Opinion: The encrypted world is reborn on the verge of collapse

Original title: Foresight Ventures: Crypto enters new life amidst collapse and fusion

AC believes that: Crypto is following the old path of monetary policy in the early years, repeating the same mistakes, and re-committing the mistakes made before monetary policy. Dragon slayers may be slowly becoming dragons. Wave after wave of Crypto has iterated into another look, and we can't remember why we started. Crypto culture kills the crypto spirit.

Indeed, as if it were so. Instead of prioritizing core values (decentralization, security, privacy, ownership, innovation), we focus on the short-term thrills of greed (taking orders, hyping, getting bloody because of the frenzy). This situation is rather sad.

These are just a few of the dark sides, but:

More and more public chains love stable coins, stable coins are Ponziized, and the mechanism is too simple and crude (this article was written in April 22, when Terra did not crash). The theoretical TPS is extremely high, but the TPS per second is lower than Ethereum Square.

Most DeFi projects are more and more fond of embracing supervision, which violates the original intention of less intermediaries and no permission.

Most GameFi is not fun at all, and the end of the unsolvable economic system is always a death spiral.

Most of the NFTs are turned into dogs, and the concept of community is useless or basically useless. The more expensive the more art, the airdropped tokens are also the air that feeds Ponzi, and they cannot be landed. They are just for the nesting dolls to continue the story.

Most DAOs are prostitutes, and a slogan can make people recharge with confidence. Everyone has added no less than ten DAOs. There are more DAOs than people, and the efficiency of doing things is extremely low.

Most project tokens are useless. Although it is said that they have governance effects, is the process of staking really for voting? Do a few innocuous votes really allow users to own part of the agreement?

decentralized

Centralization equals low price, and decentralization equals value. The high gas you pay represents the value addition of decentralization. Blockchain has many angles and levels of decentralization: decentralization of computing power, decentralization of governance, decentralization of tokens, decentralization of applications, decentralization of storage...

As a blockchain or Crypto project, the general practice of the project is to establish a centralized attitude first, and then gradually decentralize all aspects in the implementation of the roadmap. But although the future is depicted very well, if there is any project that is completely decentralized, there is really no one, but complete decentralization is not the best state.

No one really cares about decentralization, so if you really want to build a truly decentralized protocol, you must make a pledge of decentralization from the beginning, otherwise you will only continue to compromise in the long process until Lose the right direction.

We will discuss Crypto's vision of decentralization and the necessity of decentralization in certain areas starting from the decentralization of Bitcoin development.

1. Whose Law is Code?

A point of view that is often mentioned in the Web3 era is that code is law. Code refers to the code of network protocols, smart contracts or "recommendation systems". The essence of code is law is actually the social consensus of the new world (the scary kind) , we mainly focus on discussing code and development decentralization, as well as the role of users who do not understand code in the cryptography and computer world.

There are many direct interactions between Web3 aboriginals and "laws". Compared with real laws, Web3 aboriginals also know and be more familiar with Code Law. But just like laws, code modification, governance and promotion are also very difficult. more centralized.

a) Bitcoin's P2SH battle

The first battle of Bitcoin code changes was recorded on Bitcoin Magazine: the P2SH dispute. This is the first network upgrade after Satoshi Nakamoto left.

In the few years when Satoshi Nakamoto appeared, under his leadership, Bitcoin made many protocol changes without extensive discussion. Of course, this is a relatively centralized manifestation, but Satoshi Nakamoto himself It did a very decentralized thing, that is, he disappeared, but it also created the decentralization problem at the development level we discussed.

Andresen, the core contributor of Bitcoin, became the leader appointed by Satoshi Nakamoto. He promoted the OP_EVAL operation code involved in P2SH, and hoped to go online as soon as possible to realize the function. But the introduction of OP_EVAL would cause some problems, and the developers split into several factions , one group thinks to release it quickly, and the other thinks to delay the release, or use other alternatives. So the developers decided to let the miners use their computing power to vote, but the problem is that if the miner client does not upgrade, it will vote for support by default . Developers of various factions have had countless debates afterwards.

This kind of undercurrent has been constantly happening in the development of the network, but as ordinary users, we do not see these conflicts and differences. How should a decentralized digital currency be developed, how to make decisions, how to decide Where is the direction?

b) Arguments keep going on

Behind the scenes, the asymmetry between users and developers also leads to the fact that users usually only listen to the loudest opinions. For example, many people may not know that Bitcoin will activate the BIP-42 soft fork in 2262 (right), I don’t know that Bitcoin was discussing using SNARK to scale in 2013. These are very interesting from the perspective of the story, but when you think about it carefully, as ordinary users or miners, these things seem to be unable to participate in Code Law. The characters in the story are core developers and people who understand technology.

Incidents like P2SH happened again recently. A developer pushed an update without reaching a consensus with other developers, and did not go through the update process of Bitcoin Core (this incident also occurred on the Taproot update, but everyone trusts That developer, so he was not fired). Such a change is considered by some developers as an attack on the Bitcoin network, just like the BCH one.

c) Who exactly controls Bitcoin?

Bitcoin Core is not the Bitcoin network, not the command and control point of the Bitcoin network, but the focus of Bitcoin, nothing more. The Bitcoin network is not controlled by Bitcoin Core, that is, in a de facto sense, development is centralized Issues with the lack of rigorous processes do not directly affect Bitcoin.

But Bitcoin Core may be controlled by these people: internal GitHub employees (stealth tampering), and the keys of several developers (not the developers themselves). Among them, developers have experienced quitting due to public opinion, or being The case of being kicked out by others. When the developer's push is not approved, they may directly force it to fork.

We need to focus more on Bitcoin Core or other development teams to ensure that at least the focus of the Bitcoin network is correct.

d) Law facing Code

There are more than a dozen versions of Bitcoin nodes, all due to various development differences. The currently dominant version is Bitcoin Core, because the code of Core usually means the best performance, the safest, most.

The status of Bitcoin Core is not important, it does not speak for itself. In fact, it does not matter who controls Bitcoin Core, because everything is a consensus in the end. Node operators or users mostly hand over power to developers, which is Their consensus is their choice. In this case, the centralization of Bitcoin Core development may not be too important, because no one forces nodes and users to run Bitcoin Core, Your Node Your Code. Of course, any code changes need After rigorous review, it is guaranteed to be the best solution.

Bitcoin does not actually require "voting", does not require ordinary users to participate in the development process, does not require democratic domination, and does not require pure decentralization of development. Bitcoin is anarchic, but it needs rules, governed by the network Nodes come from top-down governance, definition and execution.

Decentralization is not as effective as centralization at some levels. For example, decentralization at the development level is needed for the team, but for the network, the decentralization of development may not be important...is it?

e) Code is Law is violated

We spent a long time talking about why we can trust the development team of Bitcoin Core if we want to, but although Bitcoin Core is our consensus, are they necessarily right?

The overflow error in 2010 caused a fork, which violated the longest chain principle, and 53 blocks were rolled back (0 blocks were rolled back in the DAO incident).

The problems involved in BIP-50 have resulted in at least one double-spend transaction, slapping PoW.

The problem that BIP-42 fixes is that Bitcoin will have an infinite supply due to overflow. The white paper is Law, Code is not.

These are all because of the fault of the development team, which violates the concept of Code is Law and network decentralization. It is not that the code and Law cannot be changed (just discussing Bitcoin, without any insinuation), but that some development teams can sometimes Let the whole network remedy their mistakes. For Bitcoin Core, we choose to forgive them time and time again.

Is Bitcoin still the imagined decentralized currency?

2. Trustless?

Continuing with the topic of consensus, although Bitcoin Core is the consensus of everyone, does everyone have to believe in the consensus, or obey the opinions of the majority?

There have been many vivid examples recently, and the projects are as follows:

Our APY is very high (this article was written in April 22, when Terra did not collapse), the investment background is very good, the technology is very advanced, it is too revolutionary.

Our mechanism is too safe, but we don't know what problems will arise during implementation.

Our funds are managed by a particularly secure multi-signature wallet.

We are temporarily based on centralized services with better performance.

Our contract code may have accidental or deliberate bugs.

Everyone rushed in when they saw the first few words of the first article, instead of DYOR. This is a common misinterpretation of the trustless feature. If you don’t understand code, technology, or finance, then you need to be cautious. Blockchain is a terrible dark forest... Anyone who abandons judgment and obeys "authority" may lead to disastrous consequences (just talking about blockchain, without any insinuation).

THORChain has done a particularly good job in this regard, but we still need to verify whether this is the case, but it is always better than saying that it is safe but completely relying on several multi-signature applications with unknown risks.

For things in the blockchain or network world, we must regard every day as April Fool's Day, and think about whether this thing is true or false.

3. No permission required

Although most people don’t want to, some users really want and need to run their own nodes. And many blockchain network configurations require direct persuasion. The real ultimate decentralized network is to allow ordinary users to run on their home devices. of.

Remember the section about no need to trust? Only when users run a node or service themselves can they remove many additional assumptions that may be risky on the network (such as the more centralized Sequencer). In any case, let users join Into the network, it is a great addition to the diversity of the network as a whole, as well as to the user's own security and privacy. This is very typical for Solana. Nodes may pass active review when restarting Remove "suspected malicious transactions". In contrast, Ethereum's Danksharding plan is very user-friendly. Mina is also very good, and can even run in a browser.

For client diversity, even Ethereum does not do very well. Of course, taking the browser as an example, it is very difficult to break Chrome’s monopoly and it will take a long time.

Users also need to run their own application front-end. In many cases now, the protocol is decentralized and neutral, but the application front-end is mixed with many other content (Tornado.cash, Uniswap , dYdX , some Bitcoin wallets), It has led to blocking and censorship. Although it may indeed have a positive effect, it has an impact on the decentralization of the application. The application needs to provide a decentralized open source front end, which can be hosted by users or the community, so as to ensure the application's Censorship resistant, neutral, and decentralized. We need Arweave.

For the free and open Web3, any redundant permissions need to be removed, otherwise it is not considered decentralized.

Privacy and Ownership

Web3 = Read + Write + Own. To have true ownership, we must find a balance between privacy and openness.

In real life, ownership represents house ownership, which means property rights, that is, the ability to refuse others to use. In the Web era, from Web1 to Web3, all items, that is, data, are based on sharing and dissemination to increase value. We use NFT to find a balance between publicity and ownership.

In the Web2 era, our data is "sold" to Internet companies and directly creates value for them. In the Web3 era, the data we own creates value for ourselves. We hope that these data (Meme, NFT, large-scale transactions) will be more widely disseminated , and these data can represent our own identity. But these transmissions make our privacy exposure risk greater.

We need cryptography to guarantee our privacy, and at the same time make the value creation process of our ownership more secure. Cryptography is the only way to enter the Web3 world and truly bring privacy.

innovation

The thriving development of blockchain and Web3 is based on innovation, and innovation includes: open source 2.0, composability, decentralization, ownership. Innovation is a necessary condition for success in any new field.

Higher stablecoin APY (halved next week) and carefully "calculated" higher TPS (lower than Ethereum in actual use of the mainnet) are not innovations, but fighting for life and death in meaningless directions.

The essence of innovation is to solve problems that others have not solved, of course, at the same time create new problems that cannot be solved at present.

1. Solve problems that others have not solved

Truly excellent innovation can be described in one sentence, the following are a few typical public chains:

Avalanche:The earliest easy-to-use low-gas EVM chain.

Arweave:A censorship-free persistent storage network.

BSC:Fast and cheap centralized public chain.

Solana:Super throughput, contracts can be written in Rust.

Cosmos:A new blockchain network structure.

Arbitrum:Cheap, while borrowing the security of Ethereum.

In this process, if these problems are solved by others, then innovation may lose its meaning. For example, Polkadot and Near are both working on the roadmap of the previous version of ETH2, and ETH2 has already proposed for the next-generation Rollup universe Brand new solutions (it seems that only the stability and popularity of Bitcoin and Ethereum can support Layer 2). They are all good innovations, but with the passage of time, they are a bit outdated. They are indeed created, but not so new.

2. Create new currently unsolvable problems

Each innovative branch may bring more problems after solving one problem. After the blockchain is created, problems such as expansion, consensus, and security gradually emerge. Only then will there be collapse and integration Process. Computers were created to build better computers. It is difficult to explain why an innovation is useful, but when the innovation creates more problems, we know that at least we will gain more progress later.

Every day-to-day thing that is taken for granted is an innovation optimized by previous generations. At present, Web3 is the best place for innovation. We need to cherish every potential paradigm innovation and ignore meaningless paper innovation.

Whether the goal is really high-quality innovation can actually be condensed into two questions.

Is the first purpose is to improve technology/model/industry? (Barely can be a moderate Ponzi structure, but not a Ponzi scheme.)

Is it a good new Meme? (New Kind of Money, Rely on Math not Validators, The Internet of Blockchain)

Key Research Dimensions

1. Next Generation Infrastructure

Every year is the year of Web3 infrastructure. This is a good thing, and means we realize that the foundations of the industry need to be stronger. Infrastructure will inspire new applications, and applications will inspire new infrastructure. But beware, there is no It is still meaningless to solve the problem and cannot develop the infrastructure into the application.

Infrastructure encompasses countless directions:

New chain:The chain is the network layer of the application and the basis for the operation of the application.

New Bridges:Bridges are a necessary facility to communicate between networks.

Developer Resources:Next Generation Developers, More Researchers.

Facilities for developers:better development tools, more readable data, faster and more meaningful build tools.

Facilities for users:better wallets, more useful applications, especially for Web2 users, which will represent the overall expansion of Crypto.

Public goods:providing value for Web3 and the world at large.

The role of infrastructure is crucial and deserves constant attention.

2. Next-generation innovative technology

We need to look for innovations at the surgical level, not at the level of medicines and plasters. The next generation of innovative technologies that I personally think of is typically zero-knowledge proofs.

The first era of Crypto is Bitcoin, the second era is Ethereum and smart contracts, and the third era will be zero-knowledge proof.

Due to the popularity of zero-knowledge proof technology, Web3 will be more standardized, more efficient and comprehensive development methods after innovation.

Zero-knowledge proof will satisfy all decentralization (mining in the browser), trustless (extra trust assumption is mathematics), innovation (alien technology combined with cryptography), privacy (zero-knowledge is privacy), Meme (Cryptography and mathematics are the largest "Meme" created in human history) and other features that Web3 should have.

In addition, I am also very much looking forward to the integration of mature technologies of Web2 and Web3 to create a new generation of innovative technologies, such as the true integration of machine learning and Web3, and hardware innovations to allow technologies such as zero-knowledge proof to exert greater capabilities.

3. Next Generation Business Model

DAO: More exploration of the DAO model is needed in the future. What can DAO do? What is it suitable for? How should it be done? DAO is the core of Web3 and Crypto space, closely surrounding the community and users. We will continue to study the impact of DAO on the traditional system improvements, and the evolution of DAO itself.

Creator economy: The creator economy is very similar to DAO. It is a concept that everyone is very familiar with, but it has no real value. Art creators have their own communities and economies through NFT, but music, video and other fields create After countless integrations with NFT, creators still seem to have a rejection reaction, unable to truly integrate and innovate. The real realization of the creator economy may require more joint innovations between Web3 social and NFT.

Guild 2.0: The guild has been evolving with the appearance of the game, and the emergence of the Play-to-earn model has given the guild a new life. The role of the guild in the field of Crypto Gaming is becoming more and more important, playing the role of management, operation, and integration . I believe this model will become more mainstream in the future, making the Crypto game industry more mature.

NFT 2.0: We all like PFP, but it may be just a consumer product in the final analysis (for now). What role should NFT be? In fact, everyone has always had some hazy ideas in their hearts, such as Pass, Link, Art, Or Meme?

Summarize

Remember the idea of AC at the beginning? Even so, we have entered a new era, and we are a new generation that can do better. The blockchain may temporarily step into the wasteland, there are not so many "easy" innovations, But the foundation of Crypto has not turned into greed for profit, but may have changed from trustless to partly trust-based. Nevertheless, we are still on the right path.

We should not be a decentralized Maxi, the existence of these core values is not black and white, we just need to take them as the primary considerations at all times. For example, in the development and governance of the project at the beginning, these are not so necessary Decentralization can get some concessions, so that the entire Crypto and Web3 fields can really be built and developed quickly.

Looking optimistically: Web3 is already very good. There are countless young and talented people migrating into Web3, using and building, bringing free mobility. We are on the rapid hype train, and overall this is A very good thing. This is a new land of opportunity where you can build the future, own ownership, integrate digital identities, enable open finance, assemble open source Lego, have a new generation of global work models.

From a technical point of view: Crypto has brought unlimited innovation. Consensus: Nakamoto Consensus, Avalanche Consensus; Cryptography: STARK, PLONK, Halo2; Computing: RISC Zero, Zexe, Cairo; Privacy: Zcash.

Pessimistically: Sometimes, you have to let it break. Although Web3 is so ridiculous now, it will experience collapse and integration, and then enter a new life. In a rapidly changing Web3 world, the biggest risk is not to take any risks, We need to identify real value in the chaos.

Even if you don't care about getting Crypto in the right direction, at least some people care...  

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