Intro
One of the most common criticisms skeptics raise on blockchain is their claim that its market is purely driven by psychological factors such as narratives or trends. This is quite the contrary, as all blockchains (excluding some private chains) have one clear source of value from which they can generate legitimate revenue: transaction fees. Regardless of what you’re trying to achieve with blockchain — be it store of value by stocking tokens, making cross-border payments, or interacting with decentralized applications (dapps) — everything in essence, is executing a transaction.
Simply put, the intrinsic value of blockchains comes from the cash flow based on the fees it takes for validating the integrity of transactions. In this writing, we will examine how leading blockchains are drawing organic transactions by breaking down their fundamental features and discover unique value propositions that Gno.land proposes.
Bitcoin — P2P Transactions With Immutable Scarcity
The one and only feature of Bitcoin is to ensure the integrity of peer-to-peer transactions of a provably scarce asset with an immutable fixed supply that’s built into the protocol. In a nutshell, Bitcoin is a decentralized bookkeeping protocol.
Organic transactions of Bitcoin come from demand for:
- Secure P2P payments in BTC
- A method of inflation hedging or speculation by trading BTC
Unfortunately, Bitcoin fails to capture a majority of potential transaction fees resulting from the 2nd group, as most of BTC trading activities take place on centralized exchanges due to the lack of smart contracts on the Bitcoin blockchain.
Ethereum — The Permissionless & Deterministic Virtual Machine
Ethereum was the first to implement a virtual machine (VM) into a blockchain. Its design ensures the deterministic execution of smart contracts, meaning that anyone can permissionlessly issue assets such as stablecoins or build composable financial primitives.
Organic transactions of Ethereum come from demand for:
- Secure P2P payments in arbitrary on-chain assets (ETH, stablecoins, etc.)
- A method of inflation hedging or speculation by trading ETH
- Interaction with dapps such as defi platforms, NFT marketplaces, or games.
Fortunately for Ethereum, smart contracts enabled it to transfer value denominated in fiat currencies with stablecoins and capture a portion of transaction fees from the 2nd group with decentralized exchanges, drastically increasing the use case of transactions. However, Ethereum’s low scalability resulting from its slow finality and throughput has left its fee markets highly competitive, making it undesirable for games or micro payments.
BNB Chain — The EVM Powered by Binance
BNB Chain is an EVM-compatible blockchain developed and incubated by Binance, the world’s leading centralized exchange. However, other than modifications on the consensus mechanism for performance enhancement, its feature set remains largely unchanged from that of Ethereum. Rather than bringing technical innovations to the underlying tech stack, BNB Chain collaborates with Binance to attract users by providing incentives, bootstrapping liquidity, and streamlining the on/off-ramp experience with tight integration.
Organic transactions of BNB Chain come from demand for:
- Secure P2P payments in arbitrary on-chain assets (BNB, stablecoins, etc.)
- A method of inflation hedging or speculation by trading BNB
- Interaction with dapps such as defi platforms, NFT marketplaces, or games incubated and supported by Binance
The above are mostly similar to those of Ethereum, meaning that what differentiates the key driving source of its intrinsic value is the UX improvements it offers to its users made possible through Binance. In other words, one can expect the success of BNB Chain to be tightly correlated to Binance, due to its high reliance. From a decentralization perspective, some could consider this a risk of a single point of failure.
TON — The VM Built for Telegram Integration
TON is another standalone blockchain with an alternative VM. Similarly to BNB Chain, TON is better known for its integration with Telegram, one of the largest online messaging platforms in the world, rather than its underlying tech stack. Yet, being highly accessible to Telegram’s massive userbase of 5.5 billion alone serves as a huge advantage from the adoption standpoint.
Organic transactions of TON come from demand for:
- Secure P2P payments in arbitrary on-chain assets (TON, stablecoins, etc.)
- A method of inflation hedging or speculation by trading BNB
- Interaction with dapps such as defi platforms, NFT marketplaces, or games
- Transfer of value from one account to another directly on Telegram
Still, none of the traditional components of Telegram rely on TON, meaning that from a technical perspective, TON is replaceable with any other blockchain. Once the Telegram Crypto Wallet starts integrating other blockchains, its selling point will become less unique.
What Makes Gno.land Different?
Rather than simply optimizing the performance or leveraging existing businesses similar to others that followed Ethereum, what makes Gno.land unique is its architecture which stores the raw code of every smart contract deployed on the blockchain. One of the key objectives of blockchains is to build a decentralized financial layer where “code is the only law”, yet all of the existing blockchains only provide a byte-code environment. This status quo is ironic considering that users are forced to rely on the contract deployer and off-chain tools for manual verification — which collides with the core value proposition of blockchain.
Enter Gno.land, where all smart contracts are human-readable and available for audits at any point of time, ensuring maximum transparency to enforce the fundamental value of decentralized finance, as the verification can be done fully on-chain. Armed with this unique trait, Gno.land is poised to become the only blockchain that has the potential to become the GitHub for Smart Contracts.
This marks the end of Part 1. Learn how this adds to the inherent value of Gno.land in Part 2.
