On the peak online shopping holiday, Black Friday, the average person buys* $335 amount of products a day online -- whether it's through Amazon, Wish.com, Alibaba, or smaller online merchants.
You might be surprised to find that there are many similarities between shopping online and using Dapps on the blockchain! Let's take a look at how an average online shopper could learn how to use dapps on the blockchain. If this works for your own understanding, you could share it with your non-crypto-native friends or family, even your grandma!
Disclaimer: DeFi Desk is an entertainment platform, and not a source of financial advice. You must remember that you are wholly responsible for any and all investment decisions that you make, whether they lead to life-changing profit or loss. You are the sole driver of your caravan, which may include your family (if you are providing for one), so do consult a professional and make sufficient research before investing in any products mentioned.
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1. Account balance
2. Buying an item
3. Gift cards
4. Amazon Prime
5. Tracking transactions
Blockchain wallets work almost like bank accounts, for your activity on the blockchain. To use your wallet, you need to have a balance of tokens in it, just like how you would need a valid credit card or bank account to shop online.
Buying an item
Buying and selling on the blockchain is called 'swapping', and is a little different from online shopping. This is done on a token exchange called a DEX (Decentralised Exchange). However, the fact is that most token exchanges on the blockchain have a similar interface, thanks to most of them copying the source code of Uniswap. To make a trade, you simple select the first token that you want to sell, and the second token that you want to buy. You can then check the price, and inverse it if you want.
Price slippage should be as low as possible (0.1%), only increase it if you know what you are doing.
Most of the blockchain tokens you'll see in DeFi function more like gift cards than money. Each token has a specific usage that is prescribed to it, like the terms and conditions of a gift card.
Using a DEX, you can exchange your gift cards for money (which would be stablecoins, such as USDC, DAI, Tether, UST), or exchange it for someone else's gift card (e.g. swapping $SUSHI tokens for $TITAN), which can have a different usage.
$TITAN, for example, can be used to make $IRON tokens, which are a form of stablecoin. Meanwhile, you can get $SUSHI as a reward in addition to gaining fees from depositing tokens in a kind of contract called Liquidity Pools.
I'll link a guide to liquidity pools once I've written one, but in the meantime, here's a great excerpt from Mark Cuban:
And he also explains about reward tokens (also known as liquidity mining):
This makes that tokens have a lot of different use cases on the blockchain: they can be used as money, or used to gain other tokens, or used to provide liquidity which gives token holders a source of income! And there's one more special use case which we haven't described yet. Can you guess what it is?
I'll give you 5 seconds...
Yes, you've guessed it right! There are certain membership privileges on the blockchain that can be unlocked using tokens.
One example is apy.vision. They provide analytics and figures for liquidity providers to optimize their capital. In order to access some of the advanced features, you need to hold $VISION tokens in your wallet to qualify.
A simpler one is $UDT, which is a token issued by Unlock Protocol. They provide a way for content creators and publishers to privatize content, and allow only members to see it. Members would have to buy $UDT tokens and use it to pay a recurring subscription set by the content creator.
There also NFT's that grant special access to member's-only websites or chatrooms! These are a little different from regular tokens in that there is a very limited number of unique tokens that each have their own distinct identity. But most of them qualify for the same privileges. Take BAYC for example. Members get access to a community grant for developing their own projects:
And even get a free flying tour of Hawaii:
Once you've made your purchase, you begin the anxious wait for your parcel to arrive--which you can often track using the delivery number provided by website or the courier company.
You get a code in your email inbox, and after that it's as easy as copying and pasting it in the tracking website to find out where your parcel is:
In crypto, this is is exactly how you would track your transactions on the blockchain. Check this out. Let's say I'm making a swap on Quickswap (the popular decentralized exchange on Polygon/MATIC chain). The website would show me while the transaction is pending. And this would link to a block explorer (think of this as the courier tracking website):
You can also track your transaction manually by gong to the block explorer and paste your transaction hash (the unique code which identifies your transaction) in the search bar:
And... tadaa! Your transaction appears. Keep in mind it might take 30 seconds or a minute for your transaction to appear. At times when the network is congested, it may even take a couple minutes to show up, even if the transaction has succeeded. You can see the transaction details, such as time sent, pending/approved status, number of confirmations, the fee paid to the miners/validators, value of the transaction, etc.:
But if it shows as "success", that means your transaction has been validated and is now forever recorded on the blockchain. :) Enjoy your purchase!
That's it for today, crypto-cowboys. See you again soon!
*Correction to the shopping statistic added as requested (17-06-21)