By Josh Stark & Bruno Lulinski
In the Year in Ethereum 2021, we published a chart comparing the total transaction volume of the Ethereum and Bitcoin blockchains. Last year, Ethereum transferred approximately $11.6 trillion (ETH and ERC-20s), and Bitcoin transferred approximately $4.6 trillion (BTC and USDT).
After publishing, we saw a graph from Galaxy Digital claiming that in 2021 Bitcoin had settled $12.41 trillion USD:
What do a book, a radio broadcast, and the human voice all have in common?
Today the answer is easy: they all contain information.
But if you asked someone the same question 100 years ago, they would struggle. They would not have easily identified that these different things all share an abstract property like “information”.
👋 Note: Originally published on Jan 20, 2021 on Medium.
Ethereum is the digital frontier.
Because it is open and programmable, Ethereum offers a vast uncharted expanse filled with opportunity.
Over the last few years, this frontier has attracted its first major settlements. The freewheeling bazaar of decentralized finance (“DeFi”) has grown into a sector that is beginning to compete with Silicon Valley. This year, a second ecosystem began to put down roots: the creator economy of cryptoart, music, and media.
👋 Note: Originally published on Jan 22, 2020 on Medium.
Ethereum began as a blank canvas.
Ethereum is an open, permissionless blockchain that developers can use to create any kind of application they want.
This year, the early strokes laid down on that canvas began to form into a coherent picture.
👋 Note: Originally published on Sept 9, 2019 on Medium.
I’m fond of saying that “Ethereum needs better critics”. Hopefully Albert and Fred continue being critics, and through debate with the Ethereum community, become better ones over time. A positive trait in the Ethereum community is our interest in deliberately seeking out flaws, exposing them, and fixing them.
The explicit goal of this short post is to bait Albert and Fred into being better critics. Expand on your arguments, tell us (beyond generalities) what you think Ethereum is doing wrong, and what others are doing better.
👋 Note: Originally published on Jan 16, 2019 on Medium.
Ethereum began as a bold experiment. Can we build a universal platform for digital money and assets, un-censorable applications, and decentralized organizations?
We started with a slightly smaller experiment: was it possible to launch a blockchain that could execute arbitrary programs? Over time, the Ethereum community began new experiments. Would developers find it interesting? What applications are actually useful? The community learned from its successes and failures, and iterated on their work. New people joined the community and started running their own experiments.
In 2018, the Ethereum community ran more experiments than ever before. What did we learn? This summary of the year in Ethereum is our attempt to identify the most important developments — the things that we’ll say mattered, 10 years out.
👋 Note: Originally published on June 7, 2017 on a now-defunct personal blog.
A concept I often use to explain the potential of blockchain technology is “the space of possible economic relationships”.
What do I mean by economic relationships? I mean any situation where two or more persons enter into a relationship concerned with value:
👋 Note: Originally published on June 6, 2018 on Medium.
The internet is changing again.
Over the last decade internet-based services have trended towards centralization. Today, a handful of companies control the platforms we use to search for information, store our personal data, manage our online identities, and communicate publicly and privately.
At the same time, a group of seemingly unrelated technologies are being developed on the fringes of the tech industry, ranging from encrypted messaging to digital money. Within that loose community, “web 3” has become a catchall term for a vision of a new, better internet. An internet where payments and money are natively digital, where “decentralized” applications compete with centralized ones, and where users have more control over their identity and data.
👋 Note: Originally published on Feb 12, 2018 on Medium.
For ethereum 2018 is the year of infrastructure. This is the year when early adoption will test the limits of the network, renewing focus on technologies built to scale ethereum.
Ethereum is still in its infancy. Today, it isn’t safe or scalable. This is well understood by anyone who works closely with the technology. But over the last year, the ICO-driven hype has begun to far exaggerate the current capabilities of the network. The promise of ethereum and web3 — a safe, easy to use decentralized internet, bound by a common set of economic protocols, and used by billions of people — is still on the horizon, and will not be realized until critical infrastructure is built.
The projects working to build this infrastructure and expand the capabilities of ethereum are commonly referred to as scaling solutions. These take many different forms, and are often compatible or complimentary with each other.
A few months ago Parker Thompson, a well known Silicon Valley VC, tweeted that “the concept of crypto-economics is stupid. It’s economics. Inventing your own word is just an excuse to ignore well-understood concepts.”
The term “cryptoeconomics” causes a lot of confusion. People are often unclear on what it is supposed to mean. The word itself can be misleading, as it suggests that there is a parallel “crypto” version of the whole of economics. This is wrong, and Parker is right to mock such a generalization.
In simple terms, cryptoeconomics is the use of incentives and cryptography to design new kinds of systems, applications, and networks. Cryptoeconomics is specifically about building things, and has most in common with mechanism design — an area of mathematics and economic theory.
👋 Note: Originally published August 15, 2016 on Medium.
While thinking about the lessons of the DAO hard fork I’ve been reaching for terminology necessary to make a useful distinction, and thought it would be useful to set it out here.
The DAO hard fork was controversial. Some believe that forking the network to return stolen funds was a betrayal of the basic principles that animate the ethereum project. Others viewed it as a pragmatic solution that, though it shouldn’t be used often, was necessary in this case.
Hard forks will often be contentious, even when they are changing the protocol rather than “undoing” the history of transactions. Because a hard fork will, by definition, break backwards-compatibility, the entire community must agree on a change in order to continue together on the same blockchain. If unanimity is not achieved, the minority can reject the change by continuing as a distinct blockchain.
The term “smart contract” has no clear and settled definition. The idea has long been hyped to the public as a central component of next-generation blockchain platforms, and as a key capability for any practical enterprise application.
They are defined variously as “autonomous machines”, “contracts between parties stored on a blockchain” or “any computation that takes place on a blockchain”. Many debates about the nature of smart contracts are really just contests between competing terminology.
The different definitions usually fall into one of two categories. Sometimes the term is used to identify a specific technology — code that is stored, verified and executed on a blockchain. Let’s call this type of definition “smart contract code”.
Over the last year, the concept of a “smart contract” has received renewed attention in both the technology industry and in legal and business circles. Recent advancements in a field known as “blockchain technology” have led some to believe that smart contracts could soon offer alternatives to traditional commercial and financial agreements, with dire results for the legal and financial sectors. While this enthusiasm may be premature, lawyers nonetheless remain mostly unaware of this important emerging technology and the long-term implications for their profession.
Readers familiar with blockchain technology will know that the term “smart contract” is often used in a more general sense to refer to any script or program that operates on a blockchain. However for the purposes of this article, I focus on the narrower meaning described above: using code in place of traditional contractual agreements between parties.
👋 Note: Originally published on March 8, 2016 (link). This was part 7 of 7 in a series of posts released under the pseudonym Creole.
Imagine thousands of computers all over the world connected by the internet. Some are home PCs, some are laptops, some are servers sitting deep underground. But each of them runs the same computer program, which connects all of these computers into a network of equals.
This program sets out rules for how the computers should work together. How to talk to each other. How to store data. Specifically, this program lets them behave as though they were all together a single, world-spanning computer. Every one of the thousands of devices that makes up the whole does the same thing, in the same order, in lock-step. They’re all recording the same information and running the same programs. In a real sense, it is one computer. This computer is Ethereum.
The Ethereum world-computer is slow. It has to be. Every one of the thousands of component computers — which we will call “nodes” — is doing doing the same things at the same time. This also makes it expensive, compared to a regular computer. Every operation must be performed in parallel, all over the world, requiring hardware and electricity.
👋 Note: Originally published on Feb 29, 2016 (link). This was part 6 of 7 in a series of posts released under the pseudonym Creole.
You’re up early for work this morning, in the kitchen making coffee. In the backyard, out the window above the sink, is your landpad & charging station, decorated with the bright bold outlines of its QR address.
On the landpad sits the delivery drone, charging quietly. As its batteries fill, small amounts of money are paid into your house’s account every few kilowatts. It could charge lots of places — there are cheaper sources of power available of course —but in the end the drone cares about location. Your backyard is close to several distribution centres and a dense neighbourhood that makes a lot of purchases that are in the right weight category for this model. It’s a nice bit of cash every month. Some neighbourhoods tried to ban renting backyard space. It worked in some places, but others weren’t happy having to pay a higher average delivery fee for drones having to charge farther away.
This drone is one of several that have often used your landpad over the last few weeks. When it landed for the first time you thumbed through the ownership structure. Unlike the last few that took up residency in your backyard, this one owns itself. When it was built it was owned 50% by the manufacturer, and the remainder split between a variety of private investors, pension funds, and a bundle of smaller shareholders. But last year, a charity collective purchased a majority of the shares and set it on a path to self-ownership, voting the drone to take its profits and invest in purchasing its own shares. Last April, the drone purchased the final shares and became sovereign.
👋 Note: Originally published on Feb 22, 2016 (link). This was part 5 of 7 in a series of posts released under the pseudonym Creole.
In the third post, we explored how blockchains can serve as a platform for what I called “value technologies” — things that act like currencies, shares, or rewards points.
In this post, we take this idea further. Many people now believe that blockchains will let us build things more complex and more interesting than the simple value technologies discussed above. We can write software that can itself control currencies, shares, or rewards points. This “software agent” would be more like an independent economic entity. Living on the blockchain, it would be able to send, receive, or hold money — whatever it was programmed to do. Maybe it even provides a useful service to people, or to other software, for which it is paid.
The question people have begun to ask, in other words, is: can we make companies out of code?
👋 Note: Originally published on Dec 4, 2015 (link). This was part 4 of 7 in a series of posts released under the pseudonym Creole.
You’re a little early for work that day and decide to walk to the far Starbucks instead of going to the close Starbucks. The close Starbucks is one of those ones they cram into a rough corner of an office building, halfway between the fire exit and a fern. The far Starbucks is glass and wood and gleaming like a Starbucks should. You arrive and wait in line to buy a coffee.
Your previous purchases have filled your wallet with Starbucks points. You’re dimly aware of this. There are notifications from your phone occasionally, when you reach certain milestones (100,000th point collected! Grande Achievement unlocked!). You remember a few recent promotions that you sought out specifically for the high point rewards (first day of pumpkin spice lattes was 4.5x last fall). Some of the points are bound to the Close Starbucks, in the sense that they offer you 1.3x when used at that location instead of the base 1x at any other Starbucks — the property management company subsidizes them, in a vain effort to entice consumers into their monument to brutalism.
Some offices give employees points that are worth more at Starbucks near to their offices — a way to get them back into the office sooner — or in some other way valuable. (The ad agency up the street incentives their employees this way to visit coffee shops, bars, and restaurants that are deemed culturally relevant and therefore important for their employees to have visited, consumed, absorbed, reflected upon).
👋 Note: Originally published on Dec 2, 2015 (link). This was part 3 of 7 in a series of posts released under the pseudonym Creole.
In the first post I wrote that blockchain technology will make it cheap and easy to transfer money. In the second post we took a brief look at what that world might look like.
But blockchains won’t only be used for money. The same technology that makes it possible to cheaply and easily exchange digital currency is being adapted for other types of value, like shares of company stock or rewards points. The focus in the industry right now is in adapting blockchain technology to be suitable for the exchange of financial assets, and a staggering amount of money and energy is being invested into creating those platforms.
That’s exciting. Especially if you work in finance. But it’s hard to know why most people should care whether we can reduce settlement times for syndicated loans, or whether the DTCC is the next Blockbuster. Blockchains didn’t become objects of passionate intensity for so many because they will make life easier for the worlds’ largest banks.
👋 Note: Originally published on Nov 7, 2015 (link). This was part 2 of 7 in a series of posts released under the pseudonym Creole.
You wake up to a slow pulse on your phone. Your PO account has received its monthly payment. You lazily wake the screen and thumb approval to the standard division:
- 45% (0.00005600 BTC) to mobile wallet [x1f8K…nb7]
- 50% (0.00006220 BTC) to savings [ICICI x1f9H…m4e]
👋 Note: Originally published on Oct 12, 2015 (link). This was part 1 of 7 in a series of posts released under the pseudonym Creole.
This is the first post of what I am calling Creole. The object is to convince a general audience that blockchain technologies like bitcoin and other “digital currencies” will have a large impact on our world.
This isn’t a popular view. Today it is difficult to even explain what bitcoin is, or how a blockchain works. Proponents too-often rely on dense technical explanations, or vague gestures towards far-future use cases. To many this sounds dodgy. If this new technology is so great, why can’t you explain it?
We’ve seen this dynamic before. Blockchain technology today is a lot like the internet in 1993 or 1994. A new technology used by a limited number of enthusiasts, associated mainly with geeks and pornographers. Explaining the internet in 1993 meant either getting into technical details like IP addresses and packets, or describing a vague future with uncertain benefits. Not a pursuit for serious people. The “web”, which would eventually fulfill most of the early advocates’ promises, barely existed.
On Earth 2 history took a slightly different course.
Computers, as we know them, were never invented. There was no analytical engine, no IBM, no Xerox PARC, and no Macintosh.
But all that changed on a sunny day in 1972, when Alan Alcorn revealed his invention to the world - a machine he called Pong: a person-to-person electronic tennis system.