What is Flow? (FLOW)

The Beginner’s Guide

Imagine this: You launch a hugely successful decentralized application (dapp) on Ethereum, but your game is so popular, it renders the blockchain itself almost unusable.

Sound far fetched? That’s the story of CryptoKitties, a hugely viral trading game launched in 2017 that allowed users to buy, collect and breed digital cats.

Frustrated with Ethereum, the developers behind CryptoKitties set out to solve the technology problems they encountered. In the process, they created a new blockchain designed specifically for applications like the ones that they had helped popularize.

The Flow playground, launched in 2020, allows developers to create and trade a particular type of digital asset called a non-fungible token (NFT). An NFT is like other crypto assets in how it can be bought, sold and exchanged over the internet without a middleman.

However, there’s one crucial difference. With an NFT, every asset on the blockchain is unique, and it trades for its own specific price. (You can think of an NFT as a kind of digital trading card.) For more information on NFTs, you can visit Kraken's "What are Non-Fungible Tokens?" page located in our Learn Center.

With Flow, the team behind CryptoKitties is seeking to create a new platform that allows these types of applications to attract a larger number of mainstream users.

For more regular updates from the Flow team, you can bookmark the Flow blog, which includes tips and tutorials on the network and its evolving technology.

Who Created Flow?

Flow is the product of Dapper Labs, the company behind the CryptoKitties blockchain game.

Led by founders Roham Gharegozlou, Dieter Shirley and Mikhael Naayem, the team developed Flow as a platform for blockchain-based games and digital collectibles.

Previously called Axiom Zen, Dapper Labs unveiled Flow in 2019 after announcing it had raised $11 million in funding led by investor giant A16z.

Dapper Labs underwent a second funding round led by NBA stars Andre Iguodala and Spencer Dinwiddie, intended to be used towards the development of blockchain-based games on Flow.

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.

Architecture

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.

Developer tools

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.

Why Does FLOW Have Value?

The FLOW cryptocurrency is key to maintaining and operating the Flow blockchain.

First and foremost, developers can incorporate FLOW in their dapps as the main currency used for payments, transactions and earning rewards. Developers can also create their own custom cryptocurrency on Flow if they wish.

In order to become a node, users need to own and stake FLOW tokens, which also allows them to participate in the governance of the platform. Flow rewards these users with a combination of newly minted FLOW and a portion of the transaction fees.

Importantly, since there are four different node types on Flow, the revenue assigned to each role is adjusted automatically based on the amount of FLOW staked by each cluster of nodes.

Users who do not want to run a node can also delegate their stake to professional operators to participate in the network on their behalf.

Why Should I Use Flow?

Flow may be of interest if you are a game developer looking to launch an application on a blockchain using a cryptocurrency.

Investors may also seek to add FLOW to their portfolio should they believe in the future of blockchain platforms focused on game development and collectables.

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