Crypto Weekend Review 8/12

Wilson Withiam

Published in

Circle Research

4 min readAug 12, 2019

Curated reads, listens, views by Wilson Withiam and Ria Bhutoria.

Weekly Spotlight: Double Feature! 🔦🔦

It’s the settlement assurances, stupid by Nic Carter

In his latest piece, Nic Carter evaluates what he finds to be most interesting about Bitcoin (and perhaps blockchain networks in general): it’s capacity to transfer value digitally while granting “recipients confidence that an inbound transaction will not be reversed” (i.e. settlement assurances). Many competing proof-of-work blockchains attempt to replicate Bitcoin, but none have reached the level of Bitcoin’s security threshold (or cost of attack). Further, network design changes made by these alternate blockchains, such as accelerating the block generation time, can be misleading, as settlement guarantees across block confirmations are not equal. Therefore, Nic proposes a framework for evaluating settlement assurances on different PoW blockchains to provide a more accurate method for comparison.

PoW is a rabbit hole in itself, and Nic’s article gives a fantastic, high-level overview on how to understand its value-adds and potential challenges, both from a quantitative and qualitative perspective. Nic also provides links to other Bitcoin/PoW related works for those whose intellectual curiosity isn’t satisfied with his 24 minute read (per Medium).

The State Growth Problem Facing Blockchains by Richard Chen (1confirmation)

Richard Chen delivers an important article detailing an underrepresented dilemma facing layer-1 stateful blockchains: the compounding storage requirements passed on to full nodes, otherwise known as state growth. Full nodes on smart contract blockchains like Ethereum provide disk space to networks users, storing state data such as transactions, while assuming the costs, and these storage costs are both infinite and permanent in Ethereum’s current design. As a result, the storage required to run a full node has been increasing exponentially, leading to fewer full nodes in operation. And if left unchecked, node architecture could be centralized to a few “economically incentivized participants such as Infura and Etherscan.”

However, Richard notes there are a number of efforts exploring potential solutions to the state growth issue, including economic-based solutions like state rent and technical solutions such as state pruning or stateless blockchains. He also takes a deeper look into the potential challenges associated with each proposal as well as the some of the teams building these solutions. Given the rate at which related technological and research developments are evolving, it remains possible (if not probable) a viable solution will be implemented. But Ethereum’s level of decentralization and long term success is likely dependent one of these efforts finding success.

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