If blockchain wants to take over the world, it’s going to have to get a lot faster. We’re adding some of the tokens trying to make it happen.
With news this week that Ethereum’s latest scaling solution – the unfortunately named Optimism – has been delayed until July, focus has once again turned to the fact that the world’s second largest blockchain is still using the same transaction infrastructure it was back in 2017.
The main difference being that in 2017 nobody was using Ethereum, while in 2021 many, many people are using Ethereum and right now the network is perpetually clogged with the digital equivalent of those ‘fatbergs’ they keep pulling out of our sewerage systems.
The result has been slow transaction times and eye-wateringly high gas fees (i.e. the cost to have your transaction processed by the network). The DeFi ecosystem, overwhelmingly built on Ethereum, has slowed to a crawl as the ability to buy and sell tokens on Uniswap has become constrained by your willingness to pay US$50 for the privilege.
If only there was an easier way!
Over the last few years, a number of new players have entered the so-called ‘application layer’ space, offering transaction throughputs hundreds, if not thousands of times faster than Ethereum (which currently tops out at around 14 transactions per second).
These are networks such as Algorand and EOS – both being added to CoinJar this week – as well as Solana, Polkadot, Waves, Tezos, Cardano, Cosmos and many more.
While there are myriad incomprehensibly obscure technical differences between these platforms, they’re all unified in offering faster, simpler and more accessible blockchain services to both users and developers. Surely that should be enough to knock Ethereum off its perch?
Death to the king
You’ll often see these tokens described as “Ethereum-killers”, but that’s not a particularly helpful way of approaching things. For one, no matter what you might think about the superiority of any of these alternative networks, if Ethereum was, in fact, killed, the collateral carnage to the blockchain space at large would make the 2018 crypto winter look like an all-expenses paid trip to Fiji.
Ethereum is simply too big, too well understood and too secure to be so easily displaced. When Visa announced on Monday that they were going to start settling transactions in USDC, they were really saying that they had chosen Ethereum as their crypto settlement solution. It’s the very nature of blockchain technology that the more it’s used, the more secure and stable it becomes. Ethereum’s first mover advantage is profound. And when it does finally scale? Watch out.
But the cryptoverse is a big place and if it comes anywhere close to fulfilling its potential as the backbone of Web3, there’s going to be room for a lot of different protocols, each with their own specialties and use cases. After all, the internet is built on top of a whole bunch of interlocking protocols and each of them is equally important in creating the modern web experience that we so love/tolerate.
The Internet of Value is coming – application layers give you the chance to own some of the land it will be built on.