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Flarnchain - Newsletter #143 - Cosmos Comeback

An ocean of knowledge, one inch deep

an ocean of knowledge, one inch deep

Welcome back to the flarnchain newsletter! This is week 143, brought to your inbox each and every week like an atomic clock. I hope you have been enjoying the spooky season. When I was working on Flarn Cards (which I promise to complete v1, and all the future versions at an unidentified data) I created a couple Halloween themed Flarncoins:

This took about 15 tries to get to work. I also didn't realize how much detail I put into this drawing until now. It's been a while since I put some serious effort into a drawing such as this... maybe time to start doing that again.

It's funny seeing the flarncoin crawling out of the ground as a zombie because that's kind of what this newsletter has felt like for the past 30 weeks or perhaps even more. I think the newsletter itself has been a coinduit for me to continue to develop my skills and knowledge, and for me to continue to realize how little I know about the necessary skills to build a persistent distributed software application like a blockchain.

Anways, let's get into this week's newsletter. I'll be talking about:

  1. Overall crypto market - market is booming!

  2. Some stuff related to Cosmos Network, my favorite interoperable crypto conglomeration. In particular, Celestia and dYdX which are two brand new blockchains that have joined the interconnected network that is the Cosmos Network

The Overall Crypto Market is Up!

Markets are up overall compared to last week, but generally the past three weeks have been completely up only, a phrase that we haven't really seen in many months. I'm talking 10%-50% daily gains for some crypto-assets, and Bitcoin is up above $35k for the first time in well over a year. Here's the weekly chart, which only looks back to February 2023.. Astute observers may notice that I had to increase the Bitcoin price Y-axis to $40k:

Looks like ATOM's back on the menu. Also Bitcoin is up 56% since the beginning of this year's newsletter episodes, starting 2/8/23

So the past couple of weeks have been piping hot in the crypto markets for pretty much every crypto asset, but if you look at the orange line, you can see that Bitcoin specifically has been on a tear. If the "altcoin cycle" thesis holds true, then all of the little crypto assets will pump incredibly hard in the coming weeks or so as people take their Bitcoin profits and plow them into smaller market-cap assets. I don't know how much I agree with this theory, and I haven't really tested it in any meaningful way. I've been playing around with coingecko's API to see if I can stress test some of these theories, as it might be a valuable piece of knowledge to truly understand how this mechanism works and even possibly trade on that information.

Something that excites me about this next round of crypto bull market activity is that trading in and out of crypto assets is a lot easier due to the interoperability of blockchains, in particular the Cosmos Network, which now has access to native Bitcoin through the Nomic protocol. Nomic is a blockchain I've mentioned previously in this newsletter -- it's basically a blockchain that plugs directly into the Bitcoin blockchain, and provides direct access to Bitcoin from any IBC enabled blockchain, such as Osmosis Zone and Kujira, which are major liquidity hubs of the Cosmos Network.

I'm kind of rambling at this point, so let's get back on track and address the elephant ahem, bull in the room. This week's market animal is a bull 🐂which should come as no surprise. That's three bull weeks in a row, and I'm going to pull up an old drawing from over a year ago. Let's see how far this goes:

Three in a row. I have a series of these that gets all the way up to like... 7 or 8 in a row. The last one has lazer eyes.

so there's the market animal, a 3 bull 3-peat. Hope any of you readers who have been sitting on heavy bags of low value crypto assets are feeling a little bit better about things, it has been tough to languish in goblin town for what seems like a year and half, and now perhaps patience has paid off.

If you were dollar cost averaging during the bear market, you should be feeling pretty good right now!

Let's talk a little bit about the cosmos network and the new chains that launched this week.

Cosmos Comeback

So this week saw the launch of two new blockchains - Celestia, a modular blockchain architecture that provides data availability to roll-up chains, and dYdX, a perpetuals / futures trading blockchain. Both of these blockchains are part of the interconnected web of blockchains known as "the cosmos network", which basically the only requirement is that the blockchain allows interchain communication through a protocol known as "IBC" or Inter-blockchain Communication.

dYdX already existed as an application on Ethereum, but the throughput on Ethereum (and fees to use that chain), were not practical for the type of trading that dYdX wants to facilitate through their platform. Thus, they built their own blockchain, connected up to a whole bunch of cosmos chains, and now they are testing out the "interchain thesis" in real time. It should be interesting to see if the launch of this chain brings more users and liquidity to other cosmos chains in a sort of "rising tide lifts all boats" type scenario.

On the left we have a normal "monolithic" blockchain. On the right we have a "modular blockchain" which can be enabled by access to Celestia's services.

Celestia on the other hand is a somewhat complex thing to explain. They basically provide a service to other blockchain platforms. The service they provide is "data availability" a concept that I haven't quite wrapped my head around. Essentially, blockchains have 2 layers: an execution layer, where the transactions are committed to the blockchain, and a data availability layer, where access to historical transactions are available for all to see. Or something like that. I'm trying to just shoot from the hip here, instead of actually quoting something. Let's take a look:

Data availability answers the question, has the data for this blockchain been published? It is critical to the security of any blockchain because it ensures that anyone can inspect the ledger of transactions and verify it.

Users of a monolithic blockchain usually download all the data to check that it is available.

As blocks get bigger, it becomes impractical for normal users to download all the data meaning that they can’t verify the chain. Modular chains solve this problem by making it possible for users to verify very large blocks using a technology called data availability sampling.

-https://celestia.org/what-is-celestia/

Okay, that helps a bit. Also, I noticed that my comment above that blockchains have 2 layers wasn't quite accurate. They actually have 4 layers:

  1. execution

  2. settlement

  3. consensus

  4. data availability

Celestia essentially provides #4 as a service, which means that new blockchains can sort of pay Celestia to simplify some of the back-end infrastructure requirements and focus more on the execution of transactions. Why does this matter? I think this will make blockchains faster and blockchain applications have better access to data deep inside the chain, meaning web3 applications can start to resemble web2 applications in terms of speed and user experience.

Sounds pretty cool...

Alright that's all for tonight.

Hope you enjoyed this one and maybe next week I'll talk about some other cool stuff!

Cheers!

-Flarn

🤘🤘

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