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Blockchain 101 (and the protocols that use it)

Angie Jones on September 26, 2021

Lately, I'm hearing a lot about crypto, blockchain, bitcoin, Ethereum, smart contracts, defi (decentralized finance), dapps (decentralized applicat...
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hammertoe profile image
Matt Hamilton • Edited

Angie, this is a great primer. I know when I started in machine learning I was in the same situation. Every post assumed I knew the terminology, most of it statistics based (What the hell is "regression"?!). That is actually what got me into DevRel in the first place, trying to answer the question "What would I need to know as a developer new to ML?".

As for blockchains, another good one to look at is the XRP Ledger, which was the 2nd major blockchain after Bitcoin. It was designed to be "bitcoin but without the energy requirement of proof of work", and thus uses a much more efficient consensus protocol. One of the key features that the XRP Ledger brought to the field was a decentralised exchange (or "DEX") which allows you to trade one asset with another on-chain, without needing to use a centralised exchange (like Coinbase). So again, you get the benefit of no-one can tell you whether you can or can't trade.

And to go with that DEX it also was the first blockchain to allow tokenisation of other assets, e.g. USD, EUR, CNY, BTC, Gold, airline miles, art, etc. Fiat-pegged stablecoins are often referred to as "stablecoins" (as their value is stable against the fiat currency, e.g. USD or EUR). Tokenising other cryptocurrencies on another blockchain is often referred to as "wrapping" them, as some blockchains require the use of a smart contract to keep track of balances.

Put this all together and you have the basis of the "Internet of Value", the ability to universally move "money" from A to B. Regardless of the form that takes. I can pay you 100 USD but fund that payment with EUR and the XRP Ledger will automatically exchange it from one currency to another as part of the payment.

You can find more info about the XRP Ledger at xrpl.org/

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Lyle Troxell

This is an absolutely wonderful compleat and concise write up, I plan to send this to others. Thank you.

I’ve covered crypto and coin for a while on my tech podcast (I think our first episode on it was in 2013). And I was bullish early on.
But lately my take is that there is too much waste and miss-aligned incentives to get much good (for society/people) out of the blockChain tech at this time.

I’m looking forward to your upcoming posts on this.

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Mango Cat

This is a great start, but beware of leaps of faith like: "With decentralized networks, we get transparency, freedom, and security.". To some extent, proof of work (Bitcoin and similar) has delivered on this promise, but at an extremely high price in energy. Proof of stake promises to slash the energy costs, but puts control explicitly in the hands of the majority currency holders who likely won't abuse that power, at first....

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Angie Jones

so those are cons but they don't negate transparency, freedom, or security. these things just come at a cost. right?

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Mango Cat

The enthusiasm for the money (some) people are making on Bitcoin has completely overshadowed the tremendous energy cost. At least the public discourse is starting to acknowledge it recently, but it has been a huge problem since 2013, inherent in the same system that made Bitcoin popular in the first place.

Transparency is true, even if some coins like Monero attempt to claim anonymity - simply using Monero and similar coins marks you as suspicious, just like showing up to a Pawn shop carrying a stereo recently ripped out of a car. Transparency in blockchain is (IMO) a great thing, but it is also radically revealing as compared to cash. Every transaction, ever, recorded permanently and irrefutably. I don't think the radical difference of that from the current status quo has really sunk in for a lot of the enthusiasts. Visa and MasterCard track you, but not like cryptocurrency does, and their records aren't open to the public all over the planet.

Freedom, lasts as long as government says it does. Ask China. Once cryptocurrency is criminalized, only criminals will use cryptocurrency. Sure, it will be hard - maybe even impossible - to stop people from using cryptocurrency, but there is a huge difference between open trade sanctioned by law enforcement and underground black market usage.

Security... I'm not 100% sold on this one, either. You may think the government can't seize your cryptowallet. Wait 10-20 years and see what all they can do. In a proof of stake world, where governments hold majority stake in the major cryptocurrencies, they can pull all the same levers they pull today - even faster and easier - in terms of freezing of assets.

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hammertoe profile image
Matt Hamilton

There is always the $5 wrench attack. And governments can always legislate to make your life uncomfortable if they want.

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Mango Cat

Believing they won't is naive. The large centralized ( don't kid yourself, Bitcoin, Ethereum, Ripple, etc. are easy targets for legislation, if not physical seizure ) value chains are targets for regulation.

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Matt Hamilton

Indeed. Despite the actual blockchains like the XRP Ledger being decentralised and near impossible to seize funds from, if I get chucked in jail and told my only way out is to give up my private key....

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Victor Eke

Overcomplicated tutorials and these assumptions is probably the reason I haven't picked much interest in web3 and blockchain technology.

Great article @techgirl1908 , thanks for explaining this in detail. 💯

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Meagan

This is a fantastic write-up! Thanks for sharing Angie. Would you be interested in joining our Discord? We are building a startup incubator and accelerator for Web3 and blockchain companies; I think our community would benefit from having you onboard. discord.gg/RSh6bcHn

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Bruno Paz

Very well written Angie. Thank you!
For someone like me who is also getting the first steps into understanding all the technology and concepts behind crypto/web3 , this is really usefull.

I never really had much interest into this until few days ago, but as I dive deeper, I am finding that there are really cool projects being done on this space.

I recommend everyone to keep an open mind ;)

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Javier Gonzalez

Lol Angie, you open up a can of worms once you make any content related to cryptocurrencies, everyone and their mothers want you to do a deep dive into the specific token which they wish to accrue in value. Thank you for the primer, good to see other (traditional) developers in this space. By the way, one other thing that is awesome in crypto, smart contracts are almost exclusively written in a TDD way, just the nature of the beast.

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Angie Jones

TDD you say??? wow, I'm intrigued

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Emmanuel Steve

Nice read 👏👏

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𒎏Wii 🏳️‍⚧️

Nice article; but I'm a bit sad that there's not a single mention of git :D

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Angie Jones

where does git fit into this?

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Matt Hamilton

In some ways git is one of the original blockchains. Think about how commits are stored and referenced.

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𒎏Wii 🏳️‍⚧️

Exactly this. Git stores commits as hashed blocks, and each commit has a reference to the hash of its parent commit.

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Sia

This was as nice as a convo with you Angie! I have pinned it because there are so many rabbit holes to revisit. Thanks for making this less intimidating to start learning 🤩