randomran01234

The author reasonably concluded that these solutions are early and effectively “beta software” but I think it would be wrong to say they are completely unproven. L2s are currently securing billions of dollars and the amount of block space they take up is on increasing rapidly.[1][2]

The unproven part is whether users will be satisfied enough with the security and censorship considerations of something like a ZK Rollup for it to scale to facilitate a significant part of the world’s economic activity. This is reasonable to question as we are only about 1 year into a range of this tech being heavily applied on mainnet.

https://l2beat.com/

https://dune.com/funnyking/L2-Gas-Consumption

Better by what metric? Ethereum settlements are nearly instant and global, involve no need for a private third party arbiter, and are built on permissionless and open source protocols. Some of the areas they fall short is often around throughput, energy externalities, and user privacy. As the article points out, there are engineering solutions and new cryptography being applied to all three of those problems.

Sorry, will avoid this type of comment next time.

The idea is that if you have more tokens, you will reap more reward in PoS. This is because you receive around 5% return on your stake, so if you set up multiple validators you will earn more per year.

Note that PoW works exactly like this too, except far worse due to economies of scale. Purchasing mining facilities in bulk will give you a much better deal than buying rigs as a home miner. Whereas in PoS, both the ultra-whale (1000 ETH) and mini-whale (32 ETH) are earning the same exact % return on their investment. The average user delegating in a staking pool is also earning fairly similar return to all validators (with some % of their return paid to validators for their services).

I do not think the claim that PoS is more centralizing or more “rich get richer” than PoW is necessarily true.

Did you read the article? No?

And it is fine to build systems with trusted parties on top of a permissionless network. The article cites USDC which does this, it is one of many applications users can choose to transact with. Attempting to bake reversibility into the protocol would lead to a tightly permissioned system with only a few trusted authorities.

A loose analogy might be the internet, which aims to be a decentralized global protocol that we can then build centralized systems on top of.

This same article mentions L2s which aim to bring these fees down to reasonable levels.

L2 like zkSync and Optimism are already very cheap and can likely continue to get cheaper.

https://l2fees.info/

ZK Rollups are definitely “on a blockchain” and exist as any other smart contract application, like USDC. What they move off-chain is the computation and data storage of a transaction, but verified zk proofs result in the same security guarantees as any other contract on the underlying L1.

This solves inter-bank transfers in EU but does not mean payments going out of, or into, the EU are solved.

Crypto takes a different approach: a single protocol that is shared across all countries.

The point of NFT is that it is a standards-compliant asset that is not upheld by a single authority. It achieves this by combining the following two ideas:

- The token and current state of its ownership is updated with transactions in a distributed ledger. Only the owner can transfer ownership to a new address.

- The media is stored on a peer-to-peer hosting system like IPFS, allowing anybody to replicate and host it.

The "standards-compliant" aspect of ERC-721 is also very important as it makes these assets composable across a whole ecosystem of independent platforms and sites. This allows you to buy a token from one source, and auction it off on another unrelated platform.

Eth can and often does drop without impacting USDC, DAI & others. The overall network and process of filling blocks continues just fine.

Some crypto currencies do shield payments using zero-knowledge proofs. Within public blockchains like Ethereum, there will eventually be more layer two rollups that can support privacy through zero-knowledge proofs. Polygon Nightfall is one:

https://polygon.technology/solutions/polygon-nightfall/