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What Is Flow Blockchain?
Beginning with Bitcoin in 2009, blockchains are decentralized networks that have forever changed how people organize capital, data, and assets. Whereas the early and current forms of the web were about distributing content from centralized stores to users, blockchains are enabling what’s called the Web3.
Web3 is kicking off a paradigm shift wherein user-generated content is distributed to other users via user-owned platforms. So, instead of Facebook, YouTube, and Instagram owning content distribution networks, users own the rails themselves across highly efficient composable peer-to-peer networks.
In the context of Web3, content is loosely defined as any transmissible form of data. Whether that data is money, in-game items, profile pictures, or supply chain information makes no difference to the neutral user-owned network.
Now, what does all this Web3 talk have to do with Flow blockchain? Flow is a blockchain built specifically for Web3 assets and apps like NFTs, crypto games, and DAOs. In short, Flow believes blockchains are the backbone of the digital economy and is providing the toolset for developers to build it.
Ethereum, Solana, Polkadot, and other popular blockchains fit a similar description. In fact, most of the burgeoning NFT scene is built on Ethereum. So, what makes Flow blockchain different from Ethereum?
- Fast, proof of stake-powered consensus without sharding
- Near-instant finality without compromising decentralization
- Highly scalable for massive gaming yet inexpensive to use
- Upgradable smart contracts written in robust Cadence code
- Uses recoverable Smart Accounts instead of keys & seeds
The history of Flow blockchain coincidentally begins on Ethereum. Back in 2017, Dapper Labs created CryptoKitties, the world’s first widely adopted blockchain game.
The FLOW token (“FLOW”) is the native currency for the Flow network and the keystone for a new, inclusive, and borderless digital economy. If Flow is the digital infrastructure, FLOW token is the fuel that powers the network. FLOW is the currency required for the network and all the applications on top of it to function. FLOW is designed as a payment method as well as a long-term reserve asset for the entire Flow economy. The token is used by validators, developers, and users to participate in the FLOW network and earn rewards. It is also used for fees and to participate in future protocol governance.
The Flow Ecosystem
Flow is a blockchain designed from the ground up for mainstream adoption and is the only blockchain that builds usability improvements into the protocol layer. Top developers and some of the world’s largest brands are already building on Flow, enabling completely new experiences with top-tier content.
Flow has a rich ecosystem comprised of top entertainment brands, development studios, and venture-backed startups. Flow ecosystem partners include global IP brands like Warner Music, Ubisoft, NBA and UFC; leading game developers, including Animoca Brands, Sumo Digital and nWay; leaders in crypto, such as Circle and Binance; as well as several noteworthy projects among the next generation of high-growth startups, including Opensea.
How Does Flow Work?
If you are familiar with how blockchains operate, then you know that they are generally made up of nodes that store the entire state of the currency’s history and verify all transactions.
Flow, by contrast, aims to create many subdivisions of its network to allow for the total work to be split across nodes, with each node only validating a subset of the transactions.
To do this, the Flow blockchain employs a multi-node, multi-role architecture.
Put another way, Flow has divided the validation stages of a transaction into four different categories, dividing the responsibilities of each node:
- Collection Nodes – Enhance network connectivity and data availability for dapps
- Consensus Nodes – Decide the presence and order of transactions
- Execution Nodes – Perform computation associated with each transaction. These nodes do not have any decision making powers
- Verification Nodes – Double check the work done by the Execution Nodes.
Flow’s creators argue this level of specialization allows each node to participate in the validation of every transaction, while splitting tasks to increase efficiency.
Today, in addition to NBA Top Shot and CryptoKitties, there are many products launching on Flow. Smart contracts on the Flow blockchain are written in Flow’s native language, Cadence.
The Flow team has created a website as a learning tool for developers who have never built blockchain applications to familiarize themselves with Cadence.
Another unique feature of the Flow blockchain is that developers can release their dapp in beta, while updating the code as problems arise. Users will be alerted to these changes as they are interacting with the software.
Once the authors submit the final version of the code, it then becomes immutable, meaning that it cannot be changed again.
FLOW Tokens Fuel The Blockchain
Like Ethereum, Solana, and Polkadot, Flow uses its native cryptocurrency as fuel for the blockchain. To settle a transaction (e.g., trigger a smart contract), users are required to pay either processing fees (simple transactions) or computation fees (complex or layered transactions).
Stake FLOW To Earn Staking Rewards
Flow uses a proof of stake consensus algorithm along with multi-node architecture. In combination, those two characteristics give validators plenty to do. However, to become a flow validator, you have to stake a minimum amount of FLOW tokens. Only after staking FLOW tokens can you begin your validator role, earning FLOW staking rewards in the process.
Because Flow validators have several different roles to choose from, doing the one most needed is most important. So, Flow developers designed the staking reward mechanism to give higher incentives to the validator role most needed at any given moment
Finally, you don’t have to become a Flow validator to earn FLOW staking rewards. You can easily delegate your stake instead. By doing so, you’ll still earn FLOW staking rewards but will pay a small portion of them to the validator you delegate to.
How To Participate On Flow
In order to increase throughput speed, Flow created multi-role architecture for the network. Using four different types of participation nodes, Flow separates non-deterministic (“subjective”) processes, such as determining the presence and order of transactions in the blockchain, from deterministic (“objective”) ones, such as computing the result of those ordered transactions once it has been determined. Non-deterministic tasks require coordination while deterministic ones have a single, objectively-correct outcome.
Nodes for non-deterministic processes:
- Collection Nodes are placed in cooperating clusters by the protocol to collectively manage the transaction pool and collect valid transactions to propose to Consensus Nodes.
- Consensus Nodes form and propose blocks using the HotStuff consensus algorithm to create a globally consistent chain of blocks. They have minimal bandwidth and computation requirements, which makes it easier for anyone to participate in consensus.
Nodes for deterministic processes:
- Execution Nodes execute transactions and maintain the Execution State, a cryptographically-verifiable data store for all user accounts and smart contract states. They also respond to queries related to the Execution State. This work requires the Execution Nodes to be the most resource-intensive on the network. It is also the key reason Flow can improve its scale and efficiency without utilizing sharding.
Because of the significant hardware requirements to run these nodes, they are the least accessible option for participating as a Validator. However, with relatively few Execution Nodes doing the work, the rewards per node are expected to be high.
- Verification Nodes confirm the work done by Execution Nodes is correct. Although each individual Verification Node only checks a small amount of the total computation, collectively the nodes check every computation several times in parallel.
Each type of node performs a discrete task in the validation process for each transaction. To allow this approach to work, Flow uses a new cryptographic technique called Specialized Proofs of Confidential Knowledge (SPoCKs) to address the Verifier’s Dilemma. Without revealing anything confidential, SPoCKs allows ‘provers’ to show they have access to the same information. Each prover has its own specialized SPoCK which can not be copied or forged. Requiring each prover to have a SPoCK ensures that each node does its own check rather than copying other nodes results or blindly following their lead.
All four participation node types are rewarded for their work on the chain, but the number of each type varies by the work performed. At launch, Flow expects to have 20 Collection Nodes, 43 Consensus Nodes, 3 Execution Nodes, and 73 Verification Nodes. As the protocol grows, a balancing system will incentivize the most secure distribution of node types by changing the reward rates for each type.
Target staking ratio
Minimum stake (from self-bond and delegation)
Delegation is also a feature on Flow. Delegation rewards are paid out automatically on a weekly basis by the protocol. There is a minimum 10% fee on the rewards earned by delegators, which is paid to the validator to help cover the costs of node operation.
Characteristics Of The Flow Crypto Protocol
The team behind the Flow blockchain chose to build the protocol without the use of the Ethereum network or another Layer-1 blockchain, and is a blockchain in its own right. Flow is designed using what’s called a multi-role architecture that does not incorporate scaling solutions like sharding or Layer-2 networks. The Flow crypto protocol incorporates four main characteristics to fulfill its vision of creating blockchain-based entertainment and investment experiences for millions of users.
Multi-role architecture: Flow’s technical design leverages the use of nodes that fulfill four concurrent roles, allowing the platform to obtain extremely high transaction throughput and security without significantly compromising decentralization or limiting application development. This multi-tiered approach allows the network to scale exponentially because it separates non-deterministic processes like achieving consensus from deterministic processes like carrying out computation.
Here’s how Flow’s four types of nodes work together: Firstly, Consensus Nodes determine the order and availability of transactions on the network. Verification Nodes work with Consensus Nodes to enhance platform security. Verification Nodes also help maintain the integrity of transactions. Execution Nodes are relied upon to correctly perform computations on-chain. Finally, Collection Nodes are responsible for strengthening network connectivity and increasing dApp data availability so dApps can use data to execute smart contracts and other related processes.
Resource-oriented programming: Flow has developed Cadence, an example of a novel form of programming language called resource-oriented programming. Cadence is easy to use, secure, and powerful, but its ability to allow for the representation of asset ownership directly within the programming language is one of the main characteristics that sets it apart. This innovation is designed to decrease developer complexity and dramatically increase the capability of dApps built on the Flow blockchain.
Consumer onboarding: Flow is built to be user-friendly with the integration of existing mainstream payment on-ramps for users, allowing for customer interaction in a secure and simple manner. In particular, this is realized by providing human-readable security for dApps and wallets so users understand the decisions they are making within the systems they are using. Smart account technology also allows users to make use of the Dapper Wallet without having to remember complex seed phrases or risk the possibility of losing their private keys when they manage their NFTs or digital assets.
A Green Web3 Network
Flow starts with HotStuff, a proven Proof of Stake consensus mechanism, and adds a unique multi-node architecture to drive dramatic improvements in speed, throughput, and environmental friendliness without sharding or “layer two”.
This means Flow is the greenest Web 3 network among leading platforms. Minting an NFT on Flow costs less carbon than a post on a social networking site!
When building any type of application, scalability is an important factor to consider. The multi-node architecture of the Flow blockchain gives it an advantage over the Ethereum network, which uses sharding, a method of storing a single dataset in multiple databases. Below are the various nodes present in the Flow multi-node architecture:
- Execution node: Handles all the calculations for every transaction on the network
- Collection node: Improves network connectivity and makes data available for decentralized applications
- Consensus node: Determines the order of transactions on the network
- Verification node: Verifies work done by the execution node
On the Flow blockchain network, both the Execution and Collection nodes are implemented to increase throughput time and network scalability, while the Verification and Consensus nodes are in charge of network accountability and security.
The daily average throughput time on the Ethereum network is about 13 to 15 transactions per second, which is insufficient for large-scale use. Flow’s intent was to improve on this metric, building scalable DApps with high security while truly maintaining decentralization.
The Ethereum blockchain is the most popular blockchain for creating smart contracts, with Ethereum smart contracts being known for their immutability. After execution, transactions performed on the Ethereum smart contract cannot be changed, adding security and increasing trust.
You’re probably wondering what happens if a transaction is flawed. Flow allows users to release smart contracts in a beta state on its mainnet, so the original author of the smart contract can update the code stepwise. Users can decide whether to use the code at any instance or wait for it to be updated completely.
When the author is certain that the code is safe and there is no need to control the code again, the smart contract becomes immutable. The ability to update the smart contract on the Flow blockchain network makes it flexible and better optimized for end users.
The Ethereum blockchain account is based on a four hexadecimal number private key of 256 bits or 32 bytes. A public key is generated when mathematical operations are performed on the private key. The public key is taken through a series of mathematical operations to obtain a valid address. It is a unidirectional process, so a private key cannot be created from a valid address.
In the Flow blockchain, account creation happens automatically and can support multiple public keys. First, public and private keys must be generated via either the Elliptic Curve Digital Signature Algorithm (ECDSA), a variant of the Digital Signature Algorithm, which uses the elliptic curve cryptography, or Secp256k1 curves, which are parameters of the elliptic curve used in Bitcoin’s public key cryptography.
The transaction is then sent to the blockchain. With this process, new account storage is initialized and the generated keys are assigned to the account. On the Flow blockchain, each account has
1 to n, one-to-many, public keys mapped to it. For every public key, there is a corresponding private key owned by the account holder.
Another difference to consider lies in the deployment of smart contracts. On the Ethereum blockchain, smart contracts are deployed to individual accounts, while on the Flow blockchain, accounts can have multiple smart contracts deployed simultaneously.
Additionally, on the Ethereum blockchain, an Ethereum account has the ability to track all tokens and smart contracts it has interacted with through Ethereum event logs. Ethereum does not provide a single store for account assets in smart contracts. On the other hand, due to the Flow blockchain’s resource-oriented programming paradigm, users can effectively track smart contracts with which their resources have interacted.
Flow Price Prediction: Expert’s Opinion
Flow forecast by Waller Investor indicates that it is a high-risk investment option for one year period since the market sentiment is not favorable. Your current value might be devalued in the future.Wallet Investor
FLOW price forecasts by Price prediction suggests that the average price for the year 2025 might be around $24.12. Crypto analysts believe that there will be a bullish trend in 2025. The minimum price and maximum price for the year are forecasted to be $23.29 and $27.93, respectively.Price Prediction
Flow forecast by Digital Coin Price shows that by the year 2023, the average market value might be around $8.56. The price analysis indicates that the market volatility will be high for the coin, so short-term investors may follow suit and take advantage.Digital Coin Price
Flow forecast by GOV Capital shows a declining tendency. The average price in the first quarter of 2022 is predicted to be $6.24. Trading in Flow may be risky, so keep track of the price action if you wish to invest in the coin.GOV Capital
Flow forecast by TechNewsLeader reflects that Flow might be a nice option in the long run. As per the forecasts, the future maximum price for the year 2027 is predicted to be around $34.96.TechNewsLeader