Editor's Note: This article comes fromChain News ChainNewsChain News ChainNews
(ID: chainnewscom), author: Joseph Lubin, translation & proofreading: haiki, wuwei, IAN LIU, A Jian, published by Odaily with authorization.
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economic era
Behind every change in the economic era is the explosion of technological innovation. These technological innovations have improved efficiency, promoted human cooperation, and brought us to a new era.
In the era of the information revolution, we have computing machines that can process information faster, plan and execute more complex actions, affect broader scenarios, and create more value in less time.
In 1984, John Gage, Chief Scientist of Sun Microsystems (Sun Microsystems), pioneered the slogan "The Internet is a computer." Years later, many web1 and web2 companies promoted the Internet to billions of people around the world, greatly Unleashing our social nature creates the social networking/global community revolution - allowing us to organize collective action across the globe in real-time.
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objective trust
Over thousands of years, humans have created countless systems and technologies that have greatly improved the quality of life. But these advances are all built on a somewhat fragile foundation: the foundational trust layer of society.
To create even the most basic common action, people need to trust each other. But historically, all the foundational trust layers of our society have been built on top of subjective trust:
Trust a single individual, or;
Personal social networks, or;
A commercial platform or institution, or; a large central authority such as a government.
This subjective trust works well in many situations, but problems arise when there are misunderstandings, information asymmetries, or power unequals.The reliance on centralized trust has allowed some middlemen to extract too much value from the transaction flow.
Most of the time, they stand between content producers, service providers and customers, inject the necessary trust into the relationship, and then collect rent from it. Until recently, this was the only way we knew of to cooperate on a large scale on Earth.
Now, we need new and better trust infrastructure on which to base all the technological, commercial and political tools that drive the world.
This trust revolution will change everything. Now we can re-architect the system and society, let the agreement be executed with assurance, and build truth, fairness and justice into the social rule system, so that everything we do will be reset on a more sound foundation of trust.
This emerging revolution in global trust infrastructure—most notably enabled by distributed blockchains and associated protocols—will empower everything we do in an age of trust automation. This phase of the economic revolution will not only allow us to create orders of magnitude more value in less time, it will very likely change the very definition of value.
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The trust feature of the blockchain system comes from its thoroughness of decentralization.
Some types of blockchain networks are resistant to manipulation — they cannot be tricked into breaking up, even if nearly half of the nodes in the network are malicious.
With thousands of nodes in networks like Bitcoin and Ethereum, we can be confident that these systems are more resistant to manipulation than almost any system in human history. If everyone on the planet happens to have a full node device connected to the network, we can achieve maximum decentralization of the blockchain network.
A well-designed proof-of-stake (PoS) system can remove these asymmetries, allowing more people to own or control hardware to participate in the network. The barriers to joining the network will be low enough that almost anyone can verify transactions on Ethereum's network and help secure the network.
Casper's Proof of Stake (PoS) will bring breakthroughs in scalability while making the network more decentralized and therefore more secure. The Ethereum Beacon Chain testnet using Casper has launched, and the eight teams that are building implementations of the protocol should be in sync on the shared testnet within a few months.
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Clearing, Platform, Walled Garden
Settlement is the act of finalizing a sale or transaction. When the settlement is complete, all parties involved in the transaction will receive what they bought and sell and will no longer be owed. A settlement system, the settlement platform or the settlement layer is the place where the business, sale or transaction is settled.
In stock or equity transactions, settlement between clients of a securities firm will occur at the level of the securities firm, while other settlements may need to occur at the base layer. This base layer is called the central depository. In the country we are in now, it is the Korea Securities Depository.
But there is in fact no cohesive global financial system.
Each garden is separated by fences: securities firms serve within their jurisdiction; each country has a centralized depository; banks process transactions across the country, and when they need to go through the fence to complete a transaction, they need to use Correspondent Bank Relationship. The same kind of settlement often happens on many different kinds of platforms outside of the financial industry. EBay, PayPal, MasterCard, and Amazon can be thought of as settlement platforms for certain types of transactions. Google Play and the App Store can also be considered billing platforms. Others are travel sites and health maintenance organizations. None of these institutions put consumers first, most of them torture consumers and squeeze the most value out of us. Each prioritizes protecting its own pricing power—limiting end-user freedom, choice, and quality of service.
The traditional economy is to build the deepest and widest moat to protect competitive enterprises.
Service providers, such as software and game developers, doctors, musicians, teachers and Uber drivers, in various industries suffer from being encroached upon by platforms;
Over the past few decades, software developers have had to deal with different types of platforms: AOL, Compuserve, Windows, Mac, various packaging issues and browser compatibility issues in the open web (such as CompUSA and Egghead);
Now we still have to face these isolated Web ecosystems: iOS, various Android systems, Facebook, App Store and Google Play;
Service providers such as blockchain companies will be subject to financial industry platforms, because around the world, if banks believe that the next generation of database technology being developed by software development companies will have unacceptable impact on the degree of decentralization of the banking architecture. impact, it is difficult for these software development companies to establish bank relationships. But decentralized finance is on the rise, and soon, blockchain companies will be less dependent on traditional financial infrastructure.
platform risk
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platform risk
So everything we do is subject to platform risk, be it a bank, a gaming console, a social network, an app store, a mobile phone, or even a country.
Through the distributed protocol, for the first time in human history, autonomous root identity information management (through a system similar to uPort); the control of private information (through a personal data safe similar to 3box); self-employment (through Platforms like Gitcoin or Bounties.Network), these implementations are based on a (no permission required) trusted platform like Ethereum.
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Rich Protocol Layer and Economic Opportunity
In 2016, Joel Monegro of Union Square Ventures published a blog post called "Rich Protocol" (also translated as "Fat Protocol"). The article points out that, unlike the Internet and web protocol layers without value attributes, we will see the evolution of protocol layers with their own value attributes from the blockchain ecology (similar to Ethereum or other web3.0 protocols, including: Centralized storage, bandwidth, complex computing, identity recognition, location proof, etc.), each protocol can become an open platform based on the tokenization protocol.
I prefer to call them layered rich protocols, or layered collaboration protocols, which are more appropriate.
Ethereum is an open platform based on rich protocols. It has a project on it called Ujo Music, through which over 1000 artists (the number is growing at 10% per month) reach their fans directly and earn revenue bypassing intermediaries (usually, record labels and streaming platforms 70% of these earnings will be withheld as an intermediary).
Later, the Ujo project will separate and tokenize the creator's portal from the underlying metadata and digital rights management (DRM) platform, making it an underlying platform for the music-related industry facing the world (a no-access, based on open platform for shared protocols). The underlying platform can be seen as a collaborative protocol based on Ethereum. We can also build other types of collaborative agreements, including: content collection, ticketing, equipment rental, venue rental, marketing, legal services, and more. These industrial collaboration layers make full use of Ethereum's trusted layer (first layer), state channel layer (second layer, which is what Ujo is now using), and other technologies (such as the Plasma network).
The difference between the Ujo platform (including platforms based on it or related to it) and companies like Sony BMG, Warner, Universal, BMI, ASCAP, Virgin Records, Ticketmaster is that anyone can sell music and build a business on Ujo . The platform is open to everyone and supports global settlement. These music industry settlement layers are open, can be accessed without permission, and guarantee fairness to the greatest extent (in the distributed autonomous platform where it is located).
Forking is a good thing, it allows some community members to open up new directions when they are dissatisfied with the status quo. This is also an evolutionary mechanism that facilitates the exploration of solutions and provides more options. Most importantly, the threat of forks keeps us lean and open to advice.
Either continuous upgrades or passive forks, the cost of switching between platforms is very low, and artists switching their properties between different platforms are as easy as ticking the selection box. In the original dream of the internet, where censorship was viewed as a hazard and kept at arm's length, today (censorship-free autonomy) is a dream come true. Of course, we still need to continue to innovate and remain vigilant.
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In the early web days of the Internet, network protocols were indeed monetized. Cisco has done a great job at the horizontal (generic) level of the protocol. Later, other protocols (HTTP, SMTP, XMPP) were monetized as part of verticalized products (AOL, MSFT, Google, Facebook, Apple, Amazon, etc.). Bottom-up vertical aggregation is very suitable for enterprises, because in this way, enterprises can maximize their interests in a certain ecology as an intermediary, or can more easily expand in related market segments. Vertical aggregation is also a key factor leading to the closure of the platform and the formation of a walled garden moat. Think of what Google, Amazon/AWS, Microsoft, Apple and WeChat are doing.
In the blockchain era, the monetization of network protocols will advance horizontally. For different industries and market segments, open platforms based on layered protocols can better promote competition, because these granular platform products lower the barriers to entry for each layer. After sufficient competition, successful experience will be difficult to directly replicate between different protocol layers, which is in line with the original intention of competition law and anti-monopoly law. This economic structure will result in smaller and more professional business organizations and fairer monetization protocols.
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Unlike commodity value chains such as energy, grains, and hardware, the global IT infrastructure is still in the low-grain stage of a free market economy. Many businesses in IT still retain large sales forces and two-sided market operations. Products are still sold the traditional way, either in boxes, through app stores, or as services, locking themselves in walled gardens. While the products of Apple, MSFT, Amazon, and Google are amazing and move the world fast, we can still do better. By building an open platform, we can provide more choice, less lock-in, and reduce the pricing power of large corporate organizations.
Resource allocation methods such as computing, storage, and bandwidth in the cloud will gradually disappear. For example, if we let the watch complete a certain task, it will obtain resources from clothing, furniture, notebooks, and the cloud. Through a blockchain-based legal agreement platform (similar to OpenLaw), we can negotiate the allocation of ubiquitous computing, storage, and bandwidth resources. At the same time, tokens can be used for real-time payment, clearing, and settlement.
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The next generation of financial industry infrastructure will include: centralized or decentralized spot token trading markets (using utility tokens and security tokens); atomic swap protocols; stable coins; parameterized insurance products and trading markets; lending platform; trade finance platform; insurance platform; open venture capital platform and decentralized governance mechanism. Futures, options, and other derivatives allow resource providers to hedge price risk, and resource consumers to lock in prices for a period of time as needed. These infrastructures already exist and will mature quickly.
The construction of new financial infrastructure will promote the granularization and commoditization of global IT infrastructure, and the same is true for other industries. We will see a freer free market, including: more cooperative competition; more efficient; lower barriers to entry; more fair. The FinTech/DeFi revolution has allowed all of the above to explode, and most of these developments have occurred on Ethereum.
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Closed Platform = Corruption & Inefficiency
Closed platforms breed corruption and inefficiency.
Over the years, we've seen Barclays and Deutsche Bank, whose gold and silver price manipulation scandals broke out. Even LIBOR, the benchmark interest rate that anchors world currency prices, is often manipulated by some banking cabals. UBS, Barclays and other banks have been paying fines for their frequent corruption in the trading market for decades.
If we can really tokenize the entire world, the financial firms and traders who control the resources will spare no effort to manipulate the market for economic and political interests. We do not want the highly liquid token market to be equally vulnerable in the next generation economy, therefore, we can only choose the most decentralized platform as the basic settlement layer of the global economy.
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Fabric
On the blockchain ecosystem: what are the options?
Assuming we agree that freedom, choice, maximum credibility, etc. are good attributes, then when we want to use a global clearing and settlement network with these attributes to restructure enterprises and how they collaborate, what are our reliable choose?
Perhaps IBM's Fabric?
No, it cannot escape the relatively small network of private and permissioned systems;
R3 Corda
Fabric can issue tokens, but only for narrow scenarios;
Fabric technology promotes a closed platform (limited access).
R3 Corda is a blockchain software service primarily for use by banks. It pays more attention to the trusted issue of point-to-point transmission rather than trusted data sharing;
EOS
Corda can issue tokens, but only for narrow scenarios;
Corda technology promotes a closed platform (limited access).
The debate around EOS has been going on for a long time, because EOS is controlled by 21 super nodes and is not completely decentralized. As long as these nodes are willing, they can collude and collude; the government and other plutocrats can also bribe them or force them to act against their will. This will damage the interests and security of EOS users;
Polkadot
If EOS block producers are evil, they will be voted out-this is the main method of EOS to ensure decentralization. But it’s also fraught with controversy, because unfortunately, there’s no good way to test whether these supernodes colluded, colluded, bribed, or forced to do something inappropriate;
I can imagine EOS being used in some games; but I can't imagine that the tokens of those games will be of high value, because using the EOS platform will face a very high risk of value theft.
Polkadot was built by the Ethereum Parity client development team - Parity is a very strong team;
Polkadot achieves scalability through a main heartbeat chain (or "relay chain"); there are many branch chains relying on it. Polkadot plans to release their relay chain mechanism in Q3 2019;
The Polkadot project sees Ethereum as one of the potential "virtual forkchains" that can be bridged;
Cosmos
Any branch chain ("parallel chain") that wants to connect to the Polkadot intermediate chain must be voted by dot (the token of the Polkadot system) holders. When a branch chain no longer receives the support of the majority of dot holders due to non-compliance, these branch chains will be terminated or removed from the system. In fact, Polkadot is a permissioned chain, and the whitelist and blacklist of the branch chain network are the core guiding principles for managing the Polkadot system;
Assuming that there is a branch chain that allows anyone to upload dApps without authorization, eventually Dot holders may raise objections to these operations; the system defaults that dot holders will be responsible for the entire system, so the branch chain will not dare to provide services freely. Polkadot will be a highly controlled permissioned chain platform.
Cosmos also has strong technical team support;
Cosmos will not actually release the underlying trust layer services, but will focus more on interoperability between independent platforms. But in the next few years, in addition to allowing tokens to be transferred across networks, Cosmos does not seem to propose other interoperability features; the Cosmos team believes that the most important use case for interoperability is the transfer of tokens across networks;
Dfinity
I hope that Cosmos will perform better as a second-layer solution, and connect to the basic trust layer when necessary;
We also expect Cosmos to interact with Ethereum via token transfer bridges.
Dfinity has a strong team;
Currently Dfinity is a closed network controlled by a small group of investors and token holders (the controller said that the project will be open-sourced at some point, but no one can guarantee...), but as far as I understand, Dfinity does not want to do global basic trust and settlement layer services, they are more like decentralized AWS. Whenever Dfinity launches, they should do better than expected;
Dfinity does not seem to be able to become a global base trust layer, similar to Cosmos, because their initial design choices put the security and consistency of the system before availability and applicability, thus creating this situation. As long as 34% of Dfinity's nodes are blocked by a firewall incorrectly causing block delays (and many possible node errors), the entire Dfinity will stop, and every system built on it will stop. This is unacceptable for many different levels of applications.
That's right, that's right.
Ethereum 1.0
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Ethereum 1.0
No matter how you look at it, Ethereum is the largest blockchain ecosystem. In terms of the number of core protocol engineers, Ethereum is ahead of Bitcoin, and the two far exceed the sum of other blockchain systems; in terms of application layer developers, Gartner analysis pointed out that the developer ratio of the Ethereum ecosystem The second-ranked IBM Fabric has a full 40 times more.
Ethereum is a system that truly has no access restrictions, and there is no so-called whitelist or blacklist. Anyone can join Ethereum to verify transactions and upload applications. It is a global, zero-censorship base trust layer with no central node control or failure.
Again: no matter how you look at it, Ethereum is the largest blockchain ecosystem. In order to build it into a global basic clearing and settlement service layer, we still have a few things to work on:
Ease of use (user interaction and user experience);
privacy and confidentiality;
In order to attract more users, many projects are working on providing more user-friendly, rather than forcing users to remember 12 security words in case they lose their ID and tokens. Only after the user is familiar with the whole system, the project will give the user more responsibility. The emergence of the blockchain has introduced a new mode of operation, so we also need user education—just as Apple guides users to use different gestures to pinch, tap, and press the iPhone in a gradual manner. MetaMask, Burner Wallet and 3box, etc. are all pursuing simple and efficient user experience design to gain greater market acceptance.
We've also made great strides in privacy and confidentiality. Private networks can access Ethereum through Plasma technology, or implement confidential transactions on Ethereum through state channels and Aztec protocols.
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Most of the Web 3.0 standards were proposed on Ethereum. The constant evolution of the ERC token standard on Ethereum is another proof - proof that Ethereum is in full swing. Among them, the well-known ERC20 and ERC721 protocols have promoted the wave of tokens in recent years, and have also given rise to the momentum of using non-homogeneous tokens in the game field; ERC223 and ERC777 protocols are upgrades to the ERC20 protocol;
The ERC998 protocol expands the practicability of the ERC777 protocol; the ERC1337 protocol regulates blockchain-based subscription and payment behavior; the ERC1400 protocol clarifies token security; the ERC1155 protocol proposes multiple token functions; the above are just a small part.
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Ethereum 2.0, Polkadot, and Dfinity have similar architectures and functions, and they were launched at a similar time. Of course, I expect the Serenity phase (Ethereum 2.0) to be fully functional, and to be recognized by most people before these "next-generation architectures" are launched. It takes a lot of work to build a platform, and it takes a lot of effort to launch a platform. The Ethereum ecosystem has diversity, expertise, and motivation to achieve this goal quickly and well. Building a blockchain ecosystem requires a lot of work and network effects; so by then, Ethereum will be orders of magnitude larger than the other two, and already scale well with second-layer solutions.
Ethereum is rapidly innovating on the scalability of the first layer (basic trusted layer) and second layer (application layer) services. The first layer of Ethereum is currently the only choice for global clearing and settlement services, because it prioritizes usability and applicability over consistency, can reach consensus relatively quickly, and strictly guarantees maximum decentralization.
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Quantification of degree of decentralization
How to evaluate the degree of decentralization and then compare the competitiveness between blockchains has always been a focus topic.
A lot of discussions always focus on the scalability and tps of the blockchain, but this is not the best way to measure the throughput of the blockchain, because they do not consider the degree of decentralization of the blockchain project. We use DTPS (or, decentralized transactions per second) as an alternative to these measures—to objectively compare blockchain performance and potential by quantifying the degree of decentralization and throughput.
Of course, the current problem with the DTPS indicator is whether the evaluation of the degree of decentralization and throughput is objective enough, especially when measuring expansion solutions that do not occur on the main chain. Regarding this problem, we are trying a "dynamic measurement method" and seeing whether the given DTPS is objective.
We'll soon be launching a website and iterating on the project as a decentralized community, while trying to come up with a way for us to track each blockchain ecosystem through DTPS.
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By establishing a basic clearing and settlement layer service, many blockchain networks and related systems can "anchor" their transactions on it. With each additional sidechain or relationship chain added to the root chain, the DTPS of the entire ecosystem will increase. A rising tide lifts all boats.
epilogue
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epilogue
The open source and sharing of platforms is a natural trend and is closely related to our daily life. The whole land is like a transport layer, on which we can walk freely, breathe the air freely, gather to play in parks, or play and fish in oceans, lakes, and streams. We should also strive to build more digital infrastructure into such an open and shared pure land, bringing common benefits to all people; as long as we invest more efforts in the basic protocol layer so that everyone can share resources at a low cost, then The overall social well-being will be significantly increased.
