Interview, Fireside Chat
Five Open Problems for the Blockchain Computer
- The industry is described as being in the early stages of a new computational paradigm, viewed as a computer for only the last four to five years, characterized by a fundamental trade-off where decentralized systems are inherently less performant and more expensive than centralized ones.
- Decentralized computing is expected to shine specifically in applications where trust is the primary bottleneck, enabling features like bottom-up security emergence and deterministic consensus with finality in shorter timeframes compared to probabilistic proof-of-work.
- Near-term performance targets include reducing latency to finality and cost per instruction to enable use cases like smart keys for Airbnb within seconds, though current systems remain far from the physical lower bound imposed by the speed of light.
- To address scalability constraints such as the centralization risks of increasing block size, the industry is deploying specialized blockchain distribution networks and exploring consensus layer improvements like those by Dfinity, Ethereum 2.0, Cosmos, and Polkadot.
- Foundational requirements for a decentralized world computer include decentralized storage and networking layers, with projects like Filecoin, Sia, and Storj building marketplaces that utilize proofs of retrievability to ensure data integrity without central coordination.
- Future applications are anticipated to explode due to open-source combinatorial innovation and composability, with immediate focus on financial platforms for lending and derivatives, and gaming scenarios allowing cross-game asset ownership.
- The sector is transitioning from Web 2.0 social capital mechanisms to Web 3.0 financial incentive models, exploring identity mapping through projects like Keybase while balancing the trade-offs between strong identity verification and user privacy.
- Governance challenges regarding voter participation and fraud prevention are being addressed through token-based voting systems, while the community views the current era as a critical window similar to the 1990s internet dawn for influencing protocol-level incentive structures.
- Proof-of-stake mechanisms are presented as a viable path to match proof-of-work trust properties without electricity consumption by making resource requirements intrinsic to tokens, and decentralized storage is not expected to drastically reduce costs due to existing centralized economies of scale.
- Incentivized mesh networking protocols are being researched to decentralize the networking layer, a complex problem requiring hardware integration, where users earn cryptocurrency by operating routers to forward packets and provide connectivity.