Dear readers,
We hope you're having a wonderful Sunday. Last week in our newsletter, we discussed the concepts of " Decentralization " and " Trust ." Just before that, our podcast on " Working in the Web3 Space " was released. If you haven't listened yet, you're invited.
Listen or view the original embed ↗
To briefly summarize, last week we discussed how our trust was broken and how we can fix it. We reminded everyone of the importance of being cautious and mentioned that we can actually apply this to systems as well. No matter how cautious you are, it's meaningless if the platforms you use don't reflect that. Therefore, we said that we need to take this beyond just thinking and make it more comprehensive.
Cryptocurrency can help us solve these problems, but how?
We have always had the option of seeking help from third parties to ensure security in transactions, but please note that this is not a very profitable method . Third parties not only prolong the process, It also doubles our expenses in some cases. So, someone once thought it would be great if the system itself provided this guarantee . And they continued to focus on it afterwards.
"If this system is decentralized, corruption will be prevented as a result."
While continuing to consider this, a decision was made to adopt two different principles . The first was to adopt an approach focused on minimal solutions . To summarize what is meant by this principle, it can be said that the system should not be profit-driven while hosting user-to-user transactions , and should complete tasks minimally . While traditional methods involve third-party companies providing trust with a profit motive , this system is designed so that such an agenda will never be present. An example of this would be platforms that allow users to buy and sell tokens with minimal transaction fees, only covering the transaction cost .
The second principle adopted was a trust-based work system . This means that the error rate in the complete and accurate execution of the process is so statistically small that it can be perceived as almost guaranteed. With such a system, users don't have to trust the system ; on the contrary, they know it will work . All possibilities that could cause the system to malfunction have been considered and eliminated.
Blockchains combine these two principles , keeping profit at a level that covers costs while operating on a trust-based approach . Of course , we're excluding platforms where transaction fees are unregulated and, consequently, have become unparalleled over time . Remember, when discussing these points, we're focusing on the logic of blockchain .
When someone creates new value, for example, deciding to tokenize their house and store the title deed on the blockchain, they transfer this data to the blockchain. Decentralized connection points, or " nodes ," then confirm that this transaction has taken place. When a " consensus " is reached on the transaction , which has been confirmed by many nodes— meaning the majority agree—the transaction is complete. If the same person wants to make a payment to the person they bought the house from via the blockchain, the nodes first ensure that the buyer has sufficient funds to cover the payment amount. Once it is determined that the buyer has enough money, this transaction is also confirmed and completed by the nodes.
Decentralized consensus and cryptography are fundamentally based on a concept known as cryptographic truth . This can be summarized as the fact that the confirmation of new transactions actually occurs based on background information that has been previously transmitted and recorded on the blockchain , and is therefore considered true.
Regarding this week's developments, authorities' diligent investigations have raised the possibility that Binance is involved in money laundering. Following investigations that began in 2018 and were fueled by the FTX scandal , it appears Binance's top executives will now be under scrutiny.
Additionally, we learned that Avalanche NFTs will begin to be available through e-commerce giant Shopify . This means we will be able to purchase NFTs from the Avalanche ecosystem without needing marketplaces like OpenSea or Magic Eden .
NFT collection launched by Donald Trump last week sold out the same day. One of the cards, featuring him holding a torch in front of the Statue of Liberty, was priced at 20 ETH .
Logan Paul's NFT game, CryptoZoo , promised users passive income opportunities. However, things didn't quite work out that way. Like many other games that promised big but failed to deliver, it was accused of fraud and disappeared from the scene. Logan Paul, however, claims that the problem was entirely the responsibility of the people he hired , and that he was never to blame. A wonderful example of maturity!
This news brings to mind the Axie Infinity game. As we see in many crypto games, players who owned a lot of NFTs benefited from those who earned less. It was considered a superficial game based on a tokenomics model , which we will discuss in later newsletters . While at its peak, the game suffered a hack that caused players to lose $620 million in assets. We don't know the total number of victims, but we offer our condolences to them.
Elon Musk recently announced on Twitter that he had fired office workers, citing the reason that robots would be replacing them . According to reports from the Chelsea office, in the days that followed, office workers were forced to beg for toilet paper . Clogged toilets and other unmet needs were also a major problem.
Another news item concerns pharmacies in Ukraine. This is about the introduction of cryptocurrency as a payment method . Customers of the Ukrainian pharmacy chain ANC can now purchase medicines and other products from pharmacies using certain cryptocurrencies .
These were the developments of the first week of the year, and we hope to bring you more happy news next Sunday. We hope you have a peaceful and beautiful day and that it inspires you in the days to come.
See you next week on a happier Sunday morning,
Decentralized Bulletin
Originally published on Medium on January 07, 2023. English translation of “Kripto Sistemlerde Güvence İlkeleri”.