What is Blockchain?

What is Blockchain?

Blockchain Basics Series [ 1 / 8 ]

These are my learning from the Patrick Collins Course over at updraft.cyfrin.io

1️⃣ What is Cyfrin Updraft?

It is a platform where Patrick Collins teaches Blockchain.

He has already taught this HardHat course on the YouTube channel FCC (Free Code Camp). He is a blockchain developer, smart contract engineer, and security researcher.

He is also a co-founder of smart contract auditing firm Syphron.

Smart contract developers are having massive demand with an average salary of $145,000 per year.

Let's begin!

🔗 What do we mean by Blockchain?

You might know "Bitcoin", which was one of the first protocols to use this technology of Blockchain.

It was proposed in the Bitcoin whitepapers by Satoshi Nakamoto.

This enabled peer-to-peer transactions in a decentralized manner. This network used cryptography and decentralism. Due to this Bitcoin is also referred to as the Digital Gold. There is a fixed amount of Bitcoin, just like that of gold.

If you want to get Bitcoin Whitepapers: Click Here

💻 Ethereum and Better Smart Contracts

In 2015, Vitalik Buterin introduced Ethereum which used the same architecture as Bitcoin with additional features.

Anyone can create decentralized transactions, organizations, and agreements without a centralized intermediary on ETH, using Smart Contracts.

Smart Contracts are a set of instructions executed in a decentralized way without the need for a centralized or third-party intermediary.

But, there is a huge issue with smart contracts.

Blockchains by themselves can’t interact with the data provided to them.

This Problem is known as the Oracle Problem.

🪐 What are Blockchain Oracles?

To make smart contracts more useful and capable of handling real-world data, they need external data and computation.

Any device that interacts with the off-chain world to provide external data or computation to smart contracts is known as an Oracle.

We need multiple Oracles to actually stay decentralized because your on-chain logic can be decentralized but also the off-chain logic should also be decentralized.

To maintain decentralization, it's necessary to use a decentralized Oracle network rather than relying on a single source. This combination of on-chain logic with off-chain data leads to hybrid smart contracts.

Hybrid Smart Contracts = on-chain agreements + off-chain agreements.

To learn further about Oracles, visit this link: Click Here

🍊 What are L2?

You might have heard this term "L2" or "Layer2", what are they?

Layer 2 solutions in web3 are technologies built on top of a blockchain (Layer 1) to improve its scalability and efficiency. These solutions handle transactions off the main chain, reducing congestion and fees, and then settle the final state on the main chain.

L2 or Layer2 is an advanced version of the Layer1 blockchain. It solves the problem of Scalability by either two true Layer2:

  1. Zero Knowledge Rollup

  2. Optimistic Rollup

📱 What are Dapps?

Dapp (Decentralized Application) is an application that runs on a decentralized network, typically a blockchain. It is powered by smart contracts and operates without a central authority. Dapps can serve various purposes, from finance to gaming. Example: Uniswap, a decentralized finance application.

So, the question which will arise in your mind would be

📊 What is difference between Web1, Web2 and Web3?

In basic words

Web1: The permissionless open-sourced web with static content.

Web2: The permissioned web, with dynamic content. Where companies run your agreements on their servers.

Web3: The permissionless web, with dynamic content. Where decentralized censorship-resistant networks run your agreement and code. It generally is accompanied by the idea of user-owned ecosystems, where the protocols you interact with you also own a portion of, instead of solely being the product.

This was it for this article folks!
See you in the next section. 😎