If you haven’t heard about cryptocurrency by now, I’d love to sit down with you. Terms like cryptocurrency, blockchain, NFT, Bitcoin, mining and so on have become rather popular. While still considered some what of a subculture, depending on who you ask, I don’t think it will be going away anytime soon, even though it isn’t yet mainstream.

So, what is the blockchain and cryptocurrency? How can one delve into the world of buying coins, tokens and NFTs? Let’s start slow and walk before attempting to run a 4-minute mile.

The Blockchain
Most definitions say the blockchain is a digital, distributed and immutable ledger or some variation. What that boils down to is a network that is distributed (not central), immutable (cannot be altered) once executed and creates transparency because transaction information is available to everyone. In another way, digital information about assets is stored in blocks and each new block attaches itself to the previous blocks to form a chain.

Blockchains can either be public or private. There’s also a concept of consortium blockchains but won’t get into that. Some organizations have adopted private blockchains for things like supply chain management while public blockchains (Bitcoin, Ethereum etc.) are the ones we all know and love…. some days. Every blockchain has a native coin that you’ll need in order to transact in that ecosystem. Some examples of chains and coins:

• Bitcoin (Bitcoin)
• Ethereum (Ether)
• BNB Chain (Binance Coin)
• Polygon (Matic)

Many blockchain ecosystems usually have hundreds, in some cases thousands, of cryptocurrencies built on the native chain referred to as tokens. Popular (or once popular) tokens include Safemoon built on Binance, and Shiba Inu built on Ethereum. Dogecoin despite its meme status actually has its own blockchain, although it remains a meme as there is no expected utility from its developers. 

How it started
As early as 1991, blockchain technology was conceptualized. It wasn’t until 2008 that it became known when Satoshi created Bitcoin as a peer-to-peer electronic cash system (the first cryptocurrency), based on Haber’s 1991 research. Satoshi Nakamoto, the developer of Bitcoin is an unknown entity as it could be a person or just a pseudonym used by a group of people.

The blockchain has developed a subculture for those who distrust the institution, like the idea of decentralizing finance, those who want anonymity, among others. Since then, more people have ventured into this space by way of cryptocurrency and more recently NFTs and the prospect of profits they can offer.

How has the blockchain use case evolved?
Since it’s inception as a digital currency, that resulted in 10,000 BTC being used to buy pizza, the value of Bitcoin has increased drastically, to as much as US$69,000 for 1BTC at it’s peak. Beyond that, thousands of other cryptocurrencies have been created since along with other types of use cases.

• Web3: Considered the next iteration of the internet, the idea is to build applications and services on the blockchain which removes control from the 1% that control the Web2 space. Think of social media and the control that companies like Facebook and Twitter have and how little is known, as compared to an application built on a public blockchain where transactions are immortalized on chain and cannot be refuted.
• NFTs: Non-fungible tokens are a form of digital asset. Unlike Cryptocurrency, NFTs are not considered currency. Instead, depending on the blockchain the NFT was developed on, you’ll require the native coin from that blockchain to purchase these assets. NFTs are often associated with ownership of digital art and collectibles, however a lot of projects have been creating utility such as gamification, exclusive access to and ownership of music and real-world experiences to name a few. Bored Ape Yacht Club (BAYC) is essentially a digitized version of a country club with exclusive membership by way of owning the BAYC NFT if you have at least USD$90,000 to snag one.
• DeFi: Decentralized Finance which in principle is a rebellion against traditional finance as a way to take back control. Traditional finance requires leveraging the banking system for financial transactions which is heavily regulated and fee based. Think of countries like Venezuela that have acknowledged Bitcoin as legal tender, which allows citizens to transact without ever needing a bank.

The expanded use cases for the blockchain are powered by smart contracts which is developed code that enables digital contracting. In NFTs, all the traits for the images are built into the contract, which randomly combines to generate the various collection images. If there is added utility, the smart contract will include certain conditions that will get triggered when met. This is usually done through interactions with Web3 applications.

There’s a lot to unpack when exploring the world of blockchain, so strap in and join me on this journey of discovery. Articles will dive deeper into the topics that have been introduced (Web3, NFTs, Cryptocurrency etc.) including how to transact, interact, join communities, use tools like a pro and read the blockchain. There may even be smart contract development along the way. That last one isn’t likely but anything is possible.