A beginner's guide to Flow crypto, the Dapper Labs controlled proof of stake blockchain designed for NFT projects like NBA Top Shot.
Flow blockchain is a purpose built blockchain for NFT projects from the team behind CryptoKitties.
Remember CryptoKitties?
Yep, the original viral NFT project that essentially brought the Ethereum network to its knees.
Well instead of waiting for the Ethereum network to scale for their new project in NBA Top Shot, the team decided to build their own.
The result being the Flow blockchain that we have here today.
Introduction to Flow
The Flow blockchain was developed by Dapper Labs, the team behind CryptoKitties.
The team gained notoriety for essentially crashing the Ethereum network with their wildly popular NFT-based game.
With Flow, they have created a blockchain specifically designed to support the creation and distribution of NFTs.
The Flow network is highly scalable, enabling it to handle large volumes of NFT transactions without compromising speed or security.
This makes it an ideal platform for creating and distributing digital collectibles and other types of NFTs.
The development of the Flow blockchain began in 2017, before the network was eventually launched in 2020.
In this guide to the Flow blockchain, we’ll discuss how it works and why Dapper Labs has chosen to build their own NFT-focused blockchain instead of building on Ethereum.
Let’s dive into the guide.
What blockchain is NBA Top Shot on?
NBA Top Shot is built on the Flow blockchain, which was specifically designed by Dapper Labs to handle their NFT projects.
Dapper Labs, the team behind CryptoKitties, recognised that traditional blockchains like Ethereum were not well-suited for NFTs.
They of course require high speed and scalability to handle the large volumes of transactions involved in producing digital collectibles.
To solve this problem, Dapper Labs created Flow, a purpose-built blockchain designed to handle NFT-based experiences like NBA Top Shot.
The Flow blockchain's unique architecture enables it to support a wide range of NFT use cases, from collectibles to games and beyond, without sacrificing speed or security.
In addition to its technical capabilities, the Flow blockchain is also highly developer-friendly, making it easy for creators to build and launch NFT projects on the platform.
This has helped to attract a thriving ecosystem of developers, creators, and fans to the Flow network, making it a natural fit for high-profile projects like NBA Top Shot.
Thanks to the Flow blockchain, NBA Top Shot has quickly become one of the most popular NFT projects.
Enabling basketball fans to buy, sell, and trade officially licensed digital collectibles featuring their favourite NBA players.
As the NFT space continues to evolve, it will be exciting to see what other innovative experiences emerge on the Flow network.
How does Flow work?
One of the key features that sets the Flow blockchain apart from other blockchains is its unique consensus method, enabling it to achieve the high speed and scalability needed for NFT-based experiences like NBA Top Shot.
Unlike traditional proof-of-work (PoW) blockchains like Bitcoin or Ethereum, Flow uses a novel consensus method called Proof-of-Stake (PoS).
This method enables the network to achieve faster transaction times, lower transaction fees and greater scalability than PoW blockchains.
Which are known to struggle to handle large volumes of transactions.
In a PoS blockchain like Flow, block validators are selected based on the amount of cryptocurrency they hold, rather than their computational power.
This enables the network to achieve consensus much more efficiently, as validators can process transactions in parallel rather than competing with each other for the right to validate the next block.
In addition to its PoS consensus method, Flow also uses a unique sharding approach to partition the network into smaller groups of nodes that can process transactions in parallel.
This enables the network to scale horizontally as demand for NFT-based experiences grows, without compromising on speed or security.
It’s this combination of PoS consensus and sharding enables the Flow blockchain to achieve the high speed and scalability needed for NFT-based experiences, while also remaining reliable.
This has helped to make Flow the go-to platform for NFT projects and has positioned it as a key player in the rapidly-evolving world of blockchain-based digital collectibles.
Is the Flow blockchain decentralised?
One question that often comes up when discussing the Flow blockchain is whether it is truly decentralised.
While Flow does have some characteristics of a decentralised network, there are also aspects of its design that raise questions about the level of control that Dapper Labs has over the network.
One of the key factors to consider is the role of block producers in the Flow network.
While block producers are responsible for validating transactions and maintaining the blockchain, they are also selected by Dapper Labs.
This means that Dapper Labs has a significant amount of control over the makeup of the network and concerns about centralisation are obviously founded.
However, it's worth noting that the level of decentralisation required for a project like NBA Top Shot is different from what might be required for other, more serious use cases.
Collectible games like NBA Top Shot are generally less sensitive to issues of centralisation, as they do not involve financial transactions or other sensitive data.
That said, for more serious use cases that require a high degree of decentralisation, a blockchain like Ethereum may be a better choice.
Ethereum has a much more decentralised network, with block producers selected through a competitive mining process rather than by a centralised authority.
This makes it a more robust platform for applications that require high levels of trust and security.
What is FLOW crypto used for?
While the Flow blockchain is primarily known for its support of NFT-based experiences like NBA Top Shot, the FLOW cryptocurrency itself also plays a key role in the network's operations.
One of the primary uses of FLOW is to power the network's consensus mechanism.
Block producers in the Flow network are required to stake a certain amount of FLOW in order to participate in the consensus process, which helps to ensure the security and reliability of the network.
In addition to its use in consensus, FLOW also plays a key role in the governance of the Flow network.
FLOW holders are able to participate in on-chain governance decisions, such as protocol upgrades and other important decisions that affect the future of the network.
The FLOW cryptocurrency also serves as a means of exchange within the Flow ecosystem, particularly in the marketplace for NFTs.
Users can purchase NFTs on the Flow network using FLOW, providing a seamless and easy-to-use experience for buyers and sellers alike.
Finally, FLOW can also be used as a store of value, with many investors purchasing the cryptocurrency as a long-term investment in the potential success of the Flow network.
As the Flow ecosystem continues to grow and evolve, the importance of FLOW is only likely to increase, making it an interesting cryptocurrency to watch for those interested in the future of NFTs and blockchain-based collectibles.
Flow pros and cons
In this section of our Flow guide, we'll take a closer look at some of the pros and cons of the Flow blockchain.
While the platform has gained significant attention for its success with NFT-based experiences like NBA Top Shot, it's important to understand both the strengths and weaknesses of the technology before investing or building on the platform.
Pros of Flow:
- High Performance: The Flow blockchain is designed specifically for high-performance NFT experiences, making it well-suited for applications like NBA Top Shot that require high transaction throughput and low latency.
- Developer-Friendly: The Flow blockchain provides a developer-friendly environment with a suite of developer tools and a simple programming language, making it easy to build and deploy NFT-based applications.
- Strong Governance: The Flow network has a strong on-chain governance system that allows token holders to vote on network upgrades and other important decisions.
- Focused Use Case: The Flow blockchain is focused specifically on NFT-based experiences, which allows it to be optimised for this use case and potentially outperform more general-purpose blockchains.
- Well-Funded: Dapper Labs, the company behind the Flow blockchain, is well-funded and has a strong track record of building successful blockchain-based applications like CryptoKitties and NBA Top Shot.
Cons of Flow:
- Centralisation: While the Flow network does have some decentralised characteristics, there are aspects of its design that raise questions about the level of control that Dapper Labs has over the network.
- Limited Use Cases: While the Flow blockchain is well-suited for NFT-based experiences, its focus on this specific use case may limit its potential for other types of applications.
- New and Unproven: The Flow blockchain is relatively new and unproven, which can make it difficult to assess its long-term potential for success.
- Tokenomics: The tokenomics of the FLOW token are somewhat complex, which can make it difficult for investors to understand and value the token properly.
- Competition: The NFT space is becoming increasingly crowded, with many other blockchain platforms and NFT marketplaces vying for market share. This competition may make it difficult for the Flow blockchain to maintain its position as a leading NFT platform.
Flow vs Ethereum for NFTs
If you're interested in creating or investing in NFT-based experiences, you're likely trying to compare Flow to Ethereum.
Both platforms offer unique advantages and drawbacks, and choosing the right one can have a significant impact on the success of your project.
In this section, we'll take a closer look at some of the key differences between Flow and Ethereum when it comes to NFTs.
One of the most significant advantages of the Flow blockchain for NFTs is its transaction speed.
Unlike Ethereum, which was designed for a wide variety of use cases, Flow was specifically built with NFT-based experiences in mind.
This focus on NFTs allows Flow to handle a much higher transaction volume with lower latency than Ethereum, making it an ideal choice for projects that require frequent, high-volume transfers.
Another significant difference between Flow and Ethereum is their gas fees.
Ethereum's gas fees can be prohibitively expensive for small transactions, making it difficult for creators and collectors to engage with NFT-based experiences on the platform.
In contrast, Flow's gas fees are significantly lower due to its different architecture, making it a more accessible and cost-effective option for smaller transactions.
The smart contract language used by each platform is also an important consideration.
Ethereum uses Solidity, a relatively complex programming language, while Flow uses Cadence, a more user-friendly and secure language for smart contracts.
It’s true that Solidity has a more established developer community and a wider variety of resources available.
But Cadence's simplicity can make it easier for creators to build secure and reliable NFT-based experiences.
When it comes to decentralisation, Ethereum has a more decentralised network with a larger number of validators, while Flow's consensus model relies on a smaller group of trusted validators.
Again, this may be a concern for some projects that require a high level of decentralisation, but it's worth noting that the consensus model used by Flow is still considered secure and reliable for NFT-based experiences.
Finally, the ecosystem of each platform is an important consideration.
Ethereum has a more established and robust ecosystem, with a wider variety of NFT marketplaces and tools available.
In contrast, Flow is a newer platform with a smaller but growing ecosystem.
Flow's ecosystem on the other hand, is currently more limited.
It's worth considering whether the platform's focus on NFTs and its unique advantages could make it a more appealing choice for some projects.
Should I buy FLOW crypto in 2023?
As the NFT market continues to expand, with more people becoming interested in blockchain-based games and collectibles, demand for FLOW could increase.
Potentially driving up its price!
FLOW has been designed specifically for the NFT industry, which gives it a significant advantage over more general-purpose cryptocurrencies like Ethereum.
FLOW also has a strong team behind it in Dapper Labs, which has a proven track record of success in the NFT space with NBA Top Shot - one of the most popular NFT platforms to date.
This gives FLOW a level of credibility and industry expertise that not all cryptocurrencies can boast.
Investing in FLOW could certainly give you exposure to the wider blockchain gaming industry, which is expected to grow significantly in the coming years.
It's important to keep in mind that investing in any cryptocurrency is inherently risky and there is no guarantee that its value will increase.
However, with the NFT industry on the rise and FLOW's focus on this niche market, there is certainly potential for growth and profits for investors who are willing to take on the risks involved.
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