Tag: ethereum

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.

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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.

What to read next?

  • Intro to crypto in under 200 wordsread now
  • Why Ethereum matters – read now
  • Allocating funds between NFTs and ETH – read now
  • Best podcasts about crypto and NFTS – read now
  • 16 free tools to analyze NFTs – read now

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