Tag: challenges
Cryptoeconomics: Technological Challenges
A famous technological issue of the current state of blockchain technology is the so-called blockchain trilemma, firstly introduced by Vitalik Buterin. The trilemma states that creating a scalable, secure, and decentralized blockchain is hard — but not impossible. In fact, many of the current blockchain systems are inferior in one of these points while at least trying to optimize the two other dimensions.
For example, while Solana has 1.764 active validator nodes and relatively high hardware requirements to run a validator node, Ethereum has currently 2.201 active execution clients and 323.264 consensus clients, while there are developments to run the full Ethereum node setup on a small single-board computer like a Raspberry Pi. This shows that Solana performs better — which is the case regarding the transaction throughput — than Ethereum but is also much more centralized regarding the number of validators in the network.
Polkadot and Cosmos are also trying to overcome the blockchain trilemma. Instead of having only one generic blockchain for every application scenario, they aim to create an application-specific blockchain that can focus on their specific application scenario.
Ethereum´s Approach
Ethereum ́s scalability issue is quite noticeable in the high transaction fees required to perform any invoke actions on the Ethereum mainnet, especially during high network usage. Currently, there are two significant concepts for scaling Ethereum in the future: on-chain scaling and off-chain scaling. While the first option requires changes to the Ethereum protocol, the second one is primarily independent of the core protocol.
Sharding is the foremost approach for on-chain scaling. The concept of sharding is borrowed from a database design concept, where the data of the database is split horizontally and then stored on different physical machines, depending on which user group needs to access the specific data more frequently. That initially allows having small databases for specific user groups while still having a unique data model. The advantages are higher availability, faster queries, more bandwidth, and a higher workload made possible due to the parallelization of queries. Applying this design pattern to the Ethereum blockchain could lead to similar advantages and is the current approach for the on-chain scaling. The roadmap also includes an iterative proceeding where, as of 30/05/2022, two proposals are discussed in the Ethereum community.
The options for off-chain scaling are a bit brighter. Currently, the solutions with the highest user adaption are rollups and sidechains. The Polygon PoS Chain is one of the most used sidechains of Ethereum. The Indian-based company behind the Polygon PoS Chain, namely Polygon Technology, has the value proposition to support the Ethereum blockchain’s scaling opportunities in the future with various solutions. Through its current design, the Polygon PoS Chain does not inherit the security of Ethereum itself because its own set of validator nodes is validating the network’s transactions. That leads to a more centralized EVM-compatible blockchain, which is much cheaper to use in terms of transaction fees.
On the other hand, rollups inherit the security and decentralization aspects of the Ethereum block- chain. The most popular general-purpose rollup solutions as of 30/05/2022 based on the TVL are Arbitrum and Optimism. Rollups on Ethereum can also have a specific purpose, e.g., dYdX is a rollup solution, especially for the purpose of being an exchange. While Arbitrum and Optimism are so-called optimistic rollup solutions, dYdX is a zero-knowledge rollup. Without going too much into detail about the specific implementation of either of the rollup solutions, which also are referred to as layer two solutions, both variants work — as the name suggested — in that way that a batch of transactions is rolled up — or in other words — committed to the Ethereum mainnet from an external resource.
An optimistic rollup solution works as it assumes transactions made by an external sequencer are valid by default and only runs a computation proof in the event of fraud. Therefore, these solutions need to implement a system that can submit a transaction in the same state used in the original rollup transaction to the Ethereum mainnet and prove its correctness.
A zero-knowledge proof runs an off-chain computation for a transaction batch leveraging a crypto- graphic proof called zk-snark. This proof can then be easily verified by the Ethereum blockchain, proving the transaction validity state. A zk-snark proof is a mathematically complex calculation; therefore, as of 30/05/2022, there are no generic-usage zk-rollup solutions in a production-ready state.
Conclusion
There are many approaches for solving the blockchain trilemma. Currently, there is no clear winner whether it will be the approach of Polkadot and Cosmos with different application blockchains or the approach of ethereum with additional L2 protocols to ensure better scalability. In the end, the ecosystem that can be best adapted and used by people will win.
If you like the ideas and theories examined here, feel free to subscribe and stay tuned for more stuff like that! Cheers, Flo.
Twitter: https://twitter.com/floberlin_eth
LinkedIn: https://www.linkedin.com/in/florian-lueffe-6a87969a/
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Cryptoeconomics: Technological Challenges was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
Elon Musk Challenges Twitter’s CEO to Public Debate on Fake Accounts and Spam Bots
How to Evaluate Non-Fungible Token Opportunities and Challenges
The non-fungible token (NFT) market is booming. NFTs are unique digital assets that cannot be replicated, making them attractive to collectors and investors. However, as with any new investment opportunity, there are risks associated with NFTs that must be considered before diving in. In this blog post, we will discuss how to evaluate NFT opportunities and challenges so that you can make informed investment decisions.
Evaluating Non-Fungible Token Opportunities.
Understanding Non-Fungible Tokens
A non-fungible token (NFT) is a type of digital asset that is unique and, therefore, not interchangeable. NFTs are typically stored on a blockchain, which provides immutability and scarcity. The most well-known examples of NFTs are Cryptokitties and Decentraland.
Assessing the Value Proposition of a Non-Fungible Token
When evaluating the value proposition of an NFT, it is crucial to consider the following factors:
1. Use case: Does the NFT have a real-world use case? Is there a demand for the NFT?
2. Platform: Which blockchain is the NFT built on? Is the blockchain reputable and well-established?
3. Team: Who is behind the project? Do they have experience in blockchain or the gaming industry?
4. Community: Is there a strong community around the project? Are people actively using and trading NFTs?
5. Liquidity: Can you quickly buy or sell the NFTs? Are there enough buyers and sellers in the market?
Understanding the Challenges Associated with Non-Fungible Tokens.
Liquidity
One challenge associated with non-fungible tokens is liquidity. Finding buyers for your tokens can be difficult, especially if you’re trying to sell large quantities. This can make it hard to cash out your investment and realize a profit. There are a few ways to mitigate this risk, including diversifying your portfolio and being patient.
Fragmentation
Another challenge associated with non-fungible tokens is fragmentation. Because there are so many types of tokens, finding buyers for specific types of tokens can be challenging. This problem is compounded by the fact that some exchanges only list a limited number of token types. To mitigate this risk, you should research the market before investing in any type of token.
Scam Risk
Finally, non-fungible tokens also carry a higher risk of scams. Because the market is still relatively new and unregulated, many scams and fraudulent projects are masquerading as legitimate investment opportunities. To protect yourself from these scams, you should always do your research before investing in any project or token sale.
How to Mitigate the Challenges When Evaluating Non-Fungible Token Opportunities.
Diversify your portfolio
When evaluating non-fungible token opportunities, it is important to diversify your portfolio to mitigate the challenges associated with these investments. By investing in a variety of different tokens, you can reduce your risk of loss if one particular token does not perform as expected.
Do your research
It is also crucial that you do your research before investing in any non-fungible token. This includes reading about the team behind the project, assessing the technology, and understanding tokenomics. Many resources are available online to help you with this research, so take advantage of them.
Be Patient
Finally, it is important to be patient when investing in non-fungible tokens. These investments can take time to mature, and it may be some time before you see any return on your investment. However, suppose you are patient and hold onto your tokens for the long term. In that case, you may be rewarded handsomely for your patience.
Conclusion
The explosive growth of the non-fungible token market has led to a proliferation of new opportunities for investors. However, it is important to carefully evaluate these opportunities to avoid potential pitfalls.
When assessing a non-fungible token opportunity, it is important to understand the underlying technology and value proposition. Additionally, potential investors should be aware of the challenges associated with non-fungible tokens, including liquidity, fragmentation and scam risk.
Fortunately, there are ways to mitigate these risks when evaluating non-fungible token opportunities. You can minimise potential losses by diversifying your portfolio and doing your own research. Moreover, patience is often key when investing in volatile markets like the non-fungible token market.
Remember to do your due diligence and exercise caution if considering investing in a non-fungible token. With careful planning and a bit of luck, you could reap substantial rewards from this burgeoning market.
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How to Evaluate Non-Fungible Token Opportunities and Challenges was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
Elon Musk challenges Twitter CEO to a ‘public debate’ on fake accounts
A mere two days after accusing the company of fraud, Elon Musk has challenged Twitter CEO Parag Agrawal to a public debate about the percentage of bots on its platform. “Let him prove to the public that Twitter has <5% fake or spam daily users,” Musk said in a tweet spotted by Reuters.
The Tesla and SpaceX executive issued the challenge after responding to a thread in support of his legal case against the company. “If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms,” he said.
I hereby challenge @paraga to a public debate about the Twitter bot percentage.
Let him prove to the public that Twitter has <5% fake or spam daily users!
— Elon Musk (@elonmusk) August 6, 2022
Musk then began polling his followers, asking them whether they believe fake accounts make up less than five percent of Twitter’s daily user base. The two options are “Yes” and “Lmaooo no.” With 66.6 percent of vote as of the writing of this article, the latter is ahead at the moment. Voting ends on Sunday.
The stunt is unlikely to prompt a response from Twitter. The company’s trial against Musk will start on October 17th and could finish in a matter of days. In the complaint it filed this week, Musk’s legal team said a Botometer analysis found a much higher number of fake accounts than the less than five percent claimed by Twitter. The company quickly shot back, calling Musk’s statements “factually inaccurate, legally insufficient and commercially irrelevant.”
Elon Musk challenges Twitter CEO to a ‘public debate’ about bots
Maybe Elon Musk doesn’t want a court battle with Twitter? After having his lawyers spin up a 165-page argument about why he no longer wants to go through with his $44 billion deal to buy the platform, Musk suggested hashing things out in public — perhaps before a jury of the Tesla fans, Dogecoin hodlers, and potential Mars colonizers among his Twitter followers — to get to the bottom of Twitter’s so-called bot issue.
“I hereby challenge @paraga to a public debate about the Twitter bot percentage,” Musk proclaims to all 102 million members of his forum. “Let him prove to the public that Twitter has <5% fake or spam daily users!”
I hereby challenge @paraga to a public debate about the Twitter bot percentage.
Let him prove to the public…
How Bear and Breakfast Opened for Business Despite Multiple Challenges
US Senator Challenges Apple and Google about Fraudulent Crypto Apps – Blockchain.News
U.S. Senator. Sherrod Brown (D-Ohio), the chairman of the Senate Banking Committee, is requesting Apple and Google to clarify how they prevent fraudulent cryptocurrency apps on the Apple Store and Google Play Store.On Wednesday, July 27, the U.S. lawmaker sent two letters addressed to Apple CEO Tim Cook and Google CEO Sundar Pichai. Senator Brown…
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