Through my recent learning about blockchain, I have gained more knowledge about it. Today I would like to share some more of the most basic and current topics in the blockchain space, which I think is worthwhile for a blockchain novice to learn.
Bitcoin, Ethereum, Crypto, Smart contract, and DeFi
Bitcoin is an electronic currency, or rather, the first blockchain-based cryptocurrency. Cryptocurrencies can be considered digital currencies that are protected by cryptography and are usually decentralized systems based on blockchains. Bitcoin uses this system, making it possible to have transactions without going through a centralized institution, such as a bank, yet be more secure and trustworthy. If Bitcoin is Blockchain 1.0, Ethereum is often referred to as Blockchain 2.0. Unlike Bitcoin, Ethereum is an open decentralized software platform [1], which means it can be used to create many decentralized applications beyond digital currency. Ethereum uses smart contracts to achieve this. While Ethereum also has its own cryptocurrency, Ether, it is more like used to build and run decentralized applications. Many decentralized applications are now running on Ethereum. Programmers can use Solidity, the programming language that comes with Ethereum, to write smart contracts to be used in decentralized applications. This is the same technology I need to use for this capstone project. Finally, I think DeFi is a unique branch within decentralized applications, i.e. using decentralization to provide various financial services. For example, there are a lot of hot applications like Uniswap, Sushiswap, MakerDAO, which allow people to trade and borrow money in a different way.
NFT
NFT is also a hot topic these days. The most I’ve heard people discuss is about NFT artwork being sold for astronomical prices, such as the 5,000 paintings created by Beeple being sold for a whopping $69.3 million [2]. And the earliest thing I’ve heard about NFT is CryptoKitties, a game that runs on Ethereum and allows people to have online cats. And speaking of what NFT actually is, its full name is Non-Fungible Token. It is actually a digital asset that is used by people to represent ownership of items because each NFT is unique and can only have one owner at a time. There are many popular NFT platforms on the market today, such as OpenSea, Rarible, etc. Many of these applications use NFT to represent ownership of artwork, collectibles, music, sneakers, etc. I think that outside of art and collectibles, NFT also has a great future and can be used in many more practical and relevant to people’s daily use scenarios.
DAO
The full name of DAO is Decentralized Autonomous Organization, which refers to an organization without a centralized leader. Unlike the organizations we usually come across, a DAO is an organization that is jointly managed by its members, and all members can participate in the organization’s decisions, while the content of the decisions can be automatically executed. This also relies on smart contracts. Usually people establish the rules of a DAO through smart contracts, and the voting rights are distributed through the ownership of tokens, and the people who own the tokens can participate in the decision making. After the decision is voted on, the smart contract is automatically executed according to what has been set. Such a management model is completely transparent, which greatly ensures that the decisions are fair and always in the interest of the majority of the organization. Many decentralized platforms are now also starting to use DAOs for autonomy, for example, Uniswap has added DAO to allow users to govern Uniswap[3]. I believe that DAO will also be a very hot topic as decentralized applications continue to spread.
In general, blockchain is evolving fast and there are always many fresh ideas coming up, we must keep learning to keep up with the speed of blockchain development.
References
[1] https://www.investopedia.com/articles/investing/031416/bitcoin-vs-ethereum-driven-different-purposes.asp
[2] https://www.forbes.com/advisor/investing/nft-non-fungible-token/