Cryptocurrency

Fred Wilson (Union Square Ventures ) thinks the Internet “Rhymes” with Blockchain

Fred Wilson mentioned a quote that “History doesn’t repeat itself but it often rhymes” which is a great quote from Mark Twain. It makes total sense because “in the early 90s, most of the money was made in infrastructure, routers, big bandwidth, CDN. Netscape was really infrastructure and there were a few apps like ebay, amazon. Google only came out in the late 90s. In the last 15 years, Apps/Services were more popular like Airbnb, Spotify, Uber were able to be leverage the strong infrastructure was put in place. After the crash and in the 2000s it was really cheap to launch a company because alot of the infrastructure was put into place.”

When thinking of history rhyming from what happened from the internet, blockchain technologies still need to build up decrentralized compute, storage, identity technologies. Investing in those and building those frameworks will be much more critical than the Dapps that are being built on top of the infrastructure layers & protocols.

We are already starting to see this rhyme with ethereum focusing on their roadmap for scaling with plasma, & sharding. According to this article, below is a quoted summary of the two improvements.

“Layer 1 Sharding

“Currently, every node running on the Ethereum network needs to process every transaction going through it. While this validation provides for a high amount of security, it also suggests that the blockchain itself can be only as fast as its individual nodes — disregarding the sum of their parts.

Sharding, on the other hand, describes a condition of the blockchain where the network is split into smaller partitions called shards, which contain independent transaction history. In this scenario, individual nodes would only have to process transactions for certain shards, hence allowing the overall transactional throughput — in total — to be greater as a single node wouldn’t have to do all the work.”

Layer 2: Plasma

Plasma, on the other hand, is designated to be a layer two scalability solution — which doesn’t improve the blockchain itself. Instead, it takes an existing blockchain, creates a special construction which is connected to it, and thus provides a much higher throughput.

Plasma, in its essence, is referred to as a solution for conducting off-chain transactions. Still, it relies on the underlying blockchain of Ethereum to guarantee its security.

Plasma may be regarded as a “child-chain” which could run entire applications featuring thousands of users with minimal interaction between it and the main-chain of Ethereum. However, this “child-chain” would also be able to produce its own “child-chains”, essentially creating numerous branched blockchains, all of which are connected to the main-chain. Since operations on those sub-chains won’t have to be replicated across the entire main network, they could move a lot faster and reduce transaction fees.

Simply put, the idea of Plasma is to allow the Ethereum blockchain to continue handling smart contracts while only broadcasting completed transactions.

Also, here is another article that gives other options to even using blockchain as an option. Here is a great diagram that they use when comparing blockchain to tangle & hasgraph.

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