I happened to see a video earlier, which was about an Internet conference in a certain year. Robin Li of Baidu mentioned that Baidu made a mistake by not seizing the opportunity of mobile Internet. Back then, they thought SMS was expensive, costing 0.1 yuan per message, so they didn’t believe mobile search would become popular and did not invest in the mobile sector. By the time they realized the trend, it was too late. Mobile search was not just about shrinking web pages.
Hearing this speech reminded me, wasn’t the 0.1 yuan SMS back then similar to the current $10 Ethereum transaction?
The expensive SMS protocol charged per message, discouraging widespread use. As a result, the cheaper TCP protocol for Internet usage, charged based on traffic rather than messages, led to the obsolescence of SMS.
Let’s make a simple analogy: what if Ethereum stopped charging per transaction and instead charged based on the transaction amount?
This would require a fundamental change in the basic operating logic of the blockchain. Without considering implementation details, under the premise of “charging based on transaction amount,” what would happen to the blockchain?
Charging based on transaction amount means, for example, setting a transfer fee of 1%, so a $100 transfer would incur a $1 fee. Transferring $100 at once or in 10 transactions of $10 each would cost the same fee. The biggest advantage of this is that it greatly favors the popularity of small transactions.
(Then the network transaction volume skyrockets, miners can’t handle such a massive volume, the network becomes congested, paralyzed, chaotic, leading to multiple forks…
The popularity of small transactions means Ethereum is no longer just a financial product but becomes true currency. Currency can better fulfill the role of value transfer, which was also the initial vision of Bitcoin.
In other words, the most fundamental factor limiting the expansion of cryptocurrencies is the blockchain network’s ability to process transactions, requiring high throughput and low fees.
Under the current technical framework, this is almost impossible. If Bitcoin is SMS, Ethereum is a service that uses SMS for information retrieval, the Lightning Network is like an SMS subscription package, DeFi provides SMS-based financial management capabilities, DAO is an SMS group, GameFi is using SMS to play Snake, ZK Rollups is the most secure encryption for SMS… Web 3.0 is the mobile era integrating various SMS services, and the Metaverse is a virtual world using SMS as IM.
Today’s blockchain is still centered around “SMS,” striving to expand SMS’s business capabilities. However, the truly revolutionary technology needed is the Internet.
Next, let’s consider the possibilities of causing a technological revolution.
First is the exponential growth in hardware performance. If network transmission performance is greatly improved, blockchain transaction speed will also see significant enhancement.
Secondly, there is breakthrough progress in consensus algorithms. If consensus algorithms require fewer interactions and less network bandwidth, transaction capabilities can also improve.
Finally, we await the arrival of the Lord to bring new hope to the earth.
For the current state of the blockchain industry, you can refer to this article, which is an interview record by BlockBeats at this year’s ETHDenver conference: Interviewing 75 ETHDenver Participants: What “Wealth Codes” Did They Find at the Conference? I didn’t read it thoroughly, but the gist is, there’s nothing too new, technological development faces resistance, and the industry is waiting for an explosion of applications.