Paths forward for monolithic chains

I have been saving this for last. My goal was to demonstrate that monolithic blockchains are a technological dead end. Over 30 posts and hundreds of comments (particularly on Reddit) over the last year or so, I think I have written pretty much everything I wanted to say on the matter, and if you’re still not convinced, nothing else I say ever will. So, the last question is — what can monolithic blockchains do to remain relevant in the brave new era of specialization? Specialize, of course. It’s like asking what would farmers crafting their own homebrew sickles and using horseshit do after the industrial revolution? Use tractors and fertilizers built by others who specialize in those instead, of course. Lastly, I’m taking a long-term view. Here are their options:

Remain monolithic, accept technological obsolescence, but focus on marketing, memes & build network effects and niches before modular chains dominate

[A word of advice to projects that opt for this: please don’t be obnoxious lying and FUDing through your teeth. Accept that there are other, newer technologies out there, but you’ll make it work regardless.]

Expand into a validium

The cost per transaction will be negligible — particularly once we have GPU/ASIC provers. For a busy validium with many transactions amortized over one ZKP, the cost could be fractions of a cent long term (currently ~$0.01). It’s just a huge increase in security for very little cost — absolute no-brainer.

Once this transition is made, the new validium can actually start cutting back on their consensus mechanism — due to the new security inherited — and push scalability higher, be more innovative with execution layer features etc. It’s not just about security, of course, you also benefit from the network effects and ecosystem support. A great case is Immutable X — despite off-chain DA, that it’s partially secured by Ethereum is evidently a huge plus point, and why it’s the runaway winner in the NFT space.

Become a volition or rollup

Become a security & data availability layer

Of course, Ethereum is taking the former approach as a security & data availability layer. For other sharded networks like Polkadot and NEAR, this is actually a fairly straightforward pivot to make. Replace execution shards (parachains) with data shards; leverage rollups/volitions as execution layers instead of execution shards (parachains). Potentially, you can continue having execution on shards, just reorient to focus on data & rollups. It’s harder for single-ledger chains or non-shared-security multi-chain networks — they’ll need to build new data availability layers to remain competitive.

Needless to say, Bitcoin & Ethereum have a gargantuan advantage in “security” — which covers credibly neutrality, monetary premium, social consensus etc. But these less secure chains can be strong competitors in the data availability space, and build their own niches as a security + DA chain.

Become a security-only layer

Build a data availability layer




Rants and musings on blockchain tech. All content here in the public domain, please feel free to share/adapt/republish.

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Rants and musings on blockchain tech. All content here in the public domain, please feel free to share/adapt/republish.