# Introduction to blockchain with Marek Kirejczyk - Channel: [ETH Warsaw](https://streameth.org/eth-warsaw) - Date: 2021-10-07 - Duration: 21:48 - Watch: https://streameth.org/watch/yt-EUdlWbj0PD8 - YouTube: https://www.youtube.com/watch?v=EUdlWbj0PD8 ## Description Workshops for blockhain beginner devs. Learn how to build on Ethereum! BOUNTY LINKS: Hermez Network: https://gitcoin.co/issue/hermeznetwork/0xhack/1/100025692 https://gitcoin.co/issue/hermeznetwork/0xhack/2/100025700 https://gitcoin.co/issue/hermeznetwork/0xhack/3/100025693 https://gitcoin.co/issue/hermeznetwork/0xhack/4/100025694 DevCon: https://gitcoin.co/issue/EthWorks/hackathons/1/100025722 Golem: https://gitcoin.co/issue/golemfactory/hackathons/18/100025686 Polygon: https://gitcoin.co/issue/maticnetwork/matic-bounties/21/100025715 Status: https://gitcoin.co/issue/status-im/0xHack/3/100025685 https://gitcoin.co/issue/status-im/0xHack/2/100025680 https://gitcoin.co/issue/status-im/0xHack/2/100025680 https://gitcoin.co/issue/status-im/0xHack/1/100025679 Ethworks: https://gitcoin.co/issue/EthWorks/useDApp/181/100025575 https://gitcoin.co/issue/EthWorks/useDApp/180/100025574 https://gitcoin.co/issue/EthWorks/useDApp/179/100025573 https://gitcoin.co/issue/EthWorks/useDApp/178/100025570 https://gitcoin.co/issue/EthWorks/useDApp/176/100025566 Moonbeam: https://gitcoin.co/issue/PureStake/hackathon-0x-moonbeam/2/100025702 https://gitcoin.co/issue/PureStake/hackathon-0x-moonbeam/1/100025701 Ramp: https://gitcoin.co/issue/RampNetwork/0xHack/1/100025724 https://gitcoin.co/issue/RampNetwork/0xHack/2/100025725 https://gitcoin.co/issue/RampNetwork/0xHack/3/100025726 Chainlink: https://gitcoin.co/issue/smartcontractkit/chainlink/4375/100025683 ## Transcript good welcome everyone i think we are now live let us know on discord if everything go right we have a little little delay starting but i think everything should be fine now so off we go introduction to the blockchain so to understand the blockchain one needs to understand technology cycles and i think one of the best books to talk about technology cycles is innovator's dilemma it's an old book from the 90s that predicted a lot of things that happened but most importantly in a very clever way explains how technology cycles work so basically what you have is yeah and i would add maybe that that the steve jobs had obsession about innovator's dilemma and i and i being a young entrepreneur had obsession about steve jobs so i couldn't resist to read the book and what the book says and this is in steve jobs own words is that technologies go through those cycles they start in in early springs they have these summers falls and eventually they land on the graveyard of technology and you can you can achieve so much more if you focus on those technology in their early springs and have held them build help them build adoption there is so much more that you can achieve than focusing on those technologies that are already on saturated market and i'll give you some examples so smartphone it's a very young technology it's really just 15 years old and i remember when starter smartphone revolution started a lot of people were skeptical including myself and i was like yeah the smartphone is cool but you know my mother never gonna be able to use the smartphone and yet less than 15 years later everybody owns one it's even more popular than computer than desktop computers these days and and there is a few funny things to note about the smartphones one is that very first smartphone was created in nokia it was called nokia communicator and the same in the same smartphone revolution that they kind of started was the one that killed nokia because nokia eventually wouldn't was not able to transition to a smartphone from ordinary mobile mobile phones and eventually went bankrupt so that's it and that's not unusual if you think about it there is another disruptive disruptive technology that is a little bit older than smartphones for example digital camera and some of you that are a little bit older might remember when the first digital camera show up it didn't really the resolution was really low and people like didn't really treat digital camera as a serious thing it was more like a toy why the real stuff was created by serious companies like kodak but then the irony is that the digital camera for the github camera was created in kodak laboratories and the kodak would be a company that would eventually go bankrupt because they wouldn't sign up to a digital camera revolution soon enough and so those are the starts those technologies oftentimes we call it disruptive technologies often oftentimes initially they don't make any sense they are too they are too much of a toys they don't feel serious there is you know and yeah when the smartphone show up people would be like yeah this is a nice small computer but how do i put my good old big spreadsheet on that computer right so but those but those technologies evolve and getting better over time and eventually um and eventually uh they become part of our lives and just and it goes so far that at some point they become sustainable technologies they don't make sense anymore no nobody cares anymore if they're getting better right so for example if i ask most of you what's the difference between iphone 11 and 12 most of you wouldn't be able to tell me what really the difference is or even 10 and 11 or 10 or 12. so it's funny that we don't care anymore like the smartphones are just good enough they're really good enough and they're fine and the same with digital camera if i ask you what are what are the newest digital camera how many megapixels they have again you probably wouldn't be able to tell me what are the what are the current performance parameters because they're just good enough it's only when they grow and when the resolution is important or the amount of feature or the screen size is important is when people get excited about those all those technical parameters once they're good enough they become sustainable they get every year you get a better iphone every year you get a better camera but we just don't care anymore so when it comes to disruptive technologies there is this chart and if you look at the chart there is this idea that they progress over time and the progress can be different things can mean very different things in many different contexts so the progress might be for example uh amount of megapixels uh in digital cameras or it might be the size of the screen or the speed of the processor inside uh inside a mobile phone and so on so forth right and what is important is at the beginning when they start they don't make a lot of sense it takes a while for technology to improve and get better until they suddenly start making sense for the mass consumer market right so this is this is on this slide this is this is uh visualized by this horizontal line dotted line first on the bottom and they're getting better and now is the time between the lower and upper horizontal line is the time where where empires will fall and empires will be born empires will fall like kodak or nokia and the empires were raised to power like apple who with smartphone revolution would drive them to become one of the most powerful if not the most powerful company in the world and the same could be argued for google that the with android would extend their search business to become from very powerful company into one of the most powerful companies in the world and or the same could be argued about coda sorry about canon that was not so known before the for the camera revolution and so on and as the technology progressed they got they got to a point that they are more than good enough for the average customer just fine i don't care anymore about what what is the new iphone what is the new camera so when you look at the blockchain it's important to understand it's a disruptive technology if we were to look at where it is on this progression line on this performance it's still only it's still very early it's still somewhere it only just now starting makes sense for the mass customer consumer which is also a lot of progress because i kind of doing this presentation different variants of this presentation for i think for almost four years and and there is a huge progress because four years ago it was just it didn't make any sense for anyone it was just a new tech new tool new toy to play with and now and now finally four years later we see it's starting to make a lot of sense for a lot of people but there's still some way to go to make for it to make sense to my mother let's say or father or you know less tech savvy people less people interested in people less interested in investments and financials and advanced technologies so i it will summarize this idea this idea of um this idea of disruptive technologies uh like there is the they often come and they by many factors they they feel lacking they feel an ideal it doesn't feel good but they have a new property that allows to build new things that's gonna transform the industries that's gonna make the empire will fall empire will raise the power and for smartphones the thing is that smartphone is super handy it has a camera and gps so you can build instagram you can build uber another example would be the internet right uh very early internet didn't show a lot of promos we have a dot-com bubble people would buy the dot com bubble would be very similar to bubble we have with the cryptocurrencies right now and a lot of a lot of people would be like yeah the internet has no future and so on so forth and probably most of you don't remember that anymore but there was a bubble burst in early 1999 and and in early 2000s a lot of people would say that internet is overrated and it doesn't make a lot of sense but internet that the whole business model internet doesn't make sense because it's not physical but that was not the important thing the important thing was that with the internet you have instant access to information so you can build things like amazon and netflix and you could efficiently uh optimize the retail market or you can optimize the tv market and many many many others as well so when it comes to crypt they seem to be lacking in many ways so the transactions are kind of expensive and there is the throughput is not very high and like if you compare it with visa or mastercard everybody says yeah it's visa i have 3 000 um transactions per second or whatever but they have a new feature that was never ever that never ever existed before and the feature is trust with with this new property trust you can build things like you couldn't build before and a great example could be and a great example could be money you can build money you could never ever build money on your own without blockchain and you can build digital goals you can build new financial system things you could never ever build before so let's take a look what it means uh yeah yeah so let's start here well actually let's let's go back so what is blockchain anyway well you can think about blockchain as basically a giant spreadsheet it's going to be a little bit simplification but it's fine for now uh you're going to learn much more during the workshops later today and tomorrow so you can think about it as a giant spreadsheet and the spreadsheet really we're gonna start with just three columns there are three columns from to and value and each columns just represents and say hey i the guy from from is sending the money to the guy to and the amount of money being sent is value but this spreadsheet has an interesting properties so there is no admin access nobody can edit the history nobody can change the rows that was already created and there are some rules there are some rules that say i cannot transfer more than i have or i cannot transfer what i have twice or to put it in a more general sense the amount of money that i have that i transferred gonna be subtracted from my account and added to it to to another person account and by the way i can only spend my money i cannot tell i cannot do transfer to things that i don't know and this very simple so we can really think about blockchain as a very slow distributed database open to anyone with no admin access and with that you can build a really interesting feeling like digital gold so why does gold has a value it seems that throughout the history of the human uh civilization the value would be defined by scarcity so very a long time ago there would be a rhinestones and the rhinestones would be uh just the stones the big really big stones in the in in the place called rye and people would say people would transfer money people would have the notion money by owning the stones and everybody in the village would know which stones belong to whom and you could even split the stone and say the top half belongs to this guy and the bottom up belong to that guy but the thing is it was super difficult to create a new stone so therefore the value would and the value would be carried in time carried in time and the same thing happened over and over in the history of the human kind with the seashells and all kinds of different things that are being rare and difficult to difficult to mind difficult to possess and from all those things throughout the centuries or even maybe millennials millennials the gold would be the most the the most value carrying thing ever and the reason is that the gold is really difficult to mine there is very limited amount of gold in the world and there is very limited and there is very limited access to mining new gold and as the technology progress and we mine gold faster and better more and more efficiently the amount of gold left to be mined is less and less therefore the value it's getting it's getting harder and harder we're getting better and better so the steady flow of gold is very similar throughout the centuries and the funny thing is gold hold value so well that you could buy for similar amount of gold today and 300 400 years ago in london if you go to restaurant you can buy a meal and a drink for similar amount of money similar amount of gold really and here comes the bitcoin the idea of the bitcoin is that we use blockchain to create a limited supply money or some people think about it as really digital gold and there is no easy way to produce more bitcoin that already is and actually more than 80 percent of bitcoin that will ever be created is already created so we still have the small flow of money coming in but the point is that we know that the flow is decreasing and even if you look at the stock to flow ratio so how much stock is there is how much already exists in circulation versus how much we can add you see that bitcoin is already by many standards uh very close to gold much closer than any currency or any other or really any other precious metal but because the flow of bitcoin is steady decreasing we see that in just few years the the flow the flow of uh bitcoin into into the existing stock gonna be the best by far versus any other currency versus any other asset that exists in the world therefore a lot of people believe that bitcoin gonna be the gold in the future and they're gonna only raise in value in time and today we ain't gonna this is probably one of the last times you're gonna hear about bitcoin today and tomorrow but i think the important thing to realize is also that ethereum is going to through this hartford later this year pro initially scheduled for july that will actually not only limit the amount of ether being produced but also gonna burn some of the already existing ether therefore trying to push even further what's possible with bitcoin and push and allow to and allow to uh have a money that is that is growing in value over time now and just if you look at the bitcoin rainbow it's called the rainbow chart i ain't gonna go into details how it is uh how it is calculated but the right the the important thing it's a logarithmic scale if you look if you look at the value of bitcoin over time you see that in the long run it's growing even though luckily it might it might lose a lot of value now the last thing i want to talk about is smart contracts so you're gonna learn a lot much more about smart contracts today and tomorrow but um i want to give you a very simple intuition what the smart contracts are to start with so imagine coming back to our spreadsheet analogy imagine now that we have this giant spreadsheet with all those rules and we can put a macro we can create a smart contract a small piece of code that we embed into a spreadsheet and we do it by just sending transaction to nobody so we can send send a little bit of eater to anyone or we can just send a piece of code to the blockchain this piece of code gonna be put there on the blockchain and uh it's gonna have its own address so you're gonna have a new kind of animal living in our blockchain jungle so we have wallets and as you might already know or you will learn soon wallace have an address there is a private key so there is a the person who owns a private key can you can uh can move the money around can decide what to do with the balance and the balance is let's say an ether in case of ethereum and it's a cryptocurrency but there is this new animal now called contracts or smart contracts and those are programs and they live on the blockchain and they can execute the code so now we can send money from person to person from address to address or we can send money to a contract or contract can send money to us or contract can send money to contracts and these contracts by the way there are touring completes so for those of you who who graduated computer science you know that you can build with those contracts pretty much any a program that you can build with any other programming language and they are deterministic so the contract will always give the same result no matter on what computer it is run on and i can send a transaction to a contract and the transaction can just increase the balance of the contract but it also i can request the contract to do something for me so i can call a function the contract so the contract can do some computations and based on those computation perform some actions again probably transferring some money somewhere and for those executions i need to pay with gas and gas i buy with either so essentially i pay with eater for the execution so there is the whole thing when um and every single execution of the smart contract needs to be paid for and with smart contracts i can build a lot of interesting stuff and one example is tokens with smart contracts i can build new cryptocurrencies so i can build a smart contract that creates a lightweight cryptocurrency so it is not a new blockchain it doesn't need the miners it can you utilize existing ethereum infrastructure and you can use ethereum wallet to manage all your erc20 tokens and ether so this is this is very very powerful notion because uh now anyone can create their own thing their own cryptocurrency without creating will have without having cryptographers networks experts and so on so far they just need to have a very basic knowledge about how to build smart contracts and tomorrow you will you will learn how to um how to write well today you're going to learn more about ethereum and a very basic smart contracts and tomorrow you will learn to build your own erc 20 tokens now now when it comes to when it come give me just a second here i think we're getting pretty close to the end so yeah i think that was pretty much the last slide for today uh what i wanna what i wanna say is that you can build many many other things uh with uh smart contracts you can build exchanges you can build new financial instruments and people did do that and there's the whole defy space there is called nft space there's huge some industries that holds and moves around billions and billions of dollars built with smart contracts on each room and all about it you're gonna learn in the following presentation well not all about it but quite a lot about it you're gonna learn in next presentation from biotech with koski who is going to join us just in two minutes for now that that's it for from me for today and yeah um enjoy the next workshops and thank you very much for listening the next workshops