Preface

In this “Blockchain learning note” series, I will cover the basic knowledge of blockchain and web 3.0. Aim to give newbie like me gain general knowledge about this exciting field. This is the 2nd episode (see

). I will talk about what is Smart Contract, Network, and DApps. Let’s get started 🚀

Smart Contracts

What Are They?

Smart contracts are self-executing contracts with the terms of the agreement directly encoded into code. They automatically execute when predefined conditions are met. Written in specific programming languages designed for blockchain environments, such as Solidity for Ethereum, they inherit the blockchain’s properties of immutability and decentralization once deployed. This means that after deployment, they cannot be altered, ensuring reliability and security.

Roles

Smart contracts enable the execution of agreements without requiring trust or reliance on third-party intermediaries. This is due to their immutable and transparent nature. They also act as a stateful backend for Decentralized Applications (DApps), with their own unique addresses functioning similarly to URLs of API endpoints. DApps often embed their business logic within smart contracts and create frontend interfaces for user interaction, mirroring the structure of conventional applications but in a decentralized context.

Blockchain Networks

Bitcoin

The original cryptocurrency network, primarily used for peer-to-peer transactions. Bitcoin, utilizing Proof of Work (PoW) as its consensus mechanism, is renowned for being the first blockchain network. However, it has limitations in high throughput handling and does not natively support smart contracts. Its design focuses on security and decentralization, influencing the development of subsequent blockchain technologies.

Ethereum

A leading network known for introducing smart contracts to the blockchain world. Ethereum’s native cryptocurrency is Ether (ETH), required for transaction fees and smart contract deployment. Initially using PoW, it is transitioning to Proof of Stake (PoS) with its Ethereum 2.0 upgrade to enhance scalability and reduce its environmental impact. Ethereum has become a pivotal platform for DeFi (Decentralized Finance), NFTs (Non-Fungible Tokens), and a vast ecosystem of DApps and ERC-20 tokens.

Solana

Designed for high throughput and fast transaction processing, Solana stands out for its speed and efficiency. It employs a unique combination of Proof of Stake (PoS) and Proof of History (PoH) for its consensus mechanism. This architecture aims to address the blockchain trilemma of achieving decentralization, security, and scalability. Solana supports smart contracts and hosts a wide range of applications, from DeFi to NFTs, making it attractive for projects requiring rapid transaction capabilities.

Decentralized Applications (DApps)

What are DApps

DApps are applications that run on a decentralized network, as opposed to traditional applications that operate on centralized servers. This decentralization ensures that no single entity controls the app. While DApps can have front-end interfaces hosted on conventional web servers, their core functionality is powered by smart contracts on the blockchain. This setup enhances security, transparency, and trust.

Applications

DApps have opened up a wealth of possibilities across various sectors, including finance (DeFi), gaming, social media, and more. Examples include gaming DApps where players can earn cryptocurrency, and financial apps that allow for trustless trading of assets on the blockchain. This innovation represents a significant shift in how applications are developed and utilized, leveraging blockchain technology for a more open, transparent, and user-empowered experience.