[Question] "High gas prices seem to be the norm now on Ethereum,
does this kill innovation for non Defi projects?
And how can this be fixed?"
[Answer] [Sigh...] Yes.
It's a problem.
But it's not an unsolvable problem.
And it can be fixed probably in exactly the same two ways,
maybe three ways that it could be fixed in Bitcoin.
So how do we fix high fees in Bitcoin?
Three ways.
Increase the underlying block size,
which creates problems with de-centralization elsewhere,
implement various forms of side chains,
or implement a layer two technology,
which is effectively a side chain
per payment channel kind of idea,
where you have a framework for creating lots of side chains,
which are payment channels.
And Ethereum can do all three of these.
But again, Etherum already has
a much, much bigger blockchain
because it's recording a lot more information
in order to keep state of smart contracts
and record the data that these smart contracts rely on.
So it already has a bigger problem than Bitcoin
in terms of the growth,
the accelerated growth of the underlying blockchain.
So how is this fixed?
Well, the first fix is
with the introduction of Ethereum 2.0,
we have a concept called sharding.
And what sharding does is essentially
it partitions the blockchain
into a number of, let's call them sign chains or shards,
that contain a subset of the data
and then synchronize with each other.
Then another way is to use layer two technologies.
And layer two technologies such as Raiden
and opportunistic rollup and ZK-Rollup
are already deployed on Ethereum
and will continue to grow
to address this underlying problem.
Now, let's take a step back
and look at this from a philosophical
and strategic perspective.
I don't wanna say, told you so,
but I am gonna say, told you so.
We've been having this conversation
for a long time in Bitcoin.
Back in 2014, 2015,
this conversation about scaling
and low fees had already started.
And at that time, many people in the Ethereum space
made two claims that proved to not age well.
One of them was that this entire debate
caused a lot of drama in Bitcoin
and demonstrated how toxic the Bitcoin culture was.
And the other claim was that Ethereum
could do it better, cheaper, faster,
and fees and block size was not
gonna be a problem for Ethereum.
Both of those claims ended up being untrue.
First of all, as soon as we had very serious issues
to debate in the Ethereum space,
some toxic attitude came out there too.
And a lot of the early kumbaya feeling,
that existed in Bitcoin too or also, in 2012, 2013,
everybody was kumbaya in Bitcoin,
quickly disappeared in Ethereum also
once you had significant controversy to debate.
So now that we see that Ethereum
also has to deal with these fundamental design decisions,
these trilemma issues: security,
decentralization, or cost.
And balancing these three is difficult.
So Ethereum is trying some different approaches
to solve these problems, but the problems still exist.
And here's the underlying lesson
for all of the other chains that say, we can be cheap,
we can be secure and we can be decentralized all at once
because of our latest Widgetorama 3000,
which solves all of these problems
through the application of magic, quantum tangle chains.
Whatever.
The bottom line is that
these are not easy problems to solve
and when you solve them,
but you don't solve them at significant scale,
well, you didn't solve them.
Never confuse calm seas for good sailors.
You're a good sailor when you're a good sailor
in rough seas.
You're not a good sailor
when you're sitting in the port
laughing at the people in the storm
and goin, "look at you people, you're all very wet."
The bottom line is that both the difficult choices
and the drama that happens
as a result of tackling difficult choices
are going to come to any chain
that is lucky enough to become successful enough to matter.
And all of those scaling issues will arrive.
So the lesson from Ethereum,
it's not really about Ethereum
because we'd already learned that with Bitcoin and
many people in Ethereum understood
that this problem was coming.
The lesson here is for many of the other systems
that pretend that these problems are not there
or won't happen to them.
And they will.
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(chill music)