From Zero to Crypto-Hero: Unraveling the Mysteries of ‘Blockchain and Distributed Ledger Technology’

I’m going to use my blog as a place to document a mind-melting journey as I delve into the enigmatic world of ‘Blockchain and Distributed Ledger Technology’!

My haphazard fumbling will take us through the labyrinth of decentralized systems, smart contracts and hopefully help me solidify what I understand and where I’m sorely lacking.

Caveat: I’m doing this for myself, but since you’re here feel free to join in, share insights or point out to me my misunderstandings. I have no ego, only the desire to learn something more deeply.

So where am I going to start?

Well, i’ve already started a little and I’ve read a lot of random stuff, but honestly, most of it feels like i’ve missed a fundamental principle (or 10). Something that makes this shift in thinking ‘click’. Some noteworthy reads and listens though i’ll share:

• The Cryptopians by Laura Shin — a history of Ethereum, really good story, and I did feel like it helped paint a picture of the history i’d largely seen from afar.
• The Satoshi Whitepaper https://nakamotoinstitute.org/bitcoin/ — The infamous 2008 paper. Easy to read — and since i’d read enough to understand the basics of bitcoin it was good to see where those learnings began.
• Next up to read — Blockchain & Distributed Ledgers by Alexander Lipton and Adrien Treccani. This is a big book but I like its claim to be objective, and the idea of a structured learning experience is very appealing. Sidenote — it was pretty pricey, so I have high hopes 🤣
• Next up to listen — A future colleague of mine has pointed me at podcasts/videos by a16z as an excellent resource. I’ve yet to dig into that.

The 100,000ft view of the world…

The first takeaway for me was that grasping blockchain and distributed ledger technology hinges on three essential concepts: game theory for strategic decision-making, economics to comprehend value exchange mechanic implications, and cryptography to ensure secure data communication. Good news… i’m not particularly versed in any of these in detail — good because i’ll get plenty of opportunity to learn.

But what is a blockchain?

Lets take a definition from the book:

“ A blockchain is a shared, distributed ledger designed to record transactions in a business network and track resulting changes in asset ownership” — Gupta 2018

So lets break that down a little:

• Shared: Every participant in the network has a synchronized copy of the ledger, promoting transparency and trust.
• Distributed ledger: A digital database of transactions or records that is decentralized and maintained across multiple computers or nodes. It
• Designed to record transactions: Blockchain’s primary purpose is to securely and efficiently store transaction data. These can be transactions of tangible assets (i.e. money, artwork) and the intangible (i.e. copyrights, goodwill).
• In a business network: Blockchain can be used in various industries and business settings to streamline processes and reduce intermediaries.
• Track resulting changes in asset ownership: Blockchain enables accurate and transparent tracking of asset ownership, as each transaction involving the transfer of assets is recorded and verified by the network participants.

Chains — they’re not something new

Something I enjoyed in the the books 1.3 chapter “A restrospective view” was the outline that the idea of transferring valuable objects and property rights via ‘chains’ with some form of consensus isn’t something NEW. This was something i’d never thought about before but if you consider family tree’s and the rights to land, property and assets that are passed down through generation by right. Those are in essence just another chain. Everyone in the family has their own copy and they agree on the accuracy of it by consensus. As new blocks are added (children and the occasional iligitimate heir) the rights and assets are passed along the bloodline, classically to the eldest son etc etc..

The analogy goes further to compare a ‘hard fork’ which in Ethereums case was infamous after a hack on ‘The DAO’ but that’s another story… and interesting one though. Read the Cryptonians book I cited above for a good overview of it.

What next?

Looks like the next chapter is a crash course in the worlds financial system 🐌. I’m likely to not enjoy this entirely but I accept its going to be good medicine to understand some of the underlying drivers and will help me understand DeFi better too i’m sure.

Where would you send me as a fledgling to read more? What gave you that ‘ah ha’ moment?