It’s been two months since I first took the plunge into the chaotic yet mesmerizing world of blockchain. I always have a hunch that it is a subject worth looking into, but just never quite found the time. Thanks to Covid-19 and the luxury of some down time during Lunar New Year, i finally took the leap of faith.
Here’s the summary of my learnings of this technology thus far two months in. I thought I would break it down to easy to digest bullet points for interested people to read and for my future-self to laugh at my current-self level of ignorance.
Technical stuff
Always start with the foundational understanding through books. Highly recommend reading The “Bitcoin Standards” to understand concepts of sound money and why the Author thinks Bitcoin is a great candidate for sound money. You can read the summary of the book here.
Bitcoin and Blockchain are two related yet totally different concept from applications perspective. Blockchain is the mother, bitcoin is the first legitimate child. Ethereum is the prodigy son, for now.
To understand the basic blockchain concept, you have to understand the concepts of: proof of consensus, cryptographic hash and distributed ledger.
Trust-less is essentially what blockchain is here to solve. A way where we do not have rely on trust between humans to humans or humans and a centralized third party to conduct our transactions.
Smart contracts are basically digital vending machines, where you have a predetermine hardware and software setup that upon input A, will compute, verify & check with its ledger that 1) the input is valid, 2) there is available goods that match with the request, upon satisfaction, the machine produces B, and charges a small fee C. The machine also protects the goods and money before, during and after the transaction.
DeFi (Decentralised Finance Apps) using money legos are one of the most exciting development and use-case of composability aspect of smart contracts. Think lending & borrowing without a central bank, flash loans without the pawn shops, derivative trading without the central exchange and much much more.
DAOs (short for Decentralized Autonomous Organizations), also operate on smart contracts, are essential some form of community or company governance operate based on the rule of code and voting mechanism. Not all internet based business should be operated as a DAO as there are severe tradeoffs when it comes to decision making.
There are many types of tokens, they can be security of the blockchain companies and its governance mechanism, an operating currency, a immutable certificate of an asset and more.
There is no such thing as the perfect technology, blockchain included. In my usual world of real estate development, the three elements in constant tradeoffs are: speed, quality & cost. Pick 2.
In blockchain, there is always a compromise between the three elements: security, speed / scalability and decentralization. Pick 2.
Different methods of reaching Proof of consensus is the product of optimizing for whichever two sides of the triangle.
CeApps (Centralized) and DeApps (Decentralized) blockchain applications both have their use cases. I personally think Ce is the “gateway drug”, and De is “nirvana”. One has to exist in order to achieve the other. For new users like me, start with Ce: CeX, CeFi, CeWallet etc
NFTs – short for non-fungible tokens, as a method to tokenized what essentially is an immutable birth certificate of an asset along with other bells & whistles on top. Albeit all the hype, this blockchain application will be here to stay due to its practical use cases such as proof of ownership, uniqueness, transferability for many assets both physical and digital.
Medium, Podcasts and Substacks blogs are your friends (and your nightmares when you cannot understand what the f*** they are talking about and still read on anyway). Follow Bankless, Defiant, Liquid, Coinmonks, and Concoda. I have an ongoing blog post that updates Beginner’s Resources to blockchain here.
Here’s my favourite podcast playlist so far. I will continue to add more shows to this list as I come across and listened to them.
The weird stuff
I do not understand the crazy prices some people are willing to pay for a cryptokittie or worse, a cryptopunk. At least the kittie is cute.
Crypto-natives are always hungry for more coins. There is no shortage of hunger-inducing coin names like: PANCAKE, SUSHI, MOON, WHALE, BEEFY, BAKERY, BURGER, YAM, KIMCHI…
Shilling (pronounce similar to chilling) is not a british coin and is the opposite of chilling. It’s describing people actively yet covertly hyping, promoting and inflating the value of a coin.
ICO, IDO, IEO, STO, IICO, ISA…are all acronyms to explain the process of selling a crypto project to the public.
Farming is not what you think, and it could be the best financial engineering lesson one can learn. Think MLM or Ponzi. Sure you might still need shovel in both cases.
Few too many people say they are in it for the technology, but I think they are in it for making quick money…or for the memes.
After 100 hours after Podcasts & Youtube Videos, 100 hours of reading Medium Articles & Substacks, I can safely say I barely scratch and understood the surface of blockchain and its implication and i still cannot explain blockchain to a 5 years old.
Yes, it is certain that blockchain cannot and will not solve all problems. However, this much I know for sure, Blockchain and its philosophical & technological implications will be one of the critical technology that will have world changing impacts.
I plan to roll up my sleeves and take part in blockchain projects to experience first hand what is it like to build a blockchain products solving real business problems. If you have projects that you want to bounce around, please let me know. I’m reachable via FB, LinkedIn & e-mail.
Lastly, all the above are not investment advice, keep calm and hodl!
Cheers for sharing your thought, you just got yourself a new spotify follower! Didn’t expect to read such dried subject in much wit
P/s just wondering, by explaining blockchain to a 5 years old did you use your child 😂
Thanks Khai. No my child is yet to be 5, so i’m preparing for that day 🙂