Argent + zkSync: A Peer-to-Peer Electronic Cash System dream comes to life
In 2009, Satoshi Nakamoto published the seminal “Bitcoin: A Peer-to-Peer Electronic Cash System” paper. Bitcoin has been wildly successful as a store-of-value, but it turned out to be a poor peer-to-peer electronic cash system as originally described. So, why did Bitcoin fail? There are a few key reasons:
- Dealing with private keys, seed words, hardware wallets are very messy and inaccessible.
- You can only send one token* — BTC — which is very volatile.
- There’s very limited throughput — only 7 transactions can be processed per second.
- It’s very expensive — it costs $5 to make a transaction.
- It takes 10 minutes to an hour to confirm.
There have been solutions to work around this — like Lightning Network or sidechains, but they have their own set of disadvantages. I won’t go into details, but for example, you can only send payments to those who have opened a channel, and sidechains / alt L1s are highly centralized and insecure. The only two sufficiently secure & decentralized networks are Bitcoin and Ethereum. While Ethereum can process up to 55 TPS for ETH transfers, confirm in less than a minute, and solves 2) this is still extremely limited.
The latest beta release of Argent with zkSync integration is at the crossroad of the two things that I’m most excited about — social recovery smart contract wallets and zk rollups. It fixes all of the above and brings the Peer-to-Peer Electronic Cash System to life — finally!
- Argent uses a social recovery system — you can read all about it here. Social recovery systems are not only far superior to seed words and hardware wallets for most people, but it’s also superior to Web2. If you forget your password and can’t recover your account, you have to call PayPal or Facebook, who can take weeks to restore your account after many a headache. With social recovery, you only need your close friends and family to verify it’s you and restore your account completely autonomously. The magic of smart contracts! Of course, we want to see the social recovery ecosystem develop.
- You can send any ERC20 token of your choice that’s listed on zkSync. If it’s not listed, it can be deployed permissionlessly. You can use stable assets like DAI or USDC if that’s what you prefer. Or you can send ETH or WBTC if you’re more into volatile assets. Some will claim that BTC will eventually become stable — but it doesn’t matter — Argent + zkSync gives you more choice either way.
- zkSync can process over 2,000 TPS, which is on par with Visa! But it doesn’t end there, once data shards release on Ethereum it would actually be capable 100,000 TPS and expanding over the years.
- zkSync transactions cost in the ~$0.20 range currently, but will continue to decrease with more activity. With zkPorter coming in 2022, this can drop down to as low as $0.02, and with data sharding and prover costs continuing to reduce we’ll have sub-cent transaction fees in a couple of years.
- zkSync transactions confirm nearly instantly! No more waiting around.
Argent + zkSync is a superior electronic cash system than web2 alternatives like PayPal. With complete self-custody, superior credential management and account recovery, high security backed by Ethereum, higher throughputs, lower fees, greater choice of assets etc. etc. — fintech is ripe for massive disruption. Argent has fiat onramps to make it easy to get started. Finally, I’ll note that this is cutting-edge tech and has a long way to mature — but we’ll get there.
Oh — I won’t even mention all the cool NFT, DeFi, gaming, social stuff that you can do in addition to payments!
Argent plans to integrate with more rollups in the future. You can read about their plans here: Recap: Our Layer 2 plans (argent.xyz). In the future, I expect smart wallets like Argent to be the interface of choice for most users. The concept of chains and rollups and bridges will all be moved under-the-hood. The users will simply use wallets like Argent and their favourite applications through it.