Found a very useful thread as we see here:
Got a few friends asking what they should be reading / resources to get started so here’s my take on it:
— Darren Lau (Lau, Lau) 👘 (@Darrenlautf) September 6, 2021
Basic Skill Tree for those looking to get into crypto 👇
Feel free to comment if there’s anything that I should add!
Retweet if helpful 🙌
Bitcoin
Reading a Bitcoin intro here. A quick summary:
- Similar to gold with respect to scarcity and seen therefore as alternative to fiat currency
- Has risks in huge volatility and technical risks associated with the network and technology
Layer 1
There’s a report here I downloaded. Making it brief:
- USDT was on on Bitcoin chain but since moved on as Bitcoin chain cost and speed not suitable
- RSK is a Bitcoin side chain but don’t know if we need to care
- Smart Contracts – Computer programs used to faciliate all kinds of different financial transactions. Secured by a blockchain
- Native Tokens – ETH, ALGO, ATOM, DOT, AVAX, SOL, … Used to secure layer 1 networks
- Accessibility – Uniswap, AAVE, PancakeSwap, Compound, Maker, …
- Stable Coins – USDT, USDC, UST, DAI, …
- Layer 1 Smart Contract Platforms – Ethereum, Algorand, Cosmos, Polkadot, Avalance, Binance, Solana, Tron, …
- Side Chains & Application Specific – Polygon, RSK, Thorchain, xDAI, Terra, …
- Scalability Solutions – Layer 2 solution – if using their own security solutions, may be called a side chain
- Polkadot- Almost a layer 0 solution allowing developers to utilize security framework and develop level 1 chain
- Blockchain based assets are issued on top of Layer 1 platforms – examples, NFT, Stable Coins
- Security Mechanisms (competition)
- PoW – Proof of Work – computational power
- PoS – Proof of Stake – finanical stake
- PoA – Proof of Authority – reputation
- Etherum is going through a phased technical roadmap to improve scalability taking several years
- Rollups – Solutions that perform transaction execution outside of Layer 1 but make transactiojn data available on Layer 1
- Rollups seems to be most popular so far – ie. Arbitrum
Layer 1 Comparisons
- Node Requirements
- Solana highest, then Polkadot, Binance
- Algorand, Avalanche lowest
- Cosmos, Etherum 2.0 middle of the road
- Stake to run a Validator Node
- Mostly prohibitive it seems at least for people not very early in crypto
- Algorand, Solana reasonable $$. Avalanche next, but at ~ $20k
- Validating can be financially risky if the chain gives slashing penalties for any misbehaviours
- Decentralization through staking
- Avalanche, Polkadot, Solana best
- Next – Etherum 2.0, Cosmos
- Decentralization through control of the network
- Avalance, Ethereum 2.0 seem best here with higher number of validations required to control the network via malicious behaviour
- Performance Estimates
- Ethereum 2.0 & Polkadot seem to have most potential but untested
- Solana has very high testnet results
- Avalanche, Cosmos, Algorand middle of the road – maybe higher potential TBD
- On Chain Data
- Transaction counts – Ethereum, Binance, Algorand at top, next is the rest, Avalanche, Cosmos, Polkadot
- Daily transacted value – Ethereum, Avalanche on top
- Fees per transaction – Aglorand cheapest, Avalanche, Polkadot, Cosmos middle. No surprise, Ethereum most expensive
- Native Tokens
- Algorand, Avalanche have capped supply
- Ethereum, Solana burn tokens, the others recycle
- Token Distribution
- Cosmos, Polkadot, Ethereum have most token sales – means less for the team and insiders
A lot to digest there. On to more learning…
