What is cryptocurrency Flow (FLOW) and how does it work?

What Is Flow (FLOW)?

Flow is a blockchain-based decentralized ecosystem and platform with scaling solutions for interactive experiences, decentralized application projects, and blockchain-based games. The Flow network focuses on providing a scalable environment and architecture for fast transactions without congestion, to create an environment for non-fungible tokens, dApps, and games. NFTs can be created and traded as well as other cryptocurrencies, while the crucial difference is that every NFT is unique and has a different price, which is why NFTs are known as collectibles.

Flow has its own project on the network, NBA Top Shot, and as the NFT market is booming, Flow could experience rising popularity as well. Flow offers upgradable smart contracts that can be patched to fix any bugs, a finality that is achieved in seconds, and an easy way to build dApps and create NFTs with Flow’s easy-to-learn programming language, Cadence.

Flow resolves problems with scalability seen on the Ethereum platform without the use of sharding, instead of employing the efficient Proof of Stake protocol. That is how Flow enables the smooth running of operations and minimizes congestion on the network for dApps and blockchain games such as CryptoKitties.

How Does Flow Work?

Flow uses the Proof of Stake protocol to achieve scalability without the use of sharding, which is a common scaling technique for increasing speed and network capacity. Flow distributes the work on the network across the nodes that support the system, with different nodes assigned different tasks based on their technical capabilities. An increased blockchain throughput is achieved by separating non-deterministic processes (e.g. forming transactions into a block) from deterministic ones (e.g. executing that block of transactions).

In order to reduce redundant effort, Flow uses a multi-role, multi-node architecture. To make the scaling of the entire network possible in an efficient and cost-effective way, Flow breaks down the validation process into four roles, distributing different tasks to different types of nodes. To increase efficiency, the nodes split tasks and participate in the validation of every transaction on the network. The four types of nodes are Collection Nodes, Consensus Nodes, Execution Nodes, and Verification Nodes.

Who Are the Founders of Flow? (History of Flow)

The Flow project was founded by Dapper Labs, which is the same team that is responsible for developing one of the most popular dApps and blockchain games hosted on Ethereum, CryptoKitties. CryptoKitties experienced huge popularity and still continues to attract blockchain enthusiasts and fans of blockchain-based collectibles. 

With the increasing number of users, Ethereum proved to have issues with scalability, so CryptoKitties faced problems with operations, which is why the Dapper Labs team decided to create a scalable blockchain platform that would represent a highly functional environment for dApps and games such as CryptoKitties – Flow.

Flow launched in 2020 as a Proof of Stake protocol that allows developers to create, use, and trade NFTs, as well as to develop dApps and blockchain-based games on the platform. The founder of Flow is also the CTO of Dapper Labs, Dieter Shirley.

What Makes Flow Unique?

Flow network makes for a unique project that offers a highly scalable environment for developers interested in creating and using NFTs, which have experienced a rise in popularity in recent times. Flow’s architecture allows developers to build applications and cryptocurrency games on the platform without issues such as congestion.

Flow distributes the data and work on the network across different nodes, separated by their roles, so that the distribution enables scaling and an efficient ecosystem for blockchain developers. Flow might be a unique opportunity for investors who believe in the potential of NFTs and blockchain applications. Thanks to the efficient architecture, Flow enables fast finality for transactions and on-chain operations. 

What Gives Flow Value?

Developers can create their own applications on the Flow network, which gives the project its intrinsic value, determined by its technical capacity and technology. Developers can incorporate FLOW tokens into their applications and games, where FLOW can act as the main currency for payments and rewards. Developers can also use the Flow network to create their own tokens that can be used within their applications and can likewise be traded as NFTs.

Flow market value is affected by a multitude of specific factors that can cause the price of FLOW to change. Some of these factors are utility, the popularity of the NFT market, upgrades, developments, institutional interest, and other important news and events. The intrinsic value, which often doesn’t match the market price, is determined by the spectrum of technology, technical capacity, functionality, and use cases. The market price of Flow is subject to frequent changes in value due to the high volatility of the cryptocurrency market.

Flow FLOW

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Ethereum ETH

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How Many Flow Coins Are in Circulation?

There is currently a circulating supply of FLOW, out of a total supply of FLOW. 1.25 billion FLOW were initially created, but the supply has since increased as Flow uses inflation to pay validator rewards to stakers. However, Flow has placed a cap on monetary inflation to avoid diluting the value of FLOW tokens. New tokens are used to make up the difference between transaction fees and the guaranteed payment for validators, meaning the inflation rate will decrease towards 0% as transaction fees increase.

The number of FLOW tokens in circulation multiplied by the current price of FLOW in the market is equal to the market cap of Flow. The market cap ranks the cryptocurrency in comparison with its peers and determines its market share.

Other Technical Data

Flow divides the network’s architecture by using multiple nodes with multiple roles that can work simultaneously on all transactions in different stages within the process of validation. As mentioned previously, these nodes are Collection Nodes, Consensus Nodes, Execution Nodes, and Verification Nodes.

Collection Nodes ensure the network’s connectivity is in order for dApps, also supporting data availability for applications hosted on the Flow network. Consensus Nodes have the role of deciding in which order transactions should be validated, while Execution Nodes can’t participate in decision-making, instead supplying computational power for executing transactions. Verification Nodes will double-check information submitted by Execution Nodes, before validating transactions, thus completing the process of validation.

Cadence is a programming language on the platform used to create smart contracts on the network.

How Is the Flow Network Secured?

Flow network uses the Proof of Stake protocol and divides its architecture into four stages when it comes to validation, so each node that has a certain predetermined task only processes a portion of data in a multi-task, multi-node environment. Thanks to this mechanism, transactions and operations on the network are more efficient, and due to the fact that the validation process is divided and the data distributed across multiple nodes on the network, the Flow network is also secured.

The network relies on nodes for validation and security but also uses Human-Readable Security to protect the network users from malicious applications.

The Flow team developed a new cryptographic technique called Specialized Proofs of Confidential Knowledge. SPoCKs mean that provers can demonstrate that they have access to certain confidential knowledge without revealing what it is. Each SPoCK is specialized and cannot be copied by another prover.

How To Use Flow

Flow can be used as a scalable environment for creating and building dApps and NFTs. Developers can also use FLOW as the main cryptocurrency within their applications, or they can make their own cryptocurrencies and tokens.

Every activity on the Flow network requires a small amount of FLOW, such as creating a new user account or storing assets. Projects built on the Flow blockchain may choose to use FLOW within their apps for peer-to-peer payments, charging for services, or paying out rewards.

FLOW can be staked to secure the network in return for staking rewards. Holders can either become a validator node or stake their tokens to another validator node.

There are plans for additional FLOW use cases once the network matures, such as collateral for secondary tokens, deposit for data storage, and participation in governance. 

FLOW can also be traded in the crypto market where traders can make a profit based on the difference between buying and selling price.

How To Choose a Flow Wallet

For users who have greater FLOW balances, the best choice might be using a hardware wallet such as Ledger Nano S that offers support for FLOW with top security for your funds. These provide the best security but tend to be more expensive and require more technical know-how. 

Aside from using a hardware wallet, you can also store your FLOW coins in the official Flow wallet which has payment gateways for multiple assets so you can receive and make payments as well as trade FLOW directly from your wallet. Another option is the Dapper wallet created by the FLOW team.

Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of FLOW or more novice users.

Online wallets or web wallets are also free and easy to use and accessible from multiple devices using a web browser. They are, however, considered hot wallets and can be less secure than hardware or software alternatives. As you are likely trusting the platform to manage your FLOW, you should select a reputable service with a track record in security and custody. As such, they are most suited for holding smaller amounts of cryptocurrencies or for those making more frequent trades.

Kriptomat offers a secure storage solution, allowing you to both store and trade your FLOW tokens without hassle. Storing your FLOW with Kriptomat provides you with enterprise-grade security and user-friendly functionality.

Buying and selling FLOW, or trading it for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.

Flow Proof of Stake

FLOW uses the Proof of Stake protocol as an efficient consensus mechanism. PoS requires less computational power and substantially less energy than the Proof of Work mechanism, which supports mining operations for validating transactions and generating new blocks. Thanks to the clever use of PoS and the distribution of data across nodes with divided tasks, Flow is scalable, decentralized, and secure.

Conclusion

Flow aims to provide effective and efficient solutions for scaling to allow developers to create and build applications and NFTs on top of the Flow network. Thanks to efficient scaling and fast validations, Flow is one of the latest and one of the most prominent projects that tap into the potential of the market of NFTs and the development of blockchain-based games.

With NFTs and dApps growing in popularity, Flow has a chance to rank as one of the top blockchain networks of its kind.

Join the crypto revolution and start your Flow journey today.

Flow FAQ

What Is Cadence?

Cadence is a resource-oriented programming language for developing on the Flow blockchain. It is designed to make sure that code is safe, secure, clear, and approachable.

What Is the Flow Playground?

Playground is the learning environment for Flow developers to experiment. Anyone can learn the basics of blockchain programming, create their own digital assets, mint NFTs, and build their own marketplace.

How To Buy Flow

If you’ve been wondering how to buy Flow, you’ll be thrilled to learn that buying Flow is quick and simple at Kriptomat with a range of payment methods available.

How To Sell Flow

If you already own FLOW and hold it in a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

Flow Price

Flow price is subject to frequent changes, in part due to the volatility in the cryptocurrency market. A multitude of factors may influence the price of Flow, which is why Flow may experience radical price changes and trend reversals in a rather brief period. You can check the live Flow price on Kriptomat.

As well as traditional factors such as market sentiment, the flow of cryptocurrency on exchanges, and the economy in general, FLOW price may also be affected by its dynamic inflation rate and the number of projects building on the Flow blockchain.

The current FLOW price is EUR.

The 24-hour trading volume of FLOW is EUR. FLOW is currently ranked of all cryptocurrencies by total market cap, with a market cap of EUR. It has a circulating supply of and a max supply of .

Register now to begin your journey into the world of Flow and cryptocurrencies with Kriptomat!

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