Singularity years, crypto skeptics and believers alike have decried the lack of mainstream use cases for blockchain technology. Thousands of decentralized applications have been deployed, but mainstream use cases are scarce. That may be about to change.
A singularity, a point of infinitely dense matter, is theorized to have caused the Big Bang when one such point exploded, distributing matter throughout the universe. I think we’re at an analogous moment in the history of crypto.
Singularity Over the last year, developers have delivered fast, cheap blockspace to builders.
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The “majors” have made huge strides, with Ethereum (ETH) deploying its Dencun upgrade in March, reducing transaction costs for users of layer-2 blockchains to less than $0.01. Solana (SOL) has (largely) fixed the downtime issues that plagued it until last year, leading to a massive surge in economic value on the protocol.
New entrants have also been coming thick and fast. New layer-1 blockchains such as Sui, Sei, Aptos (APT) and others have launched in the past 18 months, promising unprecedented levels of throughput. This process is nowhere near complete, with yet another cohort of new and heralded blockchains expected to come to market with novel design elements throughout 2024 and beyond:
The experimentation stage begins
Chris Dixon, in his new book “Read Write Own,” predicts that “a key moment will be when the infrastructure becomes so good that application developers no longer need to think about infrastructure.”
Since crypto began, application developers have only had to think about infrastructure. Even if you had a novel idea for a crypto use case, infrastructure limitations likely kept you from executing it.
Now that multiple blockchains with diverse designs can operate reliably at scale and low cost, developers can focus on what they can do, rather than what they can’t.
The figure below illustrates just how much tech there is to be experimented with:
Recently, we’ve seen novel ideas for decentralized social media and social finance; DePIN networks that utilize high throughput blockchain solutions to enable real-world utilities; and AI-adjacent tools such as decentralized compute networks and AI agent platforms.
Over time, novel applications will only get more popular and more performant as they work out what infrastructure best suits their needs. Perhaps this process will end with scaled applications running on modular solutions settling back to Ethereum, or maybe the monolithic vision will win, and Solana, Monad, Aptos or Sui will become the preferred blockchain of the masses. In the end, the market will decide what solutions work best once they can be tested at scale.
Here’s a breakdown of the concept:
Limited Blockspace: Traditionally, blockchains faced limitations in the amount of data they could process and store. This limited the number of transactions that could occur on the network, leading to scalability issues and high transaction fees.
Recent Advancements: In recent years, developers have made significant strides in creating faster and cheaper blockchains. This includes layer-2 scaling solutions and upgrades to existing blockchains like Ethereum.
The Blockspace Singularity suggests that these advancements could culminate in:
Widespread Adoption: Blockchain technology becomes more accessible and user-friendly, leading to a surge in mainstream adoption across various industries.
Scalability and Efficiency: Blockchains can handle a significantly higher volume of transactions at lower costs, overcoming past limitations.
Explosive Innovation: A surge in new applications and services built on blockchain technology, creating a more vibrant and interconnected ecosystem.
Potential Benefits:
Financial Inclusion: Blockchain technology could enable faster, cheaper, and more secure financial transactions, potentially reaching underserved communities.
Supply Chain Management: Improved transparency and traceability within supply chains, reducing fraud and inefficiencies.
Decentralized Governance: Blockchain’s core principles could support more democratic and transparent governance models.
Challenges and Considerations:
Regulation: Clear and effective regulations are needed to ensure responsible innovation and mitigate potential risks.
Security: Blockchain technology is still evolving, and security vulnerabilities can exist. Continuous development and security audits are crucial.
Accessibility: Not everyone has access to the technology or skills needed to interact with blockchain applications. Bridging the digital divide is essential.
Is the Blockspace Singularity Here?
It’s too early to say definitively. However, the recent advancements in blockchain technology are encouraging signs. Whether we reach a true singularity or witness a more gradual evolution remains to be seen.
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