The morning after a big software release can be both terrifying and exhilarating.
Kudos to the Ethereum team for pulling off a massively complex transition from Proof of Work to Proof of Stake. This reduces the energy consumption of the Ethereum blockchain by 99.95% (and global energy consumption by 0.2%).
I am still not convinced by the utility of the crypto ecosystem, and I am sure there will be bumps along the way. The transition to Proof of Stake will further entrench the power of those holding significant capital. Proof of Work meant influence aggregated to those who could deploy significant computing power by spending vast amounts of money on GPU hardware. The switch to Proof of Stake will remove the hardware intermediation layer. The massive savings in energy and speedups in transaction processing make it a worthwhile change.
Philosophical arguments aside, as a software engineer, I can appreciate a job well done 👏🏾👏🏾👏🏾.
What to do when your decentralized, scalable, performant blockchain turns out to be not so scalable, sort-of-centralized and not so performant?
Crypto’s selling point is robustness that is built on decentralization. No single points of failures should mean no downtime right? Right?
Turns out, crypto’s weaknesses are same as those of other, more mundane technologies. Bad code, bad actors and the fact that building scalable, distributed (and decentralized) systems is hard!
Solana, a Layer 1 blockchain, suffered a long outage over the weekend. This happened when the crypto markets are melting down..
Solana is supposed to be the answer to Ethereum’s performance and scalability issues. And yet, Solana has been plagued by performance issues and outages over the last few months.
This weekend’s issue was caused by “program cache exhaustion” due to “excessive duplicate transactions”. Solana developers released an emergency patch to resolve this issue and begged every validator to upgrade.
Where there is code, there are bugs..
Welcome to the brave new world, where the problems are the same as the ones in the old world. They just cost you a lot of funny money.
We tell stories and learn by analogy. A good story maps the abstract to the concrete. For the story to function, it has to fall back to a base of shared understanding.
When learning a new technology, I try to map what I am learning to my mental model of the world. I tell myself how this new technology fits into the stories I know and try to imagine what other stories I would tell once I learn it.
I have been struggling with learning about cryptocurrencies and Web 3.0.
As someone looking to explore the nascent Web 3.0 developer landscape, I keep getting lost in layers, tokens, protocols, DApps, and DAOs. Applications (technically Protocols) like Aave have access to billions of dollars in liquidity but trying to understand how things work leads to a maze of smart contracts, oracles, and tokens interspersed with more familiar words like liquidity, interest, collateral, virtual machines, etc. Like trying to make sense of a world through a fogged-up window.
Besides me being a little slow, I think the reason is that the stories are terrible. There are plenty of grand visions of censorship-resistant platforms, the possibilities of generating life-changing wealth, but these are built on self-referential and confusing foundations. Turtles all the way down.
It is early days and the world of cryptocurrencies is still a frontier. This frontier is being explored by a rag-tag bunch of clever programmers, mathematicians, financial wizards, resourceful scammers, and brazen hustlers.
But in order for a frontier to be settled, you need not just explorers but also settlers willing to uproot their lives to claim their 160 acres. You need developers to build mundane applications that solve mundane, but important problems. You need salespeople who can articulate the value proposition of building on this new frontier. You need good stories.
To stretch this tenuous analogy: we are now in the gold rush, but along with the gold rush you also need good weather and fertile land in order for the Wild West to turn into Sunny California.
Those passionate about the emerging world of cryptocurrencies and decentralized applications need to do a better job in bringing the rest of us plebs along. Otherwise, the gold rush will be over soon and all that will be left is a barren wilderness of abandoned protocols, orphaned DAOs, and blind oracles.
I am hopeful though. The infrastructure of Web 3.0 is still under construction. I hope strong, secure, and performant platforms emerge from the current Cambrian explosion of web technology. I am inspired by the likes of Chris Dixon, Balaji Srinivasan, and others who are bringing Web 3.0 concepts to wider audiences. But will it translate into wider developer adoption and mindshare? Time will tell.
I bought my first NFT today – I am the proud owner of rushiluhar.eth. It was an interesting experience. Quite similar, in some ways, to creating my first website almost twenty years ago.
Some observations:
1. You need to know what you are doing 🤔. The world of Web 3.0 is confusing and the UX .. leaves a lot to be desired. I used the most popular wallet – Metamask and bought rushiluhar.eth from ens.domains. None of these applications are for the faint hearted.
2. You need to be patient ⏳. I wanted to use the domain to point to my newly created Ethereum wallet address. This involved two separate steps. First buying the NFT (yes, each eth domain address is a NFT), and then another step to link the domain to my ETH wallet. Each step involves a transaction, and each transaction takes at least a minute to complete. And given the costs involved (see below), the lack of feedback or clarity is .. perplexing.
3. You need to be rich 🤑. ENS is run as a non profit, but you have to pay transaction fees. Which are crazy high, and change all the time. Buying a domain (like rushiluhar.eth) costs 0.001 ETH + the number of years you want to register the domain. So for 5 years, it costs 0.006 ETH – roughly $25 today. Not bad! *But* – the gas fees were (quoted at most) 0.043 ETH – almost $200! Making it my primary ENS domain involved another ~$85 in transaction fees. Ouch.
4. You need to be an exhibitionist 😬. The blockchain is public! Every single transaction is visible. If you want to laugh at me paying exorbitant gas fees for buying a worthless vanity NFT, just hop on over to Etherscan and search for rushiluhar.eth.
5. You need to be slightly delusional 🤪. The poster child of Web 3.0 (Ethereum) claims to become the World Computer. *But* current transaction fees put doing anything interesting on it out of reach of 99.9% of the world’s population. Something does not compute..
Also feel free to send a couple of ETH my way, you know the address..
Some Notes
Domain – You can buy your very own eth domain at ENS Domains but you will need a wallet, some crypto and a basic understanding of how ENS works and why you should bother.
Wallet – Metamask has integrations with a bunch of different Web3.0 sites like OpenSea, Foundation, ens.domains, etc. Its the easiest way to setup a wallet, just don’t forget your password.
Crypto – I would suggest using a reputed exchange like Coinbase to buy or sell crypto and then transfer a small amount to your Metamask wallet.
Why bother – A brief explainer of what else you can do with an ENS domain.
If you are interested in why I decided to spend a good bit of money on a ENS domain (apart from bragging rights on LinkedIn..) , check out this thread by Balaji Srinivasan.
