LogFAQs > #979997723

Bitcoin (released 2009)- the first demonstration of digital currency and a separate payment network that anyone can use without needing to go to some authority to receive access. At a bank you need to submit relevant paperwork, with Bitcoin you just download the software for a wallet and you're good to go for a network scoping the entire world. This is powerful as not everyone has access to a bank in their area.

Nowadays, people in 3rd world countries use the Ethereum network and get paid in USDT, USD Tether, a stablecoin pegged to the dollar (1 USDT== 1 USD). But the bitcoin pioneered the technology.

Ethereum (white paper released 2014)- Early bitcoin maximalists, diehard bitcoin fans, had grand dreams for the bitcoin network. You had a financial network that has effectively 100% up time. Bonafide digital assets in the bitcoin (you can't copy/paste a bitcoin like you can copy/paste MP3 files; move 1 BTC from wallet A to wallet B and it will no longer be at Wallet A), so what else can you do with the network? People wanted to put programs on the bitcoin network; accessible to everyone with 100% up time. Turns out you couldn't program shit on the bitcoin network. So disgruntled and frustrated maximalists moved on and created new projects to achieve their vision. Ethereum was among them and with the most exciting vision of becoming the world's decentralized computer as a generalized blockchain platform to host all these programs and protocols people dreamt of.

Ethereum has since grown considerably as the defacto platform for blockchain development. They've recreated a number of traditional financial services with such effectiveness to the point of catching traditional finances attention and have them wanting in.

Unified Golden Record (2023-present) - But here's the problem with Ethereum, first; because of how security is prioritized, the transaction processing speed is too slow. VISA handles something like 40K transactions per second (don't recall the exact number, but it doesn't matter). Ethereum handles 12 per second (this problem has been solved to an extent with layer 2 blockchains that inherit Ethereum's security). Then there's an even bigger issue of it turning out that the libertarian cryptopunks heading the core development of Ethereum, once they have a taste of power, they're not letting that shit go. And so they supported what's called Miner Extractable Value, or MEV. Simply put, for every transaction you make in purchasing a token, a miner will see the transaction you're making and essentially buy it before you to sell to you at a higher price. It's basically theft.

So Banks' response to this is to fork Ethereum and use their own version. However, each bank has their own blockchain. Hundreds of banks means hundreds of private blockchains. More importantly, the NFT craze everyone laughed at? That also caught the eye of banks. AND they have the technology to link an NFT to a real world asset so that NFTs properly represent the RWA as tokens on the blockchain. So right now for banks, the focus is on deploying out these "tokenized RWAs" for trade and use in the industry. It's a financial revolution.

The current direction for public and permissionless blockchains, like Ethereum, waiting for the next craze, ideally real projects that provide real value, but it'd likely be new applications that are designed to be used on multiple blockchains simultaneously and connected seamlessly. Cross decentralized applications or Xapps, the evolution of dapps.

I speedran the history and painted the future somewhat grim with the dominance of bank chains. But the industry is super exciting. It's the next evolution of the internet. The key to understanding the value of blockchains is to understand the power of smart contracts (...which not once did I talk about this). I think that's the hardest thing to wrap your head around. But if you can understand the potential of it then you can understand why so many developers are committing their lives to the industry and be able to filter out those who are merely in it for a quick buck.