Recursion: It’s a Helluva Drug
Let’s walk through the progression real quick. The world may never catch up to this, but here’s the state of things.
The “blockchain” is a killer app. It is a concept, when implemented in “application” form, that absolutely destroy (“kills”) the technology is meant to update. That “technology” is the ledger. A simple PUBLIC record of credits and debts on an account. The foundation of an economy and civilized society. Bitcoin (BTC) is such a “killer app”.
A “Turing Complete” blockchain is a killer app. It is a concept, when implemented in “application” form, that turns the notion of what a “computer” might be on it’s head. Credits/Debits/Interest/Loan/Pooling/Dividens/Rewards, anything can be programmed into a “smart contract” and now debits and credits trigger if’s and then’s in chains that can simulate any task that logic can complete (i.e. “Turing Complete” = what a computer can do). Ethereum (ETH) is such a “killer app”.
A “Proof of Stake” Turing Complete blockchain is a killer app. It is a concept, when implemented in “application” form, that refines how a blockchain is built. No longer are trillions upon trillions of numbers randomly guessed in the infinitesimal chance to earn the right to forge a new block (BTC/ETH), instead “consensus” is achieved by those who have a stake (locked tokens) in the blockchain network. “Validators” are picked at random to forge transactions into a new block in a ratio akin to their stake. Violators are “slashed” or “jailed” and consensus is a thing everyone strives for, and is achieved quickly. Energy use (AND GAS FEES) for the network are cut by 100-fold. This also speeds up Transactions Per Second (TPS) by about 1,000x. Cosmos (ATOM) is such a “killer app”. (there are others…but we aren’t done yet).
A public, decentralized ledger (i.e. a “blockchain”) like ETH, BTC, or ATOM is PUBLIC. All transactions/balances are public. BTC differs from ETH. Bitcoin (BTC) is a “transaction” ledger. It keeps track who sends what value where. You have to “roll it up” to get a balance. But once you know someone’s public address (how tokens are exchanged), you can see their entire transaction history. Ethereum (ETH) is a “balance” ledger. Once you know the public address of an account, you can see the current balance and entire transaction history of that account and every account they’ve interacted with.
This…is an issue. It’s not something that is talked about a lot. People would be a lot more wary of putting money in a wallet when they realize everyone in the world can see what’s it in if they know where it is. This is similar to having a house made of diamond. Yes, it’s unbreakable, but it’s also transparent, and everyone can see your shitcoins if they know where you live.
So, how do we keep blockchain, keep Turing Complete, keep Proof of Stake, and keep Privacy of balances?
It’s the best kept SCRT in crypto. We’ll see how long that lasts.
My guess is much less than a year.