August 3, 2022
Bitcoin and other cryptos are blockchains, right? So what's a blockchain? You can imagine a big (but not super big, still under 1TB) "public thumbdrive" that always lives in The Cloud, but there’s no delete, because the files are all linked together in a chain. So a blockchain is basically an extremely secure file folder that's unerasable.
The two main functional parts of a blockchain are the linked records and the computer system that runs the blockchain app to link them together. Crypto miners have teams of computers that turn electricity into chains of records. The entire worldwide mining effort works on the same block until it’s secured (by complex math), then the next block is begun and its data are linked onto the chain.
Bitcoin appeared in forum posts in 2008, gift of a mysterious author; in 2014 the Ethereum recipe for ‘smart contracts’ was published, and it’s a big deal because it makes these newer blockchains programmable and smart, unlike Bitcoin. Ethereum basically turns the idea of crypto into a software developer toybox: those linked records work to store data but they now also work like tokens of pure code, and can act like not just money, but also documents, images, game pieces… This is amazing yet also scales very poorly, which has encouraged the invention of superior blockchain designs based upon Ethereum’s recipe. The most promising of these is Elrond.
While Bitcoin is the original cryptocurrency, Elrond is already erupting into an ecosystem-- something more like Amazon or Microsoft! Crypto developers write DApps (Distributed Apps) and publish these onto Elrond’s mining network, which plays the part of a fast, trusted data layer. Elrond and other smart chains are becoming a separate zone within the existing internet, and this is the buzz you’re hearing lately around “web3”. The Maiar App works as a wallet for Elrond’s currency, EGLD, and it shows any NFTs you own.
“Non-Fungible Tokens” are “niftys”, media stored on chain. Elrond is famous for NFTs because they work so well compared to Ethereum’s and other rivals’. While the market value of some NFT art can make this new tech seem like a frivolous fad, it’s actually a practical innovation to crypto and will be mainstream one day.
Why are NFTs a game changer? Because one in your wallet can allow access to members’ only apps, or special features on public websites without a password. Because as a store of value, it is secured with multiple factors and can be sold from any online smartphone; it can be sent internationally, in seconds. Last century, computers offered big improvements to banking, but the average bank user didn’t notice those advantages until ATM cards showed up; now NFTs offer big improvements to crypto but the average crypto trader still hasn’t noticed, and doesn’t see these advantages!
But now you understand some core and some cutting-edge concepts about both traditional crypto assets like Bitcoin and Dogecoin, plus the smart contract chains like Elrond and Ethereum where people create collectibles (NFTs), and interactive worlds (the metaverse). Owning crypto on a blockchain is similar to holding money, yet it can also be like owning a piece of media or an app because smart contracts turn crypto into useful code tokens.
Combased builds on Elrond, Polygon, and other chains to bring business value to our clients. We succeed when we help people join this incredible web3 revolution!