Blockchain
Every few years the internet experience is upgraded by some new standard and somehow better performance. This in turn creates greater capacity for new applications and wider use of the technology.
Some fundamental-level improvements require network hardware to be replaced to take advantage of new features. For example, IPv6 was introduced way back in 1998 and, among other improvements, offers better routing than IPv4 without packet fragmentation. But before it was adopted by the masses, manufacturers had to roll out new compatible devices such as routers and Wi-Fi chips.
It may take years for basic tier technology to be widely adopted as people gradually upgrade from older hardware. Mass adoption – especially for technology that works at the “basic level” – can be an agonizingly slow undertaking.
Mustafa Al-Bassam, co-founder of Celestia Labs, likens this process to what he sees as the inefficient advancement of blockchain technology on the Empire podcast (Spotify/Apple).
Al-Bassam talks about implementing HTTPS – a more secure version of HTTP that uses encryption to send data between a server and a browser – to illustrate his point.
“Imagine if to implement HTTPs we would have to modify the whole network layer of the Internet and modify the actual routers and the actual Wi-Fi chips and all that stuff.”
“It would take ages.”
“And that’s exactly what we did with IPv6 versus IPv4,” he explains. “Basically it takes two decades to get mass adoption because you have to tweak every Wi-Fi chip, every hardware, every router.”
Al-Bassam says the analogy can be used to understand the current predominant mindset in blockchain development.
When does it end?
“Imagine having to create an entirely new layer-1 to experiment with a new execution environment.”
“It would be insane,” he says.
“That’s basically how we’ve worked for the past 10 years.”
Blockchain innovation is stuck in a “monolithic layer-1 loop,” says Al-Bassam. Whenever incremental improvements are made to the execution environment, he says, “we’re launching a new layer-1.”
Ethereum started the cycle of layer-1 innovation in 2015, followed by protocols such as EOS and later Cardano. In more recent cycles, Solana and Avalanche joined the fray, and “now we have Sui and Aptos,” he says.
“When does it end?” he asks. “It’s not sustainable.”
A rollup-centric step-by-step plan
Al-Bassam is skeptical of the constant stream of new Tier 1s that only offer incremental improvements and “just copy all applications from the previous Tier 1s.”
Ethereum development is focused on a “rollup-centric roadmap” to achieve scaling, says Al-Bassam. “It is not tenable to assume that one synchronous blockchain will serve the entire web.”
“That is ridiculous.”
It’s like assuming, he says, that “one server will serve the entire Internet.”
Al-Bassam’s solution to the monolithic layer-1 loop is to create rollups that don’t require layer-1 re-jig, but build networks on top. Rollups can be developed and repeated without tedious base layer rebuilding.
Preston Evans, chief scientist at Sovereign Labs, explains his take on the current phase of monolithic blockchain development. “Right now you’re sharing this single ‘computer’ with the whole world.”
“And so the only thing you can do on that computer is the very highest thing you can think of.”
“If there was only one mainframe in the world, we’d probably use that mainframe to run Nasdaq or something,” he says. “We would use it for something incredibly valuable.”
No one wants to live in a world where computers are used only for Nasdaq, says Evans. “So what we’re building out is the infrastructure where everyone can suddenly have a ‘computer’ at home.”
It’s too early to say what people will do with these new decentralized computers, Evans says. “People didn’t necessarily predict Friendster, MySpace and Facebook and then TikTok and Instagram.”
“When we look back ten years from now, we will find it a bit ridiculous that activity was so tied to prices. That’s just an artifact of everything on the chain being financial right now, because chains can’t support anything that’s non-financial.”
“The reason we need chains isn’t just to scale finances,” he says. “It’s to enable interesting use cases that just aren’t possible with the limitations of blockchains today.”