Jill Gunter is no stranger to crypto — she has seen the market through its ups and downs, doing research on blockchain protocols, working at several cryptocurrency startups, and co-founder of his ownand invest as venture capital in Slow Ventures. Gunther first started following cryptocurrencies in 2011 when she was working in the traditional financial world as a derivatives trader at Goldman Sachs and when Bitcoin was the only major Tier 1 blockchain.
Since then, Gunther spoke to the TechCrunch Chain Reaction podcastit has been able to witness three distinct phases in the industry that have led it to this moment of intense competition between a few established blockchains and even more new protocols coming into play.
The first phase is what Gunter called the altcoin era. She explained that protocols such as Litecoin, Dogecoin, and ZCash were born in this era when developers sought to customize the Bitcoin protocol in specific ways, such as changing the block size to change the system’s throughput.
“What you got is a lot of blockchains and a lot of tokens that had the same properties as Bitcoin but changed the feature set,” Gunther said.
According to Gunther, the next stage in the development of new blockchains came with the creation of Ethereum in 2015. Ethereum brought a “sea change” in terms of what could be done with the blockchain by introducing the concept of programmability.
She went on to say that the modern era of layer-one blockchains can be understood as a period when developers are trying to tweak the feature sets of programmable blockchains to solve some of the problems with Ethereum that exist today. Developers are trying to lower fees, improve usability, and add privacy features to blockchain applications that are not available on the first layer Ethereum chain itself.
Ethereum’s high transaction costs and low throughput continue to plague the network with problems, frustrating users. The recent sale of land in the Yuga Labs metaverse made headlines last week as people trying to buy NFTs faced exorbitant gas fees and failed transactions due to the popularity of the fall.
While alternative blockchains like Solana and Avalanche offer lower costs and can process transactions much faster than Ethereum, Günther said these other chains have not been “fully verified like Ethereum” because they didn’t need to handle so many users. straightaway.
What’s more, all these new networks have “centralized something in some way,” Gunther continued.
“For the most part, these things have ways in their roadmap to further decentralize over time, but again, we have yet to see how these are tested. We also have yet to see how decentralization really matters to users in terms of the architecture of these things,” Gunther said.
These various blockchains increasingly have to compete to attract developers to their ecosystems. As a co-founder of a first-level blockchain focused on privacy Espresso SystemsGunther knows firsthand how difficult it is to get engineers to invest time in developing projects on a particular network when there is so much competition.
“Personally, I don’t think it’s enough to just wave a white paper that says, oh, we’re actually going to be more scalable and more decentralized than anything else,” Gunther said. “I think you need to have really different features from what already exists. And I think neither is good enough without the other – I think you need to justify why your system will be the most popular and most reliable in the future.”
Admittedly, she added, all Tier 1 designs “make the right sounds” but have yet to be tested by users. Especially if the cryptocurrency continues to experience a downturn in the market, the winners and losers in the battle between layer 1 blockchains could be split faster than the industry expected.
Credit: techcrunch.com /