We're nearing the end of our blockchain series. In this episode, Rohas and Rhea discuss a few other popular public blockchains like Algorand, Avalanche, Solana, and more. For each of them, Rohas talks about their consensus mechanism, native token, and his take on them.
We hope you find this episode useful!
[00:00:03] Hi there, welcome back to Cut The Cryp, a weekly podcast where we deepen your understanding
[00:00:08] of the crypto world and in the coming weeks on the blockchain world as well.
[00:00:13] I am your host, Rohas Nagpal.
[00:00:17] Last week Ria, the show's producer and I discussed the Binance ecosystem and the Binance
[00:00:23] Smart Chain.
[00:00:24] This week we are going to discuss a few other popular public blockchains briefly.
[00:00:29] Hey Ria, welcome back to Cut The Cryp.
[00:00:32] Hi Rohas, thank you.
[00:00:34] And you're right, we're going to discuss a few other popular public blockchains today.
[00:00:38] It's going to be more like a rapid fire round I feel because there's so much ground to cover.
[00:00:43] So let's begin by talking about Algorand.
[00:00:46] Can you explain this blockchain, talk about it a bit more how it started and also what's
[00:00:51] its consensus mechanism and native crypto?
[00:00:54] Sure.
[00:00:55] So Algorand uses pure proof of stake as a consensus mechanism and its native crypto
[00:01:00] is ALGO, ALGO.
[00:01:03] So what I like about Algorand, which by the way is a new generation blockchain and what
[00:01:08] I really like the best about it is its Algorand standard assets.
[00:01:12] So these are those smart assets that run on the blockchains layer one and they could
[00:01:16] be fungible, non-fungible and even restricted fungible and restricted non-fungible
[00:01:21] assets.
[00:01:23] So what I like best about them is firstly there can be a rule based asset control.
[00:01:27] So the person accessing the blockchain, whether it's from the business side, compliance, they
[00:01:32] can customize the controls that they get.
[00:01:35] Secondly, if something goes wrong you can actually quarantine an asset for investigation.
[00:01:41] Then just like in the conventional world you do bank account freezing or transfer
[00:01:45] of assets on Algorand you can actually force an asset transfer for legal reasons.
[00:01:51] And permissions can be configured so that only a white listed address can transact
[00:01:56] with you.
[00:01:57] And users can opt in whether they want to receive new assets and finally what I like
[00:02:02] about it also is it has a feature called re-keying which basically means a user can
[00:02:07] change their private key without changing their public address.
[00:02:11] Okay, great.
[00:02:13] Thanks for explaining that to us.
[00:02:15] Next we have Avalanche.
[00:02:16] Can you introduce us to Avalanche?
[00:02:18] Talk about its consensus mechanism, native crypto.
[00:02:21] Sure.
[00:02:22] So Avalanche uses the Snow Protocol family as its consensus mechanism and its native crypto
[00:02:28] is AVACS, A-V-A-X.
[00:02:31] So that's a very popular DeFi blockchain today.
[00:02:34] And what I like most about it is that anyone can launch customized private and public
[00:02:39] blockchains using Avalanche.
[00:02:42] And the speeds are phenomenal.
[00:02:44] So with a transactional throughput of more than 4,500 TPS it actually performs phenomenally
[00:02:50] better than Bitcoin which is just 7, Ethereum which is 14 and Polkadot which is 1500.
[00:02:57] And one more thing is that in terms of transactional finality, which basically means in how much
[00:03:03] time can we be very confident that our transaction will now not get reversed?
[00:03:09] Avalanche is less than two seconds whereas in Bitcoin it's a whopping 60 minutes,
[00:03:14] Ethereum 6 minutes and Polkadot 60 seconds.
[00:03:18] Interesting.
[00:03:19] Avalanche definitely leads there.
[00:03:21] Absolutely.
[00:03:22] Super.
[00:03:23] Let's move to Cardano.
[00:03:24] Similar question, tell us what its consensus mechanism and native crypto?
[00:03:29] So Cardano uses the proof of stake consensus mechanism but they've made their own version
[00:03:33] of it called Ouroboros.
[00:03:35] I'm not sure if I pronounced that correctly.
[00:03:38] And its native crypto is ADA.
[00:03:41] And can you tell us what you like about Cardano?
[00:03:43] Sure.
[00:03:44] Actually I don't like it too much because while on the one hand it's developed
[00:03:47] and very academically peer reviewed but when it comes to actual business applications I'm
[00:03:52] not honestly seeing too much of uptake in that.
[00:03:56] So I think it's one of those blockchains which is not really going to do too well moving
[00:04:00] forward.
[00:04:01] All right, next up we have Sello.
[00:04:04] Can you tell us its consensus mechanism and native crypto?
[00:04:07] Sure.
[00:04:08] So Sello's consensus mechanism is proof of stake and its native crypto is CELO.
[00:04:14] So what I like about it is it's the first mobile friendly or mobile first blockchain and the
[00:04:21] vision behind it is to make financial dApps and crypto payments accessible to anyone with
[00:04:25] a mobile phone.
[00:04:27] Its average block time is 5 seconds which is really good and it is EVM compatible.
[00:04:33] And CELO uses mobile phone numbers mapped to public keys.
[00:04:38] And CELO transactions are fast and light because the block headers are optimized
[00:04:41] for fast mobile phone synchronization.
[00:04:44] Amazing.
[00:04:45] Moving on to Phantom.
[00:04:46] Can you tell us its consensus mechanism, native tokens and what you like about it?
[00:04:50] Sure.
[00:04:51] So Phantom uses something called the leaderless proof of stake consensus mechanism which
[00:04:55] is also called lechesis and its native crypto is FTM.
[00:05:01] Phantom is actually a network of blockchains where transactions are finalized in a second
[00:05:06] and cost a fraction of a cent.
[00:05:09] Even use cases are payments, digital identity and even medical records.
[00:05:14] Now some of the things I really like about it is that it conquers the blockchain trilemma.
[00:05:18] So you know as many people may be aware what we say in the blockchain world that there
[00:05:22] are three core features but any blockchain can have only two of them.
[00:05:26] That's between scalability, security and decentralization.
[00:05:31] You are supposed to get only two because that's how blockchain technology is.
[00:05:35] But Phantom is probably one of them which can actually give you all three because in
[00:05:40] Phantom each application has its own blockchain and its performance and stability are not affected
[00:05:47] by traffic or congestion.
[00:05:49] Now this is not the same case in most other blockchains.
[00:05:52] I see.
[00:05:53] So we definitely see Phantom having a big advantage there.
[00:05:57] Absolutely.
[00:05:59] And next up we have Polkadot.
[00:06:02] So Polkadot's consensus mechanism actually there are two and they sound a little weird.
[00:06:06] One is called grandpa and the other is called babe which are actually their acronyms for
[00:06:11] some really complicated names so I am not getting into that.
[00:06:14] And the native token is dot or DOT.
[00:06:17] Now what we must know about Polkadot is it's not a conventional blockchain.
[00:06:21] It's actually an ecosystem of interconnected blockchain shards which are called parallelized
[00:06:28] chains or parachains for simple.
[00:06:30] A parachain is an application specific chain and it is connected and secured by a single
[00:06:36] base platform called Relay Chain.
[00:06:39] And of course parachains can connect to the external world through blockchain bridges
[00:06:43] which is something we will talk about in the next episode.
[00:06:46] So can you tell us a little bit more about Relay Chain and Parachain?
[00:06:50] Sure.
[00:06:51] So Relay Chain is the heart of Polkadot and it is responsible for the network's
[00:06:55] security, consensus and cross-chain interoperability.
[00:07:00] It contains Polkadot's consensus and voting logic.
[00:07:04] Parachains on the other hand are sovereign blockchains with their own tokens and they
[00:07:08] are optimized for specific use cases.
[00:07:12] Parachains need to pay for connecting to the Relay Chain.
[00:07:16] Understood.
[00:07:17] Next up we have Polygon.
[00:07:20] So now Polygon is a little different so actually where it started from is that the Ethereum
[00:07:24] blockchain is slow and costly.
[00:07:26] So Polygon actually has a bunch of products and services to solve this problem.
[00:07:32] So Polygon's software development kit enables the building of Ethereum side chains which
[00:07:38] are blockchains linked to Ethereum via a two-way peg.
[00:07:41] These are of three types.
[00:07:43] One is called Plasma Chain which basically bundles transactions into blocks which are
[00:07:48] then batched into a single submission to the Ethereum blockchain.
[00:07:52] The second is what we call ZK rollups which allow multiple transfers to be bundled into
[00:07:57] a single transaction.
[00:07:58] And the third is Optimistic Rollups.
[00:08:01] These are Plasma chains which also scale Ethereum smart contracts.
[00:08:06] And MATIC is Polygon's native token and you can use it for paying transaction fee
[00:08:10] as a unit of payment in the Polygon ecosystem and it also powers Polygon's Proof-of-Stake
[00:08:16] side chain.
[00:08:17] So in conclusion Polygon is a bunch of scaling solutions and it's also its own Proof-of-Stake
[00:08:24] side chain.
[00:08:26] Okay, okay.
[00:08:27] Now next up we have Solana.
[00:08:29] Can you talk about its consensus mechanism, native tokens and also what you like about
[00:08:34] it?
[00:08:35] Sure.
[00:08:36] So Solana uses something called Proof-of-History and TowerBFT and its native token is SOL.
[00:08:43] Now I'd honestly say it is probably one of the world's cheapest and fastest blockchains.
[00:08:48] The block time is just 400 milliseconds and transaction fee is less than 1 cent.
[00:08:54] While I have always been a huge fan of Solana for its speed, low cost and ease of use but
[00:09:00] there are a lot of things that keep going wrong with it.
[00:09:02] So for example in September 2021 Solana suffered an 18 hour outage.
[00:09:08] Now that's not supposed to happen in a blockchain because blockchains are supposed
[00:09:10] to be decentralized, having multiple nodes so there should never be a single point of failure
[00:09:15] and the entire blockchain should never go down but that has happened.
[00:09:19] It also suffered a major congestion in December 2021 then it went down for 5 hours in Jan
[00:09:25] 2022 and the wormhole bridge between Solana and Ethereum was also exploited in Feb this
[00:09:31] year where hackers stole more than 300 million dollars of crypto.
[00:09:35] So considering all these issues I'm kind of not very bullish on Solana anymore.
[00:09:40] Yeah, yeah that makes sense.
[00:09:42] It seems like on the one hand they have something that's very powerful but on the other it isn't
[00:09:47] reliable.
[00:09:48] Absolutely.
[00:09:49] Well we have two more on our list for today.
[00:09:51] The next one is Stax.
[00:09:53] Again it's consensus mechanism, native tokens and what you like about it.
[00:09:58] So Stax uses something called Proof-of-Transfer and its native crypto is STX.
[00:10:04] Now what I really like about it is that Stax is actually a blockchain that is bringing smart
[00:10:09] contracts, NFTs and dApps to Bitcoin.
[00:10:13] Since Stax uses Bitcoin as a base layer everything that happens on Stax is settled on the Bitcoin
[00:10:19] blockchain.
[00:10:21] Stax connects directly to the Bitcoin blockchain through its own Proof-of-Transfer consensus
[00:10:25] mechanism.
[00:10:27] Another very interesting thing about Stax is it operates the .btc top level domain
[00:10:31] name.
[00:10:32] So you can actually get a domain name at a cost of $5 for five years and the Stax token can
[00:10:38] be used for execution of smart contracts, processing transactions and registration of new digital
[00:10:44] assets.
[00:10:46] And finally we have Terra.
[00:10:49] So again Rohas can you tell us a little bit about its consensus mechanism, native tokens
[00:10:53] and what you like about it.
[00:10:55] So Terra's consensus mechanism is a tender mint delegated proof-of-stake and its
[00:11:00] native crypto is Luna and as of right now this platform is in the news for all the wrong
[00:11:06] reasons because their algorithmic stablecoin as we've discussed in the past also.
[00:11:11] We've said that algorithmic stablecoins in due time all fail.
[00:11:15] The technology somewhere or the other goes wrong or the financial system just doesn't
[00:11:18] work properly.
[00:11:20] So Terra is basically an open-source public blockchain protocol specifically for algorithmic
[00:11:26] stablecoins.
[00:11:27] It enables the creation of fiat-pegged stablecoins that can be spent, saved, traded or exchanged
[00:11:34] on the Terra blockchain and they have two main tokens, the Terra stablecoins and Luna which
[00:11:40] is the protocol's native staking token that is used for governance and in mining.
[00:11:45] Cool.
[00:11:46] So you know we spoke about again I think we spoke about 10 blockchains today and we've
[00:11:52] also covered three more in previous episodes.
[00:11:55] What I wanted to ask you is, is there a particular blockchain that you're more bullish on?
[00:12:01] Do you see a lot of these fading out, staying like we saw the glitches that you mentioned
[00:12:07] with Solana.
[00:12:09] So what do you see as the future?
[00:12:12] What are you bullish on?
[00:12:13] So I think we have far too many blockchains today and I believe in the long run so many
[00:12:18] of them are not really going to survive.
[00:12:19] I think the world just needs three blockchain ecosystems.
[00:12:23] Bitcoin, Binance and Ethereum.
[00:12:26] And other than that I feel most of the other blockchains are kind of going to fade out
[00:12:30] over time because while they may offer a lot of things like huge number of transactions
[00:12:35] per second but do we actually need that?
[00:12:38] Do we actually have that many applications running on blockchains with that much transaction
[00:12:42] speed really needed?
[00:12:44] I don't really think so.
[00:12:46] So I am bullish on only three blockchain ecosystems.
[00:12:49] Got it.
[00:12:50] I just have one follow up to that.
[00:12:52] Do you think that right now there's of course the blockchain space is still limited?
[00:12:57] People are still understanding it for the most part.
[00:13:00] People are still adapting to it.
[00:13:01] Do you think when there's more demand as well we're going to see more blockchains flourish
[00:13:06] or do you see it being concentrated in the three that you're bullish on?
[00:13:10] Excellent question.
[00:13:11] So when we look at the world of operating systems which have been around for a very
[00:13:14] long time, it's basically Windows, Linux and Mac.
[00:13:17] And of course in Linux you have various flavors but the world hasn't really
[00:13:20] needed 20 operating systems.
[00:13:23] I think similarly in the blockchain world we're probably going to see just these three
[00:13:27] remaining but they will grow and they have so much more with them like when we spoke
[00:13:31] about stacks right now that's actually part of the Bitcoin ecosystem.
[00:13:35] So Bitcoin ecosystem has a lot more than just one blockchain.
[00:13:39] So when we look at it from that holistic picture, I think in the future we are
[00:13:43] going to see just three ecosystems remain that's Bitcoin, Binance and Ethereum.
[00:13:48] Great.
[00:13:49] Thanks for explaining that and yeah those were all my questions, Rohas.
[00:13:53] Thanks Riya and to our listeners I hope you found this useful.
[00:13:57] If you did do share this episode and let me know on any of my social handles.
[00:14:02] I'm also launching a free course called APIs for Blockchain and Crypto.
[00:14:07] Simple to remember ABC.
[00:14:09] So do join in and I hope you benefit from that free course.
[00:14:12] We'll be back next week with an episode on blockchain bridges.
[00:14:16] And of course before we sign off just one last thing to all our listeners I urge you
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[00:14:24] This helps us reach more crypto enthusiasts like yourself
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[00:14:30] Thanks for listening in and we'll be back next week.