Sugarcane Podcast

How does a transaction work? | Verification, Confirmations, and Fees | Ep. 03

July 25, 2023 Sugarcane Episode 3
Sugarcane Podcast
How does a transaction work? | Verification, Confirmations, and Fees | Ep. 03
Show Notes Transcript Chapter Markers

We dive deep into the world of transactions, from initiation to verification, unraveling the mystique of block confirmations. Learn the critical role miners play and get clear insights on transaction fees (including gas fees). Plus, we explore the dynamics of transaction speed and the factors influencing it. Perfect for novices and experts alike, this episode is your key to understanding the nitty-gritty of blockchain transactions.

πŸŒπŸ’» The Beauty of Decentralization
πŸ“œπŸ”— Smart Contracts: The Digital Agreements
πŸŒπŸ’‘ Ethereum and Open Source
πŸ€πŸš€ The Power of Community Collaboration
πŸ”’πŸ›‘οΈ Security and Trust
πŸš€πŸŒŸ The Future of Crypto

Links: πŸ”— Website - Podcast - YouTube - Twitter - Discord - TikTok

Disclaimer: 🚨 The information provided across all of Sugarcane's communication channels is for informational and entertainment purposes only. It should not be construed as financial or investment advice. Consult with a financial professional before making any investment decisions.

Rudy:

Hey everyone, welcome back to the Shuriken podcast. It's me, Rudy And Sheldon. So, Sheldon, when you go to a party and people start asking almost any question, do you like automatically have a reason just to talk about crypto?

Sheldon:

There's the most right. Yeah, dude, like either that or my second link. My second one's not thriving, so I spice bought it. So it's a suck you that. Yeah. Yeah, dude, i'm pretty bad plan, so I just want to take care of.

Rudy:

So for anyone who's not watching and listening, Sheldon has a very beautiful suck you that you must see because you can take care of it. But it's like you need like water like once a week or something. It's kind of easy, it's better.

Sheldon:

But the windows are 6%.

Rudy:

Just make it easy. Yeah prove that you have a green thumb On a succulent or cactus. Hopefully one day we'll have some sugar cane plants at home.

Sheldon:

Yeah, for sure, dude. So yeah, exactly, that's what happens.

Rudy:

So you go to a party, you talk about crypto, move it to succulents and then it goes back to crypto.

Sheldon:

Yeah, pretty much that's my. I'm a pleating nerd dude.

Rudy:

You know, it's impossible to like not talk about it, and I always like feel bad because I was like asking me what do you do? I'm like well, how much do you know of crypto? That's how you, how much, like how much I do in crypto, because it's like a level of complexity.

Sheldon:

Yeah, you do that.

Rudy:

And when people like glaze over, i'm like, all right, let me just talk about you, because I don't want to talk about this. It's a pretty interesting topic, yeah, and after this episode, succulent prices are going to rise up and and maybe I'm hiding and should have gotten some affiliate marketing for this one.

Rudy:

But yeah, man, like these things are so like, as I was working again in crypto this week, I was working with you, know different depths, And we're talking about the last return of Madamask and working with Uniswap or different DeFi protocols, And I'm thinking, all right, I'm interacting with these smart contracts, but I don't read it Like I don't know what's going on. I don't know what a full smart contract is doing or saying. I just trust the company that I'm interacting with and I trust the community that promotes it or can recommend it. So I definitely need your help to learn a little bit more about what is a smart contract and how does it work.

Sheldon:

Yeah, so kind of a good, simple way to think about it is like a smart contract. It's like a website, almost right. Like if you are going to amazoncom, right, you don't actually know where the website itself is hosted, but you go to the actual website and you can interact with it and do stuff on it, right? So a smart contract in a sense is a separate piece of code that lives on a blockchain, kind of like, is what an internet website and anyone can actually interact with that smart contract or set of smart contracts to fulfill some purpose, right? And Amazon case you want to buy books, you buy a book, it gets sent to you. In the case of a smart contract that allows you to lend money and get returned back, you could lend your ether to it and then over time, you can actually send back whatever returned back to your contract wallet.

Rudy:

Yeah, And do people code this? Like, how does the actual code work? And me, I guess I can code website. I develop, I'm developing it myself. but nowadays you kind of can make a website without even knowing or making a website just using Squarespace or using different awesome web two products out there. Yeah, Smart contracts are human made, So there's possibility for human error in a smart contract. right, It's like I can't. how do you know? it's perfect.

Sheldon:

It's still like an odd topic I just thought about like a human maze, like human maze, like almost organic. Is this like?

Rudy:

an organic smart contract? Yeah, no, but I don't know Organic farm fed.

Sheldon:

Yeah, stickyland fed, nah. Like that is like you have. people can code these smart contracts right, like no, it's really just an open space where you can construct whatever application you can dream of on that application or otherwise. Like in 2021, people made a lot of NFTs and those are kind of digital, collectible versions of a smart contract or like an actual application. But you can create anything you really want and deploy that onto Ethereum, specifically because Ethereum is like what's called an EVM or it's Ethereum virtual machine, and of a technical language would basically say that allows you to create more expressive applications that anyone can interact with on a blockchain.

Rudy:

And Ethereum is all open source right, so the entire thing is readable. Like you can go on Ethereum, just blockchain, download the whole thing, see everything, see every smart contract to, since they live on it.

Sheldon:

Yeah, so like the smart contracts is just like snippets of code that do something right. And Ethereum, as you said, is completely open source And by nature of being on Ethereum or any blockchain, really it also is open source. Like the actual code you create is public to be visible And that's beautiful, right. Like you can create a lending platform that you can lend money to and get returned. From that you can see actually details of what the code is doing, so you know you're not getting like scammed or fished for money, right, regularly speaking, like a regular consumer does not actually look at the smart contract code, as you wouldn't look at the code behind the website, but the fact that you actually have the ability to look at it tends to lead to better behavior.

Rudy:

And like people who are producing code that does what it says it does, Yeah, and it's funny how, like I personally trust open source more just because, like, all right, it's open source, i don't even read the code. I just trust it because other people who are much smarter than me like yourself, i can read the code and understand what's actually going on They are saying like, yeah, it's been verified by other people who've contributed and helped out the project. And also a really good way to like, if there was that person trying to like hack whatever code or infiltrate that it's like available to people to try to access and since there's so many people who can access it, they might actually be more contributing to the project as like a white hat hacker than like a black hat hacker.

Sheldon:

So people, don't have a difference between that.

Rudy:

That's a fun like.

Sheldon:

The white hat yeah, it's like, it's kind of even the legers like. Black hat basically means that you're hacking something for malicious purpose, like you want to hack it to like get money from them, like people who are black hat hackers black hat hackers of like government systems Yeah, yeah, yeah, no, they have government systems to expose whatever details of the government or they hack banks to basically get access to funds. But white hat hackers the people who actually just hack things or break things for bounty like this, especially the company is saying please find some exploit to our system So we can actually do better. They invite people who are developers to basically expose different bugs in their system so they can actually give them money for like to make the system more secure. That's kind of different thing like white hat versus black hat.

Sheldon:

And in the crypto space, like the beauty of it is that, given the fact that everything is open source, invisible one thing is like security like things do get more secure because people are being white hat hackers to basically expose vulnerabilities and help the teams build better systems. Another thing is that you can actually have what's called like interoperability kind of technical term, but like you now have people to, you can now build on top of other financial financial systems. Right, like you now have, like, these legal blocks of all these different pieces of code that you can now fit together to do more kind of complex things. Right, let's say, you have a lending platform and you can now create a whole options market on top of that. Right, like we have more complex financial experiments or derivatives that are based on some simple product and set of products. You can do more expressive stuff. That's the kind of beauty of, also, smart contracts and blockchain systems.

Rudy:

That's awesome because, as you're saying that, i'm thinking it could be so cool as some of my favorite apps or like Google or, you know, meta or Facebook, whatever Apple like if they had their code, open source people can actually go in like I think this needs an upgrade in this location. I want to contribute for this app, but you can't do that in your private code, but like open source code, you can actually contribute and request some feature or actually build the feature out yourself, and that's kind of like what's happening in crypto spaces People are building on top of each other and kind of building this ladder to heaven to have crypto heaven.

Sheldon:

Yeah, i mean to give you like a very tangible example. Like at Sugarcane, there's about 17 different financial products that exist on the blockchain right now that we've kind of collected together and built under this one application. So now there's like 17 different different products that people are building and the separate teams that we actually haven't even talked to. That we can now integrate their product into our actual application to now give access to different types of financial services across different blockchain networks, and we don't have to even talk to the team itself or you can just take whatever their open source code shows and integrate that and actually build it out. So it's kind of cool way to see that, like, the actual Sugarcane product is a collection of about 17 to 30 different products underneath.

Rudy:

That's so cool. It's like a win-win situation, Like they're building it out because they want people to use it and you're using what they built out and making it easier for other people to use. So the Sugarcane is like getting all these smart contracts like lending and staking and liquidity providing our provisions. Yeah, You can do all that without having to even worry about make sense. You can read the open source course you have to worry about like that's not asking for permission, it's permission, so you don't even have to ask for permission, You just use it.

Rudy:

That's a cool part. It's like permission, like you don't even need permission, you just got to give them credit. Yeah, i'm using this protocol. That's what I'm going to use my basis off of And everyone can also verify that we are indeed using their protocol, like Uniswap or Rocketpool or Ave, and they know that. Okay, i know Ave is legitimate. Shurikane is using Ave. They made it easier way to use Ave And that step looks legitimate too, so that just sounds like a win-win for everybody.

Sheldon:

Yeah, for sure. I mean, like the actual Shurikane product. Also, for people who don't know, ave is one of the largest lending DAPS. We're saying the decentralized application, which is a series of smart contracts on the Ethereum blockchain that we actually integrate to enable lending of crypto assets. So that's one product that we actually use pretty properly, pretty regularly. So Shurikane product itself is a network of about 30 to 40 different smart contracts on Ethereum blockchain and a number of different other blockchains that also connects all these different services And so when it comes to like the actual end consumer application, they see an application, but behind the scenes there's a number of different smart contracts that talk to all other smart contracts on the Bitcoin or on the Ethereum blockchain to make that interaction easier and simpler. All done behind the scenes but for the consumer they don't have to actually think about it. That's.

Rudy:

I love what you just explained. There is like a ton of information. And it's so nice that it's all behind the scenes And I don't have to worry about it.

Sheldon:

You did all the craziness. I don't think my dude Yeah it's like it's a.

Rudy:

It's a truth, though, like not everyone has time to think about everything that's going on. I mean, i want to and I try my best to, and I speak to as many people who are working on it to make my life a little better. Yeah, but it is like it is complicated in a technical manner, and that's why it's so nice to have an open source. It's like it's not just one person or one company taking on the brunt of everything to build something out. It's a collective of individuals who are working together to create something for everybody, and it can always be expanded on. Like if Google disappeared or was going downhill, it's because of the CEO and the teams that are working there.

Rudy:

There's a lot of people working there, but no, i can't just go in and pick up Google and help them or fix it. I can't even fork it. You can't take it somewhere else and Rebuild on it Yep, but with crypto you can't. You can actually help out projects that are suffering or don't know something, and you can, you know, guide them in a certain direction if you wanted to, and a lot of them are open for that. That's what they want from the community. Community literally makes a crypto project thrive. And for sure, i know we were talking about smart contracts last. well, interacting with smart contracts last episode with sure, i won't have to necessarily interact or improve all these different protocols I'm using right Can just log on to Shurekeen and that handles everything for me in terms of connecting to different protocols, approving transactions, all that fun jazz from episode two.

Sheldon:

Yeah, for sure. And also even like one thing we didn't talk about yet. At least it's about gas. Like gas is the kind of way in which it's kind of like a tax right. The way in which you actually create a transaction on any blockchain is you pay a certain amount of gas or tax to do that, and that can get pretty prohibitively expensive when you start talking about interacting with smart contracts on Ethereum, for example just because Ethereum itself is a pretty valuable asset and that it goes boom and bust cycles and it gets pretty pricey to do things. But that's also something we're abstracting away, we're kind of hiding from the consumer. So if you're interacting with any blockchain through the Shurekeen application, it's all free. It's like it's completely no cost. It makes it very easy for you to actually interact with any financial service. That's whatever you want to do there. It's also free for you to do that.

Rudy:

That makes sense. Love that It's free. It's perfect. Thank you, it's all I want to say.

Sheldon:

Free things, free things in the second one.

Rudy:

Free food tastes better. Free interactions taste better, Just like. might as well just do that. It's great. That's a beauty of open service. That's beauty of the crypto space. You can do things like that because you can interact with whatever and put however you want. Creativity is a limit. Do you feel like this is, I guess? do you feel like crypto could be where it's at today if it wasn't for such openness?

Sheldon:

I think, to freeze the question a bit differently, it's more of like why does openness matter? versus like existence systems. I think it's about the internet resistance today. It's pretty simple to use, but there's a lot of trade-offs when it comes to that. You actually don't know where your information is flowing to. A lot of people who have access to your information that you actually don't approve of.

Sheldon:

You're trusting centralized entities that do things on your behalf to make the experience simpler. By the end of the day, they can always do shady stuff with your money or, if you're depending on certain finance institutions, they can block you from certain activities that you want to get access to. It's a reason for crypto being relevant and necessary. It's for the fact that there is no central person there and all the code itself is auditable, so it's completely visible to see what's happening to your funds or information as it's flowing through the system. And if you may not be technical enough to understand and look at it specifically, there are people who are also technical, who is also in their best interest to actually just look at it themselves. So you would find out from someone eventually that something is sketchy. So I think the beauty of it is that the fact that it is open makes it easy for people to sound alarm if there's something going on that's malicious.

Rudy:

Exactly. And if you're building a company based off a protocol just Aave or other protocols you yourself want to make sure you're using something that's good and legitimate. You don't want to hurt your own company or your own reputation without first double checking what you're using. So, like if you're going to use some tool at home, like you want to make sure that tool is good, like you're going to do your research, make sure it's reliable, before you use it for yourself and before you tell all your friends what you just used.

Sheldon:

Yeah, you look like back in 2008 or 2009, when Facebook, for example, had a huge open API for anyone to use. Companies like Zynga started popping out where they created an expressive game that people can actually use in a social context. But eventually Facebook should have the API. Now companies whose whole life depended on getting access to this open API from Facebook deleted, disappeared overnight. Zynga kind of crashed after the fact that Facebook closed their API, and so, with crypto systems that are open and accessible to anyone, it makes it virtually impossible for you to get like D-platform or D-apped, d-api, just because all the information is public and open and immutable, so it can't be changed, and so now you can actually have the assurance that you're building on kind of sound foundations. That's also another kind of possibility of like it's kind of open source, immutable context of crypto.

Rudy:

Yeah, i didn't even think about that. Yeah, that makes so much sense because it needs to stay open. It's core has to always be open, forever, just so We don't have that fear of shutting down and everyone that's building on that aetherium network Can always work together, together to make sure aetherium stays alive, because it's in everyone's best interest to support each other.

Sheldon:

Yeah, there's no competition.

Rudy:

Decentralization, every morning notes and and supporting each other man, we have so much more to go and like very big what 19 minutes. And it's like we have a lot more episodes to go and I can't wait for it, man. So It's like smart contracts, open source Are they safe to use? Yeah, if the person that is checking them is. You know, there's people in the community are checking these contracts and make sure they are usable, safe and secure For the use of the public, because it's in everyone's best interest. It's like you have to have a whole episode on game theory too, because that's where this all lives off of is everyone winning together and growing together and lifting each other up rather than pushing each other down? so Thank you for lifting a soft shell, then.

Rudy:

Appreciate you, bro, appreciate you looking at my succulent my immaculate, succulent. That's the thing you are. That's our Savior right there.

Sheldon:

Yeah, for sure.

Rudy:

See you next week, everyone and again. If you have any questions, let us know.

Sheldon:

Okay, you see you.

Understanding Smart Contracts and Blockchain
The Benefits of Openness in Crypto