With blockchain technology finding applications in DeFi and cryptocurrency, consumers of financial services are now on an equal footing. If you want to know why you need another blockchain when there are so many popular options, reading up on the Celo blockchain’s basics will assist.
Payments, currency exchange, passive income possibilities, and lending are some financial services that may be accessed with the help of cryptocurrencies and DeFi apps. These services are available to you directly, without intermediaries or red tape. You could think the Celo token is nothing more than a clone of other cryptocurrencies right now.
You can use DeFi and crypto apps on any computer with an internet connection. As a result, Celo has become a severe contender in the race to bring the mobile-first strategy to the blockchain industry. If you want to improve your career chances, become known as a blockchain specialist, and learn the basics of Celo, its architecture, and how it works, then you should check out 101 Blockchains’ Blockchain Certifications.
Why Does the Blockchain Landscape Need Celo?
With the advent of blockchain technology, access to financial services took on a new meaning. Also, think about how people slowly move away from desktops and laptops and toward cell phones. Every day, billions of dollars worth of financial transactions occur over the phone, according to an analysis of the current global financial ecosystem.
Countless individuals across the globe utilize their mobile devices to conduct everyday purchases or online transactions involving money. Celo blockchain use cases and smartphones may leave you wondering. Mobile-native apps are now paramount for completing financial transactions or transmitting money. Apps like Venmo and PayPal have proven that mobile-first financial services are essential for a large number of individuals around the world. However, the advantages of DeFi and crypto have so far eluded mobile-first banking services.
Blockchain Imposes a Massive Burden on Cryptocurrencies
The distributed ledger of nodes is the only way to ensure the security of data-intensive crypto and DeFi transactions on the blockchain. The distributed ledger’s nodes maintain tabs on the ledger, checking that newly added transactions match up with the current data. On the other hand, every network transaction must be recorded by the nodes, meaning there must be a lot of data and processing power.
Consequently, a computer is required for crypto transactions and keeping the wallet in sync with the blockchain. Contrarily, cryptocurrency transactions are beyond the capabilities of a phone’s processor. It would be best to have a blockchain that facilitates a mobile-first strategy for cryptocurrency and DeFi access.
Foundations of Celo
Celo can be better understood by thinking back on where it came from. The explanation of what the Celo blockchain is and how it works is one of the primary points covered in the overview. Users all over the globe may now make easy financial transactions using cryptocurrency thanks to this blockchain network. In addition to its native blockchain, the Celo platform has two native tokens.
In 2017, two executives from GoDaddy and an MIT professor created it. Intriguingly, $46.5 million was invested within two years after Celo token sales caught the eye of big investors. General Catalyst, Andreessen Horowitz, and Social Capital are among Celo’s primary backers. The Celo team patiently built the platform’s infrastructure to achieve their goals. Celo is an exciting platform for web3 activity because its features centre on hosting decentralized applications.
Architecture of Celo
The blockchain’s architecture would be the next significant aspect of Celo’s endeavour to stand out. Before locating a Celo blockchain explorer to track mobile-first transactions, you must familiarize yourself with the Celo Stack. Designed from the ground up to be user-friendly, Celo is perfect for those who have never dealt with cryptocurrency before. Additionally, end consumers with less expensive gadgets and limited internet access might benefit.
Celo employs a full-stack strategy to accomplish its goals, meaning it builds each stack layer with the end user’s needs in mind. Additionally, Celo’s full-stack design considers the requirements of additional stakeholders, such as node operators, to enhance the end-user experience.
Celo Blockchain
Celo blockchain, an open cryptographic technology enabling transactions with smart contracts, is the first component of Celo architecture. Smart contracts and associated transactions can be executed decentralizedly and securely with its assistance.
To facilitate the development of smart contracts, the blockchain code incorporates Ethereum capabilities while preserving full EVM compatibility. Additionally, it adheres to a BFT consensus process, like Proof of Stake, which is a Byzantine Fault Tolerance algorithm. It has its own unique pricing system, transaction format, client synchronization protocols, and block structure, and it doesn’t use Proof of Work consensus.
Core Contracts
Core contracts in the Celo tech stack are the second key piece to help you grasp Celo. The Celo intelligent contracts that comprise the platform’s core contain the blockchain’s logic and other essential features. The Celo token’s functionality, governance requirements, identity attestations, and Proof of Stake consensus procedures are all laid out in the core contracts. Through decentralized governance systems, users can modify and control intelligent contracts.
Applications
The Celo platform’s end-user applications are the subject of the following architectural highlight. Regarding apps that facilitate account management and safe payment processing, Celo Wallet was an early pioneer. An integral part of the Celo blockchain use cases across sectors are applications. Celo apps might be third-party mobile or backend programs that issue transactions over blockchain technology.
Applications could potentially use programming interfaces provided by Celo Core Contracts. Another possibility is that outside parties will develop and release intelligent contracts that their apps can use. Applications can also utilize centralized cloud services to provide unique features, such as the Celo wallet’s transaction activity stream and push notifications.
Topology of Celo Network
Understanding the potential of Celo requires more than just looking at the design of the Celo blockchain. Please pay close attention to the Celo network’s topology to learn how it differs from traditional blockchains. Varying devices with varying Celo blockchain software settings comprise the Celo network’s topology. The three parts that makeup Celo’s topology are illustrated here.
Validators
To create new blocks, validators must first collect other nodes’ transactions and then execute relevant, intelligent contracts. The validators then use a Byzantine Fault Tolerant (BFT) consensus mechanism to guarantee that the network state advances.
You can utilize the Celo blockchain explorer to see how BFT protocols fare with hundreds of users. Additionally, it guarantees that it could withstand up to one-third of the participants behaving maliciously. Furthermore, the Proof of Stake process limits the selection of nodes to serve as validators. Discover the world’s first Blockchain Skill Paths, curated by industry professionals, to help you learn the ins and outs of blockchain technology. Right now!
Full Nodes
The most intriguing aspect of Celo network machines is that they are neither elected nor configured to act as validators. Contrary to Proof of Work networks, Celo nodes are not involved in mining. Serving requests from light clients and forwarding transactions are the main objectives of the nodes.
Payments might provide a “permissionless onramp” for community members to earn cryptocurrency, while nodes would get transaction fees. By exchanging newly created blocks, full nodes can keep a partial blockchain history. Furthermore, complete nodes can join or exit the network based on their interests.
Light Clients
Light clients would be installed on each user’s device by applications like the Celo wallet. Connecting with complete nodes is possible using the lite client’s instances of the Celo blockchain software.
Light clients connecting to full nodes can request to retrieve account and transaction data. Extra features include the ability for light clients to sign and submit new transactions. But how can light clients learn the ins and outs of cryptocurrency, trade, and investment without receiving updates about the complete blockchain’s status? The Crypto Fundamentals, Trading, and Investing Course is now Enrolled.
Working of Celo
The Celo blockchain’s architecture and topology were described in detail, which helped to explain how it worked. Using a decentralized and transparent methodology, the Celo protocol has the potential to let consumers make crypto payments using their phone numbers as public keys.
Application developers can use Celo’s encrypted blockchain protocol to facilitate crypto transactions and light client computations. Light clients eliminate the need for consumers to store enormous databases on their mobile devices.
The most impressive feature of the network or the Celo blockchain explorer is the ability to synchronize instantly, even on sluggish connections. Celo is optimized to handle poor bandwidth, high data tariffs, and increased latency. The goal is to make web3 assets, such as cryptocurrency and DeFi, accessible on mobile devices. Additionally, the Celo network employs zero-knowledge proofs (ZKPs) to enhance performance while guaranteeing security.
Due to its many benefits, Celo has quickly gained popularity among web3 users. The main advantage of using the Celo blockchain would be prioritizing mobile use cases. Additionally, Celo is prepared for innovation and change thanks to recent improvements like adding compatibility with Cosmos, NEAR, and Solana blockchain networks.
Conclusion
Celo blockchain is helpful in many ways, as seen in the comprehensive overview of the project and its use cases. Most importantly, Celo can enable mobile web3 and blockchain transactions. Neither buying bitcoins nor using a DeFi application requires a high-end computational hardware infrastructure.
The novel design of Celo incorporates light clients to achieve resource efficiency, making it easier to run a blockchain node. Celo is a crucial tool for the future of web3 because of its dedication to innovation and change.
