Another New Layer-1? Starting All Over Again ‘Isn’t Sustainable’

Every few years, some kind of new standard upgrades the internet experience, providing better performance in one way or another. This, in turn, creates a greater capacity for new applications and wider usage of the technology.

For some advancements at the fundamental level, networking hardware has to be replaced to take advantage of new features. IPv6, for example, was introduced way back in 1998, offering better routing than IPv4 without packet fragmentation, among other improvements. But for it to be adopted by the masses, manufacturers had to roll out newly compatible devices like routers and WiFi chips.

It can take years for base-layer tech to be widely embraced as people gradually upgrade from older hardware. Mass adoption — especially for tech operating at the “ground level” — can be a painfully slow undertaking.

Mustafa Al-Bassam, co-founder of Celestia Labs, compares this process to what he sees as the inefficient advancement of blockchain technology on the Empire podcast  (Spotify / Apple).

Al-Bassam talks about the implementation of HTTPS — a more secure version of HTTP that uses encryption to send data between a server and a browser —  to illustrate his point.

“Imagine if, in order to deploy HTTPs, we had to modify the entire networking layer of the internet and modify the actual routers and the actual WiFi chips and everything like that.”

“It would take ages.”

“And that’s exactly what we’ve been doing with IPv6 versus IPv4,” he explains. “That’s basically taking two decades to get mass adoption because you have to modify every WiFi chip, all the hardware, all the routers.”

Al-Bassam says the analogy can be used to understand the current predominant mindset in blockchain development.

When does it end?

“Imagine if you have to create a whole new layer-1 just to experiment with a new execution environment.” 

“It would be insane,” he says.

“That’s basically how we’ve been operating over the past 10 years.”

Blockchain innovation has been stuck in a “monolithic layer-1 loop,” Al-Bassam says. Every time incremental improvements are made to the execution environment, he says, “we launch a new layer-1.” 

Ethereum began the cycle of layer-1 innovation in 2015, followed by protocols like EOS and later, Cardano. In more recent cycles, Solana and Avalanche joined the fray, and “now we have Sui and Aptos,” he says.

“When does it end?” he asks. “It’s not sustainable.”

A rollup-centric roadmap

Al-Bassam is skeptical of the constant flow of new layer-1s that only provide incremental improvements and “just copy all the applications from the previous layer-1s.”

Ethereum development is focused on a “rollup-centric roadmap” in order to achieve scaling, Al-Bassam says. “It’s not sustainable to assume one synchronous blockchain will serve the entire web.”

“That’s ridiculous.”

It’s like assuming, he says, that “one server will serve the entire internet.”

Al-Bassam’s solution to the monolithic layer-1 loop is to create rollups that don’t require a layer-1 re-jig, instead building on top of networks. Rollups can be developed and iterated without tedious rebuilds of base layers.

Preston Evans, chief scientist at Sovereign Labs, explains his perspective on the current phase of monolithic blockchain development. “Right now, you’re sharing this single ‘computer’ between the entire world.” 

“And so the only thing you can run on that computer is the very highest value thing that you can think of.”

“If there was only one mainframe in the world, we would probably use that mainframe to run Nasdaq or something,” he says. “We would use it for something incredibly high value.”

Nobody wants to live in a world where computers are only used for Nasdaq, Evans says. “So what we’re building out is the infrastructure where, suddenly, everybody can have a ‘computer’ at home.”

It’s too early to say what people will do with these new decentralized computers, Evans says. “People didn’t necessarily predict Friendster, MySpace and Facebook and then TikTok and Instagram.”

“Ten years from now, we’ll look back and we’ll think it’s kind of ridiculous that activity was so tied to prices. That’s just an artifact of the fact that everything on-chain is financial right now, because chains can’t support anything non-financial.”

“The reason we need to have chains is not just to scale finances,” he says. “It’s to enable interesting use cases that are just not possible with the limitations of blockchains today.”

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