27 episodes

Block Shots provides a basic understanding of the most important blockchain concepts in five minutes. Learn blockchain, consensus, hashing, signing, governance, nodes, etc. and many more fundamentals while having your morning coffee, commuting, or whenever you've got a moment.

episodes.blockshots.fm

Block Shots - Blockchain in 5 minutes‪!‬ Gautam Dhameja

    • Technology

Block Shots provides a basic understanding of the most important blockchain concepts in five minutes. Learn blockchain, consensus, hashing, signing, governance, nodes, etc. and many more fundamentals while having your morning coffee, commuting, or whenever you've got a moment.

episodes.blockshots.fm

    Episode 27 - Liquidity Pools, Swaps, and Yield Farming

    Episode 27 - Liquidity Pools, Swaps, and Yield Farming

    Financial services are generally based on transfer of funds between parties. For example, when we borrow money from banks that money is deposited by someone. They earn interest for depositing their money, and we pay interest on the loan. The money moves between the depositor and borrower through the bank. On a larger scale, many people deposit money at the bank and the bank then lends that money to potentially many borrowers. 

    This involves the bank to manage large amount of currency, which, in turn, allows the bank to provide several financial services (forex, etc.). The bank basically pools money from many depositors to create a liquidity pool. The bank is also a centralized service provider.

    Now let’s try to apply the same concept to decentralized systems. To provide financial services using decentralized applications — also known as DeFi or Decentralized Finance — users deposit (lock) their tokens in smart contracts to help create liquidity pools. Borrowers then borrow these tokens as loans and pay interest. Depositors earn interest for locking their tokens. 

    Liquidity pools are the basic building blocks and enablers for financial services in the DeFi space. In addition to simple lending, liquidity pools are also used in decentralized exchanges for token swaps. In such setting, the pools are maintained in token pairs so that users can easily swap or exchange their tokens with other tokens. The fee charged for the swap is (partly) distributed among the pool contributors/depositors.

    The term for earning from contributing to liquidity pools is called Yield Farming. Users lock their tokens or token pairs in DeFi smart contracts and, in return, earn tokens. These could be some percentage of the same tokens and/or DeFi app specific tokens. Several DeFi apps provide features and strategies for users to maximize their yield by locking their tokens in multiple pools.

    Music: https://www.purple-planet.com

    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit episodes.blockshots.fm

    • 4 min
    Episode 26 - Decentralized Finance (DeFi)

    Episode 26 - Decentralized Finance (DeFi)

    Decentralized Finance is more of a field comprising platforms, standards, and applications focused on providing financial services using decentralized technologies.

    Generally, when it comes to traditional financial services, we deposit savings, borrow money, buy insurance, etc. Most of the time we interface with financial institutions that govern the terms and and conditions of these services. The process is like a black box, too opaque considering money matters. We, as users, do not have a lot of control over how our money is being used by financial institutions.

    Also, there are too many steps involved in the processes of applying for and receiving these services from traditional financial institutions.

    What if these financial services became more transparent so that we have full visibility about your money? Also, what if you don’t have to fill a lot of forms just to get a small loan?

    This is what DeFi intends to solve. It allows you to have visibility about your money, gives you a right to say where your money goes, makes many things possible without too much paperwork, and so on.

    In simple terms, DeFi applications comprise value-bearing tokens, governance tokens, financial equations, and terms programmed in smart contracts. Using these smart contracts and DApps based on them, some users deposit their tokens in liquidity pools and others borrow them and pay interest. Similarly, other financial services like insurance are built on top of these smart contracts.

    Music: https://www.purple-planet.com

    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit episodes.blockshots.fm

    • 5 min
    Episode 25 - Multi-Signature Wallets (MultiSigs)

    Episode 25 - Multi-Signature Wallets (MultiSigs)

    Every transaction in a blockchain is signed by the sender. The signing of transactions is done using cryptographic signing algorithms, as described in episode 6 of the podcast.

    In some scenarios, to perform an operation on the blockchain, there is a need to have more than one signatures on a transaction. Think of bank accounts with joint holders. Similarly, blockchain wallets could also be owned jointly by a group of accounts. These wallets are called multi-signature wallets or multi-sigs.

    Multi-signature wallets are generally implemented using smart contracts. One of the smart-contract function acts as a gatekeeper for other functions and keeps track of the number of accounts needed to call a function. Once enough accounts have called this gatekeeper function, it then forwards the call to the intended function. This is how, in simple terms, multi-sigs work.

    Because they are implemented using custom logic on the blockchain, multi-signature wallets can have any combination of signatures configured to use. We can have a threshold, majority, super-majority, specific accounts, and many other kinds of signature configurations in multi-signature wallets as per the need of our application.

    Multi-sigs are useful in scenarios where a joint decision is needed to make a transfer or execute a function on a blockchain. For example, the transfer of funds from an organizational account where all or some of the board members must sign the transaction individually.

    Music: https://www.purple-planet.com

    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit episodes.blockshots.fm

    • 4 min
    Episode 24 - Initial Coin Offering (ICO)

    Episode 24 - Initial Coin Offering (ICO)

    Generally, to start a technology business, there’s some initial funding required to build the product. Generally, this is done using conventional ways like VC funding or bank loans. The VCs give money and they take some ownership in the company.

    There is another way of funding, called crowdfunding. Instead of asking a few VCs and/or banks to give you money, you ask a large number of people to fund your startup and in return, you either give them stake or a right to use your application.

    One way of doing crowdfunding is by doing an Initial Coin Offering, better called ICO. In blockchain applications, the developers create tokens so that their users can spend them to use the application. Selling these tokens is a way for the developers to get paid for their work.

    In an ICO, these tokens are offered in advance, as a future right to use the application when it is ready to use. To do an ICO, the founder of a blockchain startup generally writes a white paper to detail their idea and its implementation. If the users find the application useful, based on this whitepaper, they purchase tokens to use this application in the future. This purchase of tokens helps the founders to get initial funding to build the application.

    If the application becomes successful then the tokens have a lot of demand. The users who acquired these tokens in the ICO can then make profits by selling them at higher prices because of the demand.

    Music: https://www.purple-planet.com

    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit episodes.blockshots.fm

    • 4 min
    Episode 23 - Tokens

    Episode 23 - Tokens

    Tokens are digital assets representing a user’s right to use a system/service/application or to participate in a process based on blockchain.

    Tokens are similar to cryptocurrencies in terms of issuance and distribution, but they are different in terms of value. A cryptocurrency can be used as a medium of exchange, while a token has value only utility or security value.

    Tokens are mainly of two types — utility tokens and security tokens.

    Utility tokens are used to represent a user’s right to use a decentralized application. In general, to make sure that the DApp developers are paid for their work, utility tokens are used as a paywall for using DApps. The users have to purchase tokens for an app in order to use it. The value of utility tokens is based on the actual utility and popularity of the underlying DApp.

    Security tokens don’t have a utility associated with them, but they are seen more as an investment into a project to make profits. When the market value (users, usage, popularity) of a project or a company increases, the value of securities also increases and the investors can make a profit.

    Tokens are created and issued using smart contracts. In token smart contracts, there are specific functions that mint and issue tokens to users. Users can buy the tokens by calling these functions, and by making payments in native cryptocurrency of the blockchain on which the smart contracts are deployed.

    Music: https://www.purple-planet.com

    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit episodes.blockshots.fm

    • 4 min
    Episode 22 - Proof of Stake

    Episode 22 - Proof of Stake

    Proof of Stake is a blockchain consensus algorithm where the nodes put an economic value on stake to participate in block production. The problem domain is the same — to find out who should produce the next block for the blockchain.

    In PoS networks, the block producing nodes are called validator nodes. The reason being — the consensus on blocks is reached via validation and voting and not through winning a race (as in the proof of work networks).

    In PoS, the solution is two-fold. First of all, a pool of validators is created. Any node that wishes to become a validator, puts some economic stake in the network. This stake is in the native cryptocurrency of the network and generally has a minimum value threshold. All or a selected subset of nodes who put their stake in the network become part of this pool of validators.

    To produce the next block in the chain, one of these validators in the pool is chosen using a round-robin or a pseudo-random algorithm. This selected node then proposes a new block. The other validators validate and vote on this block. If the majority of validators vote in favor of this block, then this block is accepted by the chain. In case the proposed block is bad or it doesn’t follow the rules of the chain, then the block producing validator is punished by the network and their stake is taken away (slashed).

    Proof of stake has an advantage over proof of work that it does not waste all that energy in mining.

    Music: https://www.purple-planet.com

    This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit episodes.blockshots.fm

    • 4 min

Top Podcasts In Technology

Jason Calacanis
Lex Fridman
NPR
PJ Vogt
Jack Rhysider
Gimlet