As Markets rise, scaling wars are heating up
Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets
When it comes to the endgame for crypto adoption, everyone agrees that Blockchains need to be more scalable than current systems but also maintain sufficient decentralisation and security. This is the so-called ‘Trilemma’ in Blockchain ‘speak.’ So far, no project has managed to hit all three marks. Crypto skeptics ask why crypto adoption in the mainstream still lags far behind the hype. The main reason is that before the most exciting use-cases become reality, more technological breakthroughs are needed.
The good news is that this endgame is approaching. One of the technologies that enables scaling are so-called ‘zero-knowledge’ proofs. ZK proofs enable users to mathematically prove that something is true without revealing any other content. The range of applications of this technology ranges from finance to business contracts, encryption, voting and a lot more. It could enable regulatory and KYC/AML compliant privacy and save the economy billions in costs. In the Blockchain context it allows you to validate transactions between a Layer 2 and mainnet extremely fast and at very little cost.
This week one of the most anticipated projects that is at the forefront of zk technology, Starknet, announced their token launch and its distribution to the community via a so-called airdrop. This event had been widely expected, but the timeline was unclear. Starknet previously raised capital from top-tier investors at a $8 billion valuation. Thanks to that, a lot of attention, mindshare and capital are now coming for zero-knowledge technology.
Other highly anticipated Layer 2s that use zero-knowledge technology are zkSync, Linea and Scroll. They are all live, they all have years of research and development work behind them. While it is important to note that they all rely on Ethereum to power security and transaction consensus, the zk ecosystem is heating up fast.
From a wider market point of view, the exciting news is that scaling Blockchains without losing core benefits like decentralisation is starting to become reality. Over the next few years, the range of applications that entrepreneurs can build will grow dramatically. The excuses are running out. The real work to change the world with Blockchain-based applications that can benefit billions of people is beginning.