With a hiatus of 2 weeks, we are back! Apologies for missing the last 2 weeks, but I accept the fact that we need to be more consistent with our newsletter and be more proactive of any such communications going ahead.
It was a great week for me for my blockchain and crypto learnings as:
I created my own crypto wallet on Metamask (good tutorial here)
Minted my first NFT on Opensea (a marketplace for NFT’s). I couldn’t be more excited about this, as I was thinking of jumping into the NFT universe but didn’t have the courage till date
You can check out the details of the NFT here (big fan of GoT universe - has not seen any season but have read the first 4 books completely)
Bought this classic book from Vijay Boyapati - ‘The Bullish Case for Bitcoin’ (you can buy it here)
In today’s newsletter, I would be covering why DApps are important and some interesting tidbits about blockchain news and events this week. So bring your kettle on, pour some ‘chai’, and let’s hop on…
Why DApps?
In the last issue, I had touched upon DApps as:
DApp = Normal App Front end + Smart Contract Back End
It functions as a normal application but with a different architecture running at the backend. A whole lot of innovations happen in the software and now the crypto world, day-in-day-out, and DApps maybe just a fad going around. So I would like to present below both views: the advantages of DApps, and why haven’t they taken off yet?
⭐️ Advantages of DApps:
Probably you would be hearing and reading this for the 100th time now, but all the advantages that a decentralized system allows are basically the advantages of DApps. To list it again:
Complete data integrity - Data on the blockchain is immutable; any malicious intent to change/modify data is not easy and can be easily caught
Resistance to censorship - No single entity on the network can block users from submitting any transaction, deploying dapps or reading data from the blockchain
Security - No single point of failure as multiple nodes run the entire blockchain and hence they are more resistant to attacks. The existence of multiple nodes also ensures zero downtime for the DApp (you would have probably read of FB and Instagram downtimes in recent times)
⛔️ Disadvantages of DApps:
User Experience - This has become the Holy Grail of any software application currently. Unless you entice the user, engage him/her on the application constantly and make him/her realize the value of using the application, you would never win the software battle. But Dapps score low on this - both for the end-user and the developer. It’s hard to engineer user-friendly experiences currently, one needs a public and a private key to login onto a DApp. Maybe, in the future, if that can be mapped to a single username and a password system, this would cease to be a disadvantage and enable higher adoption from the masses.
Network bandwidth - There are 2 parameters on which blockchains are measured: transaction speed and the fees to execute a transaction (gas fees). Currently, the Ethereum blockchain can process only 10-15 transactions per second and the gas fees are also unpredictable. In the current models of DApp development, if a single DApp uses many computation resources, the entire blockchain network gets congested.
To give a context, the payment processor Visa processes around 60,000 transactions per second.
Thus, we are not quite up to the mark to achieve scale and operate DApps for billion users around the world. There are alternative blockchains springing up to challenge Ethereum on network speed - for example, Solana chain has come up with a “Tower Consensus” mechanism to speed up transactions as well as reduce the gas fees. Solana has been able to process around 50,000 transactions per second and is being considered as a serious competitor to Ethereum for DApp development.
Maintenance and Performance Overhead - This is more from a dapp development perspective; dapps can be harder to maintain because code and data published on the blockchain are harder to modify and hence update as well. Also, there is a huge performance overload if the number of transactions increases, and thus scaling becomes hard. A back-of-the-envelope calculation puts the overhead at something like 1,000,000x that of standard computation currently.
But, again we ask why Dapps now?
I came across the Gartner HypeCycle for Blockchain as an answer to the question - why Dapps now? And I compare the same in Blockchain 2021 vs Blockchain 2019 (didn’t take 2020 because of the pandemic). Do observe the movement of Dapps over the entire curve:
Within 2 years, Dapps have moved from the innovation phase and are inching towards the plateau of productivity. Maybe in 2-5 years, it would become mainstream for us to start using Dapps on a day-to-day basis. As yet, Dapps are hybrid of centralized and decentralized technologies, and thus seem to follow the path of crypto-currencies which are operating in a hybrid economy, alongside local currencies.
Human beings are creatures of habit and it takes some time for us to change and adapt to the new innovations. Dapps are there to be a part of our paradigm, at least on the technological front, but it’s on the user experience side that things should improve for widespread adoption now. Indeed, the question of regulation of Dapss still remains, and it’s clear that there is still plenty of work to be done. But we couldn’t be more excited of us using a Decentralized Twitter or Decentralized Amazon for that matter. Are you?
Interesting Reads and Tidbits of this week:
🖼 NFT’s as Social Networks
Packy McCormick equates NFT’s with social networks and compares them on a framework ‘Status-as-a-Service’ introduced by Eugene Wei, a former product leader at Amazon, Hulu, Flipboard, and Oculus. The framework was introduced as an essay from Wei and is regarded as one of the best essays published on the internet. And the way Packy has built on top of the essay arguing NFTs as the future social networks - a classic case of improvisation and cross learnings. Do give it a read for knowing the History of NFT’s and why you should start exploring more about them.
It was this essay from Packy that pushed me to mint my own NFT on Opensea!
🎨 Artblocks.io
The above ‘Chromie Squiggle #3784 was sold for 750 ETH or $2.5mn!
Literally a new kid on the block in the NFT universe. Would you like an algorithm to create a custom work of art and earn million dollars?
That’s what artblocks.io is all about!
Art Blocks is self-described as a “first of it’s kind platform focused on genuinely programmable on demand generative content that is stored immutably on the Ethereum Blockchain. You pick a style that you like, pay for the work, and a randomly generated version of the content is created by an algorithm and sent to your Ethereum account.” In short, part of the desirability and demand here is purely driven by the fact that you only have a high -level perspective of the art that you’re paying for.
It’s almost like the feeling that an algorithm custom-made your own piece of art.
📚 Closer home, a commentary on India’s budding crypto eco-sytem
In this great post, Aviral from A Junior VC lays down the history and geography of India’s crypto eco-system. With 2 crypto-unicorns and huge software development activity, Aviral and his team asks and answers this question - ‘Is this the watershed moment for India’s crypto eco-system?’ Do give it a read if you are also bullish on India and blockchain as a whole.
That’s for it today folks!
Sources:
https://medium.com/swlh/the-case-of-the-dapps-future-or-fad-410a4bd40f33
https://medium.com/@genesishack/know-your-track-dapp-decentralised-applications-1e1e0d29cc88
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