Well I’m going to try and be the only youtuber who keeps up with the important things in
the space, like respecting the pump, selling garbage smart contract developer courses,
and of course my bybit referral link.
You know that aint us, this is...because it’s time for Chico Crypto!!
So what is important in this space to me!?
Well, decentralization, working products and dapps, and a bright future for both.
But the future of decentralization and working dapps is at a crossing point in history.
The world is moving digital, and with crypto and blockchain the ideal solutions to fulfill
those needs, scaling needs to happen, but what is the effect of that on decentralization?
So let us begin with Bitcoin scaling, because it’s short and sweet.
The lightning network had a solid 2020 after being stuck at or around 10 million throughout
2019.
Just last week, it finally broke the 40 million mark in TVL.
Now centralization has become the major criticism of the lightning network.
The lightning network uses lightning nodes that route the transactions.
But for these nodes to route, they need to have the capacity of bitcoin held in the node,
equal or above the value that is being transferred.
Thus, RICH, high balance nodes, will get all the channels, centralizing bitcoin as transactions
go through only a certain number of nodes.
So since the growth of lightning from 2019 to today, has it become more decentralized
or centralized.
Well the latter, more centralized.
What do you mean Tyler?
Going to bitcoin visuals, the number of lightning nodes and channels has been growing and increasing.
How has it gotten more centralized?
Well, back in 2019, we can use the wayback machine to check out the top capacity, lightning
network nodes on 1ML.
The top 10 nodes, added together based on their capacity, controlled about 30 percent.
With the top capacity node, single handedly only controlling about 3.4 percent.
What does this look like today?
The top 10 nodes, control now over 45 percent of total capacity, with the top node, single
handedly controlling over 11.3 percent.
It has gotten more centralized, in the past year as network growth and total capacity
has increased.
Which, some lightning proponents said wouldn’t happen.
Well the proof is in the data.
So layer 2 with BTC is getting more centralized than it’s underlying layer 1 counterpart.
What about the applications built on top of the lightning network, called lapps.
Its version of dapps?
Well all time, there are some built, wallets, payment channels, a swapper, and others...but
soooo limited in use, and very very basic.
But is a second wave of lapps coming?
Alex Bosworth on twitter, tweeted about a new lightning lapp, for paid file sharing
coming out of MIT and said is there a 2nd wave of lapps coming?
From my perspective so far we've only seen the tiniest tip of the iceberg of what's possible
to build on LN And it is True, bottlepay one of the top og
lapps, is reenvisioning itself, creating a new consumer gateway to the Bitcoin’s lightning.
Breeze, is the point of sale technology for both merchants and consumers.
The fold app is a rewards app, which lets users earn bitcoin from the lightning network
for shopping through it.
Even having a card, allowed in the US rewarding you for physical spends.
A remittance solution is coming, called strike which utilizes the lightning network to speed
it up.
But even with the 2nd wave, the applications are limited to just payments.
Once again there isn’t much DeFi that can be done on top of lighting….unless, you
get even more centralized.
Yes complex dapps, are ready to go for BTC...coindesk covered it in July.
“Why This Dev Built a ‘Centralized Ethereum’ on Top of Bitcoin’s Lightning Network”
Yes, it's fully centralized, as seen in the article, the creator going has full control
and to the website, it for building fully centralized applications, with smart contracts
but utilizing the lightning network for just the payments.
Will this work??
Will these gain adoption?
Well network effect is huge, and bitcoin apps haven't seen much adoption because they haven’t
existed, while Ethereum and dapps have been going strong for years.
And in my opinion, Etleneum is the bitcoin lighting community bending the knee to the
Ether…
Because Ethereum dapps are built and being used.
Dapp Radars end of the year report showed that….it says in the report, throughout
2020, 95 percent of transaction volume belonged to Ethereum, compared with all other blockchains,
and this is due to 99 of transactions volume flowing into the DeFi category, oh which Ethereum
controls.
Yet, the bitcoiners will laugh at Ethereum right now, and say most of those dapps are
unusable because of the high transaction fees.
Which isn’t untrue, the fees have bubbled and outdone the cryptokitty days back in 2017,
as more of these dapps come online.
Most Ethereum dapps have come to a standstill, unless its a swapper or exchange, being powered
by whales.
Except only a couple of dapps which use both ethereum, and a certain scaling solution.
You can use the future of crypto right now.
So what are the usable dapps!?
Well one, that is a game, called dark forest.
It basis itself off of the concept of a “dark forest” — an environment in which detection
means certain death at the hands of advanced predators.
In this environment, publicly identifying someone else’s location is as good as directly
destroying them.
It’s a space exploration game of hide n seek, an honestly fun game, that is only possible
thanks to their use of zero knowledge proofs, zkps.
Hackernoon covered the beat, 6 months ago, in an article titled “Zero-Knowledge Proofs:
Adventures in the Dark Forest” and in it, it explains the fog of war, the things that
hides players and their moves, which is enabled through zkps.
But the article expalisn back in the beta, it had a problem, the ZKP verification on
the miannet, would have cost over 7000 ether, for only 1 week of play...but luckily it was
done on the Ropsten testnet.
And back in this article, hackernoon said “But the incident highlighted an important
problem with Ethereum: How can the network support such frenetic activity, when Dark
Forest is just one of its many applications?
And in this matter, zero-knowledge proofs provide the answer yet again.
Yes back in August, developers were looking at zero knowledge rollups, to scale dark forest….loopring
was even mentioned.
Yet where did Dark Forest go, after this Beta on Ethereum ropsten testnet?
Well in October, they announced version 0.4 of the game, and in bullet 3, the team said
“Better “Test” Network: We’re using the xDAI STAKE network for Dark Forest v0.4.
The xDAI STAKE network is an L2 “staging” network with higher transaction throughput
rate and lower reorg frequency compared to Ropsten.
It also allows us to start loading small amounts of real economic value into the game.
Then in this FAQ about v4 they explain why they are using xdai “We ran previous rounds
of Dark Forest on the Ropsten test network.
Due to long reorgs and less reliable block times, we’re experimenting with the xDAI
network.
It will be a while before Dark Forest is available to play on mainnet”
Hmmm, xdai, was a better test network, and finally allows real economic value into the
game.
Such stage.
Such wow!
So why didn’t they go with zk rollupus?
Well it wasn’t ready and couldn’t handle all the smart contracts.
Why didn’t they go with rollups?
Well it wasn’t ready and couldn’t handle all the smart contracts.
Why didn’t dark forest go with any other scaling solution or layer 2.
Well I already answered it.
It wasn’t ready and couldn’t handle all the smart contracts.
Like pushing out this batch of transactions in game, and having it instantly go through.
I would like to introduce a Blockchain Leaks journalist, and researcher HODLbear, to show
us just that….
So what else is usable not being held back by scaling today?
Putting out Jaw Dropping Stats??
In terms of both volume and fees?
That is the perpetual protocol, and because of its performance, the price isn’t doing
too bad since I called this was going to be big with this video, Open Your Eyes, Altseason
is Here...since December and the vid, Perp has went from under a dollar, to pushing towards
the 5 dollar mark.
Yeehaw!
Now, perp, is just that a decentralized perpetual protocol, and the app is as smooth as butter.
US users are not allowed to use it, and using a VPN will break their terms of service, so
don’t do it.
But how it works is oh so excellent.
They take care of all l2 xdai stuff, behind the scenes, depositing to l2, is simple, you
are at the whim of the high transactions fee there, as seen from the deposit, but it happens
quick.
Once USDC is in the wallet, it’s easy to put in a margin position, and the free, oh
so low...only 16 cents for this trade...and then withdrawing, simple and easy too, feeless,
and you can do any amount, even something as low as 3 bucks, 3 usdc.
So, the big question is are you ready to scale?
The options are out there, for users and developers, just gotta know where to look.
Cheers I’ll see you next time!