Scaling The Blockchain

SF Blockchain Week post #4

Abstract:

Scaling blockchain is the core problem today in the industry. There are many attempts to solve it on layer 0, layer 1, layer 2.

Commentary:

Given the amount of sheer talent going into blockchain scalability, we should see a lot of solid attempts to solve scalability in the next 1–2 years. My take is we’ll start to see the blockchain industry consolidate around a few core concepts, whether it’s sharding or otherwise.

Notes:

Intro

The key is consensus of the network

A network can only go as fast as the slowest person (node) can go

In a public blockchain such as Bitcoin, extra effort must be spent to create trust

Hyperledger Fabric, as a permission blockchain, has better scalability

Significant shortage of tools and human capital

We are a long way off from being able to talk about standards

People have been sold a dream, but the ecosystem is nowhere near enough

If Venezuela switched to bitcoin, then each adult can only go to the store every 36 days

Why is Visa the comparison point? 2,000 tps is nothing

We should surpass it

Scaling for 10 billion people in the future

50,000 if not 100,000 production level of scaling

Critical scaling problem

At the end of the day, can you bring mass adoption

What applications excite you

We need to do scale just to show that we can do scale

There’s perception that blockchain is just slower database

We need at least 100,000 tps to test out applications

There are a lot of trusted read applications that won’t need write

Maintenance and control of your identity

Fundamental human right to control your identity, security of your identity

There doesn’t need to be a killer app

The Internet killer app was messaging and email

Blockchain applications don’t have to be fancy, just sending money, tokens for land records, so important for non-first-world countries

Insurance — look at how tall their buildings are and how little value they provide, it’s inherently a peer to peer transaction

There are 8 dapps that have 300 or more users

Splend 200 million CCTV deal in China

Once you get the users, the killer apps will come in

Layer 0 underneath the consensus protocol bloxroute

Looking at how to make data transmitted on the blockchain really fast

Avalanche — a new way to reach consensus, don’t need mining, gets ride of expenditure of energy

Sharding approach

How language design

Once we solve layer 0 and 1, applications will flow in

It’s important to recognize the market opportunity

Typically, the first instances of a technology is not the winner

Tradeoff of decentralization versus performance

EOS 21 block producers, if I go down to 1, I get great performance

AWS on 1 extreme

I worry about these tradeoffs

You can scale without tradeoffs

Not the best is going to win

Simplicity is going to rule the day

The simpler it is, the easier it is to monetize it

What happens in 5 years

Scalability, we need to collaborate

Blockchain is decentralized, we are all tackling the same problem

What is the application that 1 billion users use that they don’t use today

AI data marketplace or data privacy

Each data point has no value, but it’s about millions of users

Great consolidation, we have 1800 coins, many have zero value

We will see most of them disappear

Avalanche is able to deliver the dream and will eradicate most of the coins

then we need innovation at the network layer

There will be solutions for people who transact frequently

it’s very disruptive period of time, every day there’s something new

We will be able to make payments at 10x the speed of visa, we’ll have a stock market, bond market, prediction market, identity

The big thing will be that the payments thing has taken over

Having a modular architecture