Ecosystem Positioning
Among the major trends of thinking in the blockchain space is the idea of maximalism. In the blockchain context, maximalism is the belief that there exists an already developed blockchain, most often Ethereum or Bitcoin, that is capable of handling all potential use cases that require blockchain and that efforts create new “layer 1” blockchains are pointless and perhaps even counterproductive.
At Topl, we reject maximalism for two reasons, the current age of blockchain technology and the technical realities of such infrastructure level technologies.
Blockchain technology was introduced, as the first ever implementation of a value bearing network without the need for a central authority, in 2008 with the publication of the Bitcoin whitepaper. By comparison, the first algorithms and programs for artificial intelligence and machine learning were written in the 1950s and 1960s. Despite this 60-plus year history, dominant frameworks for AI and machine learning, such as Caffe and Tensorflow, were only developed in 2013 and 2015 respectively. By a similar token, Facebook represents at a minimum the 4th generation of social media, preceded in dominance by AIM, Friendster, and MySpace, and is still facing increasingly robust competition from newer platforms such as TikTok. At the same time, Google only came to the market after other search engines such as Lycos, Infoseek, AltaVista, Ask Jeeves, and Yandex had already launched.
As we look at these other technologies, with equally challenging engineering requirements and network effects to blockchain, we can conclude that any expectation that a first or even second generation blockchain network represents the culmination of an entire technology movement has taken a dramatically shortsighted view of innovation.
While this first argument may leave open the possibility that at some time in the future there will be a singular blockchain network, the technical requirements and contradictions imposed on blockchain technology make the emergence of a maximal blockchain impossible rather than merely postponed to the future.
Embedded in any infrastructure technology are a number of inescapable tradeoffs that must be made, security versus cost and throughput versus decentralization being among the most significant. So long as the problems meant to be addressed by blockchain technology remain diverse, there will remain no single correct choice on any two opposing characteristics. An application such as commodity trading may demand absolute maximization of transaction throughput while peer-to-peer lending would benefit greatly from maximized decentralization.
In addition to the admittedly abstract notion of necessary tradeoffs, the notion of maximalism is proven flawed by the concrete development plans of the very blockchain that claims the most maximalist adherents, Ethereum. Central to the design of Eth2, the ongoing upgrade to the Ethereum network, is the concept of shards. Similar to the “parachains” found in Polkadot or Cosmos’s “zones”, Ethereum shards can be very nearly classified as independent blockchains that merely embody a common communication protocol and may or may not share validators or other crypto-economic infrastructure.
Having rejected the idea of maximalism and developing our own layer 1 blockchain network, we recognize that it is incumbent upon Topl to provide an answer to the question of interoperability, “if there are going to be multiple blockchains, how will they still interact?” and to offer a vision of value accrual in our blockchain economy.
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