprise.

No one knows for sure.

Sources:

https://polynya.medium.com/is-ethereum-too-decentralized-68a929f255c1

Kickstarter’s move into crypto

Crowdfunding platform Kickstarter announced their plans to build a new decentralized crowdfunding platform that utilizes cryptocurrency and blockchain.

As the cryptocurrency market cap has been trending upwards for months, blockchain’s current popularity means that Kickstarter will undoubtedly benefit from the hype associated with riding the crypto wave.

Kickstarter has been around since 2009. As a company looking to innovate, its not surprising that they’ve chosen to build upon blockchain and crypto.

It is surprising to hear that the new platform will enable Kickstarter to function as an independent organization.

Significance of building a protocol

Kickstarter is not simple re-building their company on top of blockchain technology. The company is building a protocol, on which many future projects and companies may be hosted. This company is 100% distinct and separate from Kickstarter; however, given the affiliation between Kickstarter and their new protocol, Kickstarter will be the FIRST project built on top of the new protocol.

The exciting thing is that once completed, other companies may leverage the same protocol to enable crowdfunding.

Over the history of the internet, many researchers that have innovated and created some of the net’s most impactful protocols have received little if any financial gain from their work (HTTP or TCP/IP, for example).

The problem with this lack of incentive is that it discourages researchers from innovating on existing web protocols and making the internet better. With blockchain, this incentive structure changes.

Tokenization of protocols enables these researchers and creators to maintain direct financial ownership, incentivizing them to continue building and improving upon them.

Kickstarter selects Celo Blockchain

Kickstarter reportedly selected Celo blockchain because it is “carbon neutral”, and more environmentally friendly.

Celo enables the creation of decentralized applications, or dapps.

Celo blockchain is built on top of the ERC-20 technical standard, and leverages the Solidity programming language. This means that Celo runs on Ethereum.

Our take on Celo: With Ethereum’s strength in security and decentralization, Celo effectively borrows these components from Ethereum, while building on top of it and optimizing for scalability and carbon neutrality.

How is Celo a carbon neutral blockchain?

The criticism of some blockchains like bitcoin and ethereum include the fact that the servers that verify the transactions use a lot of energy, which is supplied by coal-burning power plants via the traditional power grid.

This is no different than the electricity used in homes across the United States, or the servers at an Oracle data center. As a society, we still largely use non-green sources of energy.

Its always exciting to see companies that dedicate themselves to building while ensuring environmental sustainability.

I’m not 100% sure how Celo ensures their energy is green, but a few possible ways might be to ensure the energy is produced by solar, wind, hydro, or nuclear. Other possible ways include purchasing carbon credits, or planting trees.

Backlash from users

Somewhat surprisingly, the responses on Twitter from users and self-reported “backers” have not been positive.

With over 1000 replies on Twitter, many user comments on their post are concerned that the majority of value associated with a crypto-based crowdfunding platform will go to investors, rather than creators.

It will be important for Kickstarter to demonstrate their commitment to ensuring the actual creators are able to capture significant value, not just crypto investors.

What’s next for Celo and Kickstarter?

Kickstarter plans to launch a whitepaper in the coming weeks to describe the technology and plans for the decentralized protocol that they will build.

In the meantime, we’re keeping up with the latest on Celo as a member of the Celo community Discord.

Thanks for reading. Reach out to us on twitter and let us know your thoughts.

How Crypto Follows the Hype Cycle

Between 2013 and 2021, Cryptocurrency has followed the Hype Cycle exactly as expected. Let me explain.

What is the Hype Cycle?

The Hype Cycle, coined by Gartner, is a law that describes how humans accept new and emerging technologies and adopt them into our everyday lives

Its a generalized way of estimating and predicting the rise and fall of a new technology and the way people react to it.

Figure 1: Phases of the Hype Cycle Curve. Source: Wikipedia; Olga Tarkovskiy – Own work

The curve above is a graph of TIME on the x-axis, and EXPECTATIONS on the y-axis.

In cryptocurrency, expectations is quantified by looking at the price or market cap of cryptocurrencies. For years, the price of cryptocurrency was not interesting. Price was flat.

Hype Cycle Phase: Technology Trigger Pre-R&D

Crypto wasn’t being discussed all over Twitter. It was a nerdy, boring conversation.

Cryptocurrencies like bitcoin were only being used by a few small groups of people, and was nowhere near mainstream discussion or adoption.

Just look at the market cap of Bitcoin between 2013 and 2017 below. Relative to where it is now, this is extremely insignificant

Figure 2: The market cap of bitcoin between 2013 and 2017. Source: CoinMarketCap

Bitcoin’s price and adoption wasn’t even relevant at this point. Compared to the Hype Cycle phases in Figure 1, cryptocurrency wouldn’t have even been on the charts.

But while the public vernacular and mainstream media ignored cryptocurrency, engineers and enthusiasts were quietly building. On the Figure 1 Hype Curve, at this point crypto is leading up to the R&D phase; it still early.

This is why venture capitalists like Marc Andreessen are famously interested in “what the nerds do at night“. By recognizing emerging tech trends before everyone else, you have the opportunity to invest in them at a favorable discount… when the technology principles have been proven, but the applications have not quite been built, they are not user friendly yet, and the mass majority of people aren’t even aware of the technology.

Vitalik Buterin was funded by Peter Thiel in 2015 to found Ethereum. As the potential applications of Ethereum started coming into light, a buzz started happening within tech circles.

Hype Cycle Phase: Early Adopters Investigate

People started to understand the power of this thing called blockchain, and could envision the possible smart contracts and more.

While Bitcoin was built to serve as digital gold, Ethereum was built as a platform from which blockchain applications would grow.

Coinbase.com became the de-facto place to purchase Bitcoin and Ethereum. It was easy to use and wasn’t that different from purchasing stocks at a place like Fidelity or Charles Schwab.

Working a desk job at a cubicle during this time, it felt like colleagues in the office were all starting to think about crypto and were considering buying it on Coinbase.

A few viral memes and Twitter conversations happened and before you know it, the prices of Bitcoin and Ethereum, the two big flagship cryptocurrencies, were pushing all time highs almost every day.

I hate to include a disclaimer here, but as you can tell, I’m going to be generalizing a lot in this post about the crypto community. I mean no disrespect. I love blockchain technology and the projects it has enabled… I want nothing more than what’s best for crypto as a whole. As an owner of bitcoin, ethereum, and other coins, I’ve seen the emotions of early adopters around me have experienced when the prices rise extremely fast (and inevitably fall just as quickly).

Hype Cycle Phase: Inflated Expectations

Towards the end of 2016 and into 2017, everyone started buying crypto. If you took a 10 minute uber ride across town, you would almost undoubtedly hear your driver mention something about the price of bitcoin.

Crypto millionaires were created. A friend of mine even managed to pay off his student loans from selling his stake in Ethereum, which he had acquired just months earlier.

At some point, it felt like people didn’t necessarily care about the applications of blockchain technology. Your average person was interested in trading, buying and selling, getting rich quick and only focused on the price rather than the underlying technology.

At the peak of inflated expectations, a few things can happen:

Engineering and developer teams tend to over-build. More crypto’s launched between the end of 2016 and early 2017 than anyone could keep track of. But the projects being built were not being used by anyone. The projects had no customers…

What the projects DID have, however, were investors. There was an abundance of over-eager individuals looking to throw $100 bucks into any coin with a slim chance of making it in hopes of returning 1000X on their investment.

The problem with this is that there are more people in the crypto community who are focused on making money from the technology than there are users and customers who are actually using the technology for the value it brings into their lives.

This fixation on price is a problem with the crypto community and it still exists to a large extent today.

Hype Cycle Phase: Trough of Disillusionment

As more cryptos were launched than there were users or customers, the over-inflated expectations started to become apparent.

The thing is, no one knows just how HIGH the peak of inflated expectations might go.

Peak of Inflated Expectations leads into the Trough of Disillusionment. Source: CoinMarketCap

In order to capitalize on investments in crypto, the smart ones on Twitter and Reddit communities preached the importance of holding onto the investments, not selling, and riding out the wave.

The thing is, this is a tricky thing to do. It is easy to decide to sell at the top, and even easier to decide to call it quits as an investment tanks and you lost 80-90% of your the value of your portfolio.

In some cases, those that sell at the top end up exiting while they’re ahead. In other cases, people with intentions to sell at the top end up waiting too long, and end up making an emotionally drastic decision to exit their crypto position at the worst possible time, during the trough of disillusionment.

Because the trough can last for years. In the case of Bitcoin and Ethereum, it lasted from the beginning of 2018 through late 2020.

The thing about cryptocurrency and blockchain technology (at least so far) is that the rise and fall of price of different cryptocurrencies are heavily correlated with each other.

As bitcoin rises, ethereum usually is rising also. As bitcoin enters the trough of disillusionment, ethereum was too. The same can be said for the other crypto’s that made it through the trough.

Bitcoin didn’t really start to enter the next phase until the coronavirus pandemic was in full swing mid to late 2020.

Hype Cycle Phase: Enlightenment to Productivity

Between late 2020 and today, the market cap of all cryptocurrencies has continued to push all time highs.

As of 2021, bitcoin has pushed all time highs. Source: CoinMarketCap

The reason for this may partly have been accelerated by the pandemic, but there’s more to it than that.

Within the crypto community, there is a large amount of funds going into projects that are receiving mainstream adoption.

NFTs (non-fungible tokens) are one example of an application that is seeing close to mass adoption.

Although it is still a fringe hobby, NFT collectibles have some resemblance to the enthusiasm around collectible sports cards and even Pokemon cards.

People are creating NFT masterpieces using artificial intelligence and listing them for sale as unique, one-of-a-kind tokens on websites like OpenSea.

For a fraction of an Ethereum, anyone can go on OpenSea and start collecting their own NFTs.

This is just one example. There are a number of other projects being built on top of Ethereum and discussed but we for many of these applications, it seems we still have a long way to go before mainstream adoption.

So as we’re pushing all time highs in almost every cryptocurrency, my question for the world is: are we entering another peak of inflated expectations? Or is this time for real? Are we truly in the Plateau of Productivity?

And this brings up a few follow up ideas and questions about the future… because at the end of the day, we can’t truly predict the future, we can only form hypothesis based on historic trends, proven laws, and observable principles.

Final Thoughts and Additional Questions

Could a technology go through the various phases of the Hype Cycle more than once?

Will cryptocurrency enter another trough of disillusionment?

How might other technologies follow the hype cycle?

Are there examples of technologies that do NOT follow the hype cycle?

As a technology follows the hype cycle, will the peak of inflated expectations ever over-extend the value of the technology as it reached the Plateau of Productivity?

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The Problem with The Crypto Community in 2021

The Problem with the Crypto Community Today

The community surrounding a token determines what the crypto project will ultimately become.

The community will make or break a cryptocurrency.

Sure, blockchain is the great enabler, but the technology is nothing without the people and the desire to build cool new projects.

Whether you’re a meme coin or a platform coin, the community is what dictates the success or failure of it.

crypto charts are dumb
source: r/cryptocurrency

And the same is true for cryptocurrency as a whole.

There is an overabundance of discussion online (reddit, twitter, discord groups) that focus solely on short term buy / sell strategies.

Surprisingly, it is difficult to find groups eager to engage in discussions about the long-term future of cryptocurrency as a utilitarian and functional technology that can improve human life.

Unfortunate Crypto Trends:

I’m in a small chat group with around 40 members. When I joined the group, I couldn’t help but notice a few disappointing trends:

There is almost no discussion on long-term strategy (even HODLing) in crypto. It is all discussion about trading, buying low selling high, buying the dip, etc.

Most are buying / selling multiple times in the same day, looking at charts with strange lines and who knows what else.

I really miss the “HODL culture”. HODL culture used to be a thing, and it really doesn’t feel like it is anymore. What happened?

There is less discussion about blockchain technology itself.

90% of people haven’t even read the bitcoin whitepaper.

They have no idea what the Double Spend problem is and how blockchain solved it in 2008 when the paper was published..

People brag about their profits from day to day arbitrarily trading coins.

The macro focus, where it exists, focuses on political aspects like how lawmakers are reacting to crypto, tax implications, which big organizations are investing in various cryptos (Tesla or El Salvador news for example).

The discussion almost never focuses on how a cryptocurrency project solves problems in the real world.

The fact that 99% of all discussion about cryptocurrency is catered towards trading isn’t healthy for the technology’s future.

What The Crypto Community Needs

I believe the crypto community needs to focus more on the execution of crypto’s promises like decentralized apps, smart contracts, and Web 3.

Thank God we have something like NFTs are taking off.

NFTs are finally one of the first mainstream applications of blockchain being used that isn’t solely focused on trading – are built on top of Ethereum. And it started with something as silly as Crypto Kitties.

Say what you will about silly artwork being sold on the blockchain – at least its a real application. Its as productive for society as Pokemon.

NFTs have had an impact because they do fit into a real market in the real world – the collection of trading cards and artwork.

Yet even with NFTs, there’s still that huge focus on buying low, selling high, and profiting.

Instead of trading, the people who actually CARE about cryptocurrency need to think about the long term future of these digital assets and bet with conviction in projects they believe in.

This ultimately comes down to the development team, the community, the real world problem that the coin solves.

This is one reason I appreciate assets that make it easier for other projects to be build. Those projects that serve as platforms for other apps in the blockchain arena.

And developers like Vitalik Buterin who are actually focused on building things that impact the real world, not just gaining hype for a coin and selling / trading and pump and dump schemes.

Ethereum is important because it allows other projects to be built on top of it.

It is almost similar to a hosting or infrastructure service for software projects.

In the early days of the internet, the companies that ended up surviving for the long term are those that focused on building the computers, infrastructure, programming languages, databases, servers and more.

As these tools were mandatory for any new internet based project, those companies were destined to be successful.

To figure out which cryptos are going to be successful…. look at the ones that help create a metaphorical “garden” for new projects to form.

Not all seeds will grow, but the garden will live forever.

That’s enough for today.

Leave a reply below and complain about crypto with me.

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SHIB Crypto Community Supports Dog Rescue and Artwork

There are enough projects out there that are actually doing nothing. Admittedly a meme coin, SHIB is building a strong community:

It goes without saying, THIS IS NOT INVESTING ADVICE. Do your own research. We all know that crypto tends to follow the Hype Cycle pretty accurately, so ups and downs are to be expected.

SHIB token mascot
source: happy doggo

Since the SHIB token community is actually helping raise money for Shiba Inu dogs to get rescued and adopted, it separates itself from 99% of the other coins out there.

The SHIB token and community actively promotes the Shiba Inu Rescue Association.

The Shiba Inu Rescue Association is a 501(c)3 non-profit organization. The SHIB crypto community does the service of encouraging members to leverage Amazon Smile, which can donate a portion of your Amazon purchases to the nonprofit.

As fellow dog lovers, when we heard that SHIB crypto community is helping Shiba Inu’s get rescued and adopted, we wanted to be involved. So, yes – we purchased some SHIB token with no intentions of selling for the foreseeable future 🙂

Is the coin garbage? Quite possibly. If by owning SHIB coin, more cute little Shiba Inu puppies are able to find homes, will you regret your ownership regardless of how the price turns out in the long run? Doubt it.

Why The SHIB Token Crypto Community Matters

shib token mascot 2
yep, that’s a bucket of shiba puppies. source: pinterest

SHIB is one of the few communities doing something in the real world.

For that, the community deserves some respect.

The thing about the world of crypto today is that there are a never ending number of new projects and tokens available for purchase.

New crypto projects are launched every. damn. day.

Building a cryptocurrency token on the blockchain has become commoditized.

Although Blockchain can be difficult to wrap your head around, the technology itself is surprisingly simple and elegant compared to the complexities of other types of software.

Development is relatively simple…. the average college student majoring in computer science can write a few lines of code and create a blockchain.

In a market of commoditized goods and services, the one thing that will never be a commodity is the human. People will always determine the value of any cryptocurrency token. The people are the ones that build the community which can create something meaningful.

If you’re looking for a strong cryptocurrency to get on board with, find a token that has a dedicated community.

That being said…..

When two of the biggest names in technology are involved with a project, its a good sign. I’m talking about both Elon Musk (CEO Tesla, SpaceX) and Vitalik Buterin (founder of Ethereum).

Their online publicity for SHIB is another signal for the dedicated and committed community that the SHIB token is building:

Elon Musk Subtweets SHIB Token

Say what you will about shitcoins being overhyped and “pump and dump” schemes. SHIB might even be a scam, who knows… and there has certainly been some big action on the “pump” side.

elon musk tweets about getting a shiba inu

Tweets from Elon Musk about getting a Shiba Inu was likely a subtweet referencing the meme that SHIB as well as DOGE have become.

Vitalik Buterin Gifts $1 Billion in SHIB to India Relief Fund

SHIB token mascot resting his weary head
source: lifehacker australia

Vitalik Buterin was gifted billions of dollars worth of SHIB token, $1 Billion of which he first donated.

But Vitalik had even more SHIB – he only donated 10% of his holdings – and his next move was unexpected.

As seen on Etherscan, Vitalik actually burned the equivalent of more than $12 BILLION in today’s value, since SHIB has appreciated since then.

Vitalik explained his rationale for the whole endeavor in a note.

In the note, Vitalik mentioned that he was “impressed with how the dog communities have treated the recent donations” and focus on “making the world better as a whole“.

For a crypto community, this is quite inspiring to see, and might just restore our faith in humanity.

SHIB Token Artwork

Aside from donating, the SHIB community encourages its members to create artwork.

Its unclear from the website how the artwork is related to the SHIB token, but it can be expected that at some point, NFT artwork may be involved.

There are all sorts of different artwork creations being made featuring the cute little Shiba Inu puppy mascot, just look at a few of them below.

SHIB token community artwork collage

As far as a Shiba Inu coin art incubator, it looks like they’ve started taking applications and we’ll look forward to seeing more exciting creations that the community comes up with.

So, its a fact that SHIB token has had more than a few positive impacts on the world: donating money to India Relief fund, as well as helping raise money for Shiba Inu dog adoption.

And if we’re going to risk betting on a cryptocurrency, we want to bet on one where we know there is at least some good in the world coming of it, because there’s always the chance that we lose our money.

Regardless of whether or not we go to the moon, funds are being raised, and dogs are being helped.

Because dogs are our best friend.

Which cryptocurrencies do you like? Which tokens do you think are actually doing something in the real world?

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What is Blockchain? Simplified Explainer

With blockchain’s level of hype, its a good idea to understand how it will affect our lives.

But many people don’t know what blockchain even is.

Most blockchain explanations use complicated terms like decentralization and consensus.

Instead of throwing around confusing words, let’s make it easy.

“its easy man” 1-of-1 NFT

Blockchains behave like referees

Let’s use an analogy to describe blockchain in simple terms: referees at a football game.

Refs serve as unbiased, independent reviewers, making sure that both teams follow the rules and play fairly.

Depending how high the stakes are, such as during tournaments or professional games, refs can make a lot of money for performing this level supervision.

However, before instant-replays were invented, referees couldn’t possibly catch everything happening in real time.

Even if the refs didn’t want to make bad calls, it was inevitable… There was no way to truly review each play and reach conclusive decisions.

referees serve the game as an independent

Equipped with the ability to review instant-replays, high-definition camera footage, and consult with other referees or analysts, call accuracy has increased.

Referees can watch exactly what is happening in every play, and consult with peers to ensure they make the best possible decision.

At the end of each play and after a decision is made, the game goes on – there is no way to go back and change the call.

How do referees relate to blockchains? (combine with above)

Now, instead of having seven or eight referees, imagine if there were 1,000 refs that reviewed and voted on every single play.

Assuming each ref was able to think independently and abide by the official rules, this would improve the accuracy of the entire decision making process for play review.

Blockchain technology takes this same approach with something called a validator network.

Just like referees review every situation that happens on the field during a game, this validator network reviews and verifies every transaction that happens on the blockchain.

Likewise, once a transaction is validated and published to the blockchain, it cannot be changed.

Let’s cut the complicated stuff:

Blockchain simplified explainer, TL/DR:

When two people trade something, a network (validators) verifies transaction data (aka blocks) before they are added to the transaction record (aka the blockchain).

Blockchain Facilitates Trade

When you agree on a deal and shake someone’s hand, can you trust them?

If transactions happen on the blockchain, then the answer is yes.

Blockchain enables people to form agreements and exchange items of value.

Neither party participating in this virtual handshake can cheat the system because every transaction occurs under the observation of a network of validators — computer code behind the scenes establishing trust.

Everyone in the network runs this code which reviews transactions for errors or malicious intent.

Since transactions are transparent, any attempt at fraud is seen by the network, and will either be corrected or rejected. This ensures that everyone follows the rules and no one gets cheated.

After all the validators on the network approve a transaction, a new block is created and published to the blockchain.

blockchain transactions happen in front of a network of trusted validators.
Each transaction is a virtual handshake.

Blockchains are made of blocks

The transaction data, plus signature of approval from the network, makes up a single “block”.

Similar to an accounting or book keeping system, transaction data stored within a block includes who participated in the agreement, what goods were exchanged, and how much they paid (currency).

Once a block is published to the blockchain, it is there indefinitely. Data cannot be altered.

blocks being added to the blockchain
Blocks being added to the blockchain

Did you know? You can see every single transaction that ever happened on the blockchain.

Instead of happening in private or behind closed doors, blockchain transactions are publicly available.

As new blocks are added, identical copies of the blockchain are updated and distributed to everyone on the validator network.

Thousands of computers (aka nodes) make up the network, and anyone can see transaction data.

Transaction validation happens extremely quickly, and distribution of new versions of the blockchain happens almost instantaneously. [1]

We use new search engines in web3: Block Explorers

On the traditional internet, you look stuff up with a search engine like Google.

In web3, users can view blockchain transactions using block explorers like Etherscan or Polygonscan.

These early stage databases will become the go-to search engines for web3.

Etherscan, the Ethereum Blockchain Explorer

Blockchain validator networks replace middlemen

In the traditional internet, your data is maintained and controlled by individual companies.

Think about how much information you submit when joining Facebook, creating a LinkedIn profile, or even purchasing a flight online.

And how about online commerce?

Marketplaces like ebay.com help people conduct business, facilitating transactions via traditional financial institutions.

When buying or selling something in web2, companies like Ebay control our data and maintain the trust. Ebay verifies the buyer and seller’s identities, and typically charges sellers a fee around 20% of the sale price for these services.

When we pay through Paypal or with a credit card, these companies also take a percentage of every payment.

On web3, blockchain eliminates the need for a middle-man like Ebay, or banks, and Visa.

Blockchain enables trustworthy commerce from one person to another without using services and databases controlled by a single entity. No single organization that can own or control the market.

Blockchain hard-coded protocols serve as the autonomous middleman. The code facilitates the rules of engagement – no intermediaries are involved.

The money gathered from blockchain transaction fees goes to the network rather than a single company.

Blockchains provide cryptographic security

Even if it does use an innovative form of cryptography, security software isn’t sexy.

Instead of being forced to listen to someone ramble on about topics like VPNs, authentication, decentralization, password managers, or Captcha, most people would rather stuff their ears with broken glass.

Check out this EASY summary of cryptocurrency in under 200 words – READ NOW

Although important for the internet, these conversations are not going to help at dinner parties — especially if your goal is to win friends and influence hotties.

As the web3 internet progresses, blockchain interfaces will do their job managing the complicated stuff behind the scenes.

Tools like wallets, fees, blockchains, swaps and bridges will be abstracted away from the user entirely. [2]

While blockchain keeps the internet running as an intrinsic background technology, the way that users interact with web3 will feel seamless, and the complicated stuff will be done under-the-hood.

Users won’t even need to know the blockchain is there, much like the cryptography and anti-virus apps that run in the background on our computers today.

One level up from blockchain, cryptocurrency is reaching mainstream adoption.

Tokens like Bitcoin, Ethereum, Polygon, or Doge may feel risky – there is always uncertainty. But, in some ways, there is just as much risk in not understanding these technologies as there is with being involved and owning just a little bit of crypto.

In 2022, blockchain may still feel like an obscure, fringe idea. My goal with this post was to highlight the essential elements of blockchain and make it easy to understand.

If you found this post helpful, please let me know on Twitter, at espressoinsight.

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Sources:

  1. https://bitcoin.stackexchange.com/questions/110079/how-do-nodes-agree-or-disagree-after-new-block-is-create
  2. https://polynya.medium.com/the-web3-stack-how-web3-will-offer-superior-ux-than-web2-6b8c82709163