Security layers: or qualifying security & decentralization

A culture of users verifying

The single most important thing (in my opinion, just like everything else here) is a culture of end users, developers, wallets, exchanges, infrastructure providers, and other ecosystem participants running non-validating full nodes.

  • First of all, stay within limits — prioritize the ease of running nodes over scalability.
  • Efficient clients with better ways to sync and store data.
  • Cryptographic solutions like statelessness and state expiry.

A wide token distribution

Particularly for proof-of-stake networks, a wide token distribution is absolutely critical. Currently, I don’t think any network’s token distribution is sufficiently decentralized, though once again bitcoin and ether are leagues ahead, with litecoin a very distant third. Some of the newer projects like Solana or Avalanche are laughably centralized — I’d rather trust a reputable bank. Now, some may argue that they’ll eventually be decentralized, but there’s no actual method to decentralize. Indeed, their delegated-style consensus mechanisms with staking rewards actively disincentivize it. The larger the number and diversity of participants around the world, the more resilient the network will be.

Economic security

While this can be quantified, as Justin Drake discusses in his must-watch Bankless Trilogy, it’s trickier than it first appears. For now, we could define this as the cost to attack a network. For proof-of-work networks, it’s all about how much it’ll cost you to acquire 51% hashpower. This could be through renting hashpower, acquiring ASICs etc. This could also be estimated from the going rates for renting hashpower and multiplying it by hashrate required for 51%. This is a hypothetical extrapolation, but according to crypto51.app, currently Ethereum is #1, Bitcoin #2, and everything else a country mile behind. Of course, you can’t actually do this, and the real costs are hard to figure out. For proof-of-stake, this becomes complicated very quickly due to the many differences and nuances with consensus mechanisms. Speaking of…

Secure consensus mechanisms

Unpopular opinion, but I believe the consensus mechanism is the least important aspect to a security chain. It’s much more important to accomplish a culture of users verifying and a wide token distribution first. The nuances of consensus mechanisms become irrelevant if those criteria are not met.

Lindy and network effects, decentralized development, ecosystem support

A battle-tested, resilient network with a token with strong monetary premium and thousands of developers building are desirable characteristics for a security chain. Once again, Bitcoin reigns, but Ethereum is catching up. In one aspect — developer adoption, multi-client development — Ethereum is far ahead of any other network. A multi-client network is significantly more resilient than a single-client network with one team building the only client. Of course, it could be argued that instead of distributing human resources to multiple clients it may be better to build one perfect client.

ZKP friendly

If you have considered everything I have discussed here, you’d come away with the conclusion that there are only two competitive security chains in the blockchain industry — Bitcoin & Ethereum. Unfortunately, this is where Bitcoin is totally useless as it doesn’t have the functionality to verify zero-knowledge proofs. No one’s even talking about it, whereas for me it’s the no-brainer, most impactful upgrade Bitcoin can make, far more so than Taproot.

Bonus benefit: massive data availability layer

An untold bonanza offered by a competent security layer is the possibility of also featuring a massive data availability layer. Ethereum, for example, is starting off with 64 data shards, scaling up to 1,024 data shards over the years, and with Moore’s Law and Nielsen’s Law possibly scaling up to several GBs/s of data availability. This sort of mind-bending data availability will never be possible with a centralized monolithic blockchain, effectively inverting the blockchain trilemma. I speculate that rollups can scale up to 15 million TPS by the end of the decade, and even more with alternate data availability solutions.

Concluding

Regrettably, there’s a deafening lack of competition in the security layer space. It’s basically just Ethereum right now, while monolithic blockchains are still focused on execution and scalability. I’d love to see some new projects emerge to tackle the security layer challenge. I have no idea how it can be done, though! The best option seems to be Bitcoin adding functionality to verify ZKPs, but a dark horse may be a global consortium with tech giants releasing a security layer whilst distributing tokens to billions of people. Just thinking out loud. There could also be a revolutionary new security mechanism that obsoletes proof-of-stake. But all of these seem far-fetched.

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Polynya

Polynya

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