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Inside the blockchain developers’ mind: How to build the next big social DApp

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People use social apps on a regular basis, yet none of them is decentralised, despite the buzz surrounding allegedly “next-gen” blockchains. Let’s look at why this is by comparing Ethereum and Steem, two blockchains.

Despite the fact that Ethereum has much more developers than any other general-purpose blockchain, no one has been able to create a social application that has gained widespread acceptance. Steem was once one of the most commonly used blockchains in the world, as well as one of the most widely used social DApps, with a market capitalization of around $2 billion.

Steem was able to grow extraordinarily quickly and onboard hundreds of thousands of regular users, but it never attracted the same degree of developer acceptance as Ethereum and hence failed to realise its full potential. The process of creating both DApps and blockchains has taught us an important lesson.

Ethereum: A general purpose blockchain

When Steem was being developed, Ethereum was the only plausible blockchain on which a developer could construct a DApp without forking and changing the code of an existing blockchain such as Bitcoin.

Rather than having to build a blockchain from the ground up to service a specific application (such as a social network), Ethereum allows developers to simply write the code for their app and submit it as a “smart contract” to the Ethereum blockchain. This would allow the developer to take advantage of all of the hard work that the Ethereum blockchain developers have previously put in while focusing on their own project.

Allowing developers to upload code to the blockchain opened up a world of possibilities, including the prospect of uploading code that consumes all network resources, rendering the blockchain unusable. This “limitlessness” needed to be restrained in some way. Vitalik Buterin devised “gas,” a decentralised technique for charging a price to execute code on a blockchain, to address this issue (Ethereum).

Blockchain fees

Ethereum’s fee-based design was ingenious, and it set the standard for general-purpose blockchain design for the next decade. With practically every succeeding blockchain using some form of gas.

Ethereum’s innovation was that it allowed programmers access to an infinite (“Turing complete”) programming language. Gas’ genius is that it imposed a decentralised restriction on what developers could do with the language. This fundamental issue (unlimited vs. limited) explains why there are currently no big social DApps on Ethereum.

Fee-less blockchains

The developers of Steem adopted a very different strategy than the Ethereum developers. They created Graphene, a very basic blockchain (or “framework”). That they could simply convert into a customised social blockchain (or “application-specific” blockchain).

Steem’s creators explored a technique for limiting network utilisation that was fundamentally different from gas, in addition to social aspects. It was, in a nutshell, cost-free.

Many people thought Steem was a rip-off when it first launched because of its fee-free “bandwidth” system. Because Bitcoin and Ethereum have fees, they reasoned that a blockchain without them would always fail.

While Steem’s first bandwidth structure was far from perfect, it quickly became one of the world’s most valuable blockchains. And by far the most extensively utilised, by providing social features and allowing users to transact for free… On a fair playing field, however, it was never able to compete with Ethereum.

Smart contracts rule

To many people’s astonishment, Steem’s failure to compete with Ethereum had nothing to do with its fee-free approach. Which the core developers continued to perfect over time and which is still in use today.

Steem was never able to compete with Ethereum. Because Graphene (the blockchain technology on which it was developed) lacked smart contracts. Graphene made it easier to establish blockchains with certain capabilities. But it was far from “easy,” and updating or adding new features was extremely complex. In contrast to Ethereum, which allows any developer to submit any code they want, whenever they want.

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