Daily Crypto, Finance, and Tech News Summary – August 14, 2023

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Welcome, and thank you for being part of the MyZucoins community! Let’s get into an interesting piece of crypto, finance or tech news to stay ahead.

Three-way rope pulling competition

Industry Still Isn’t Close to Solving the Blockchain Trilemma: “Would Be A Huge Breakthrough”

The world of blockchain has a big, deep challenge. It’s like a puzzle with three pieces that don’t quite fit together.

These pieces are scalability (how big it can get), security (how safe it is), and decentralization (how it spreads out control). This puzzle is known as the ‘blockchain trilemma’, and everyone is trying to solve it.

Offchain Labs, a company led by A.J. Warner, is focusing on this puzzle, amongst many in the industry. They are trying to make Ethereum, a popular blockchain, work better with a tool called Arbitrum.

This tool bundles up lots of transactions into one. This happens off the blockchain and on their own platform. Then eventually, the combined end result gets put back on the Ethereum blockchain, making things faster.

In between these two steps, you’re trusting that the third-party rollup product, Arbitum, handles the transaction for you until it gets back into Ethereum’s base layer-1 blockchain.

So far, this approach has $5.68 billion of value moving around and seven transactions happening every second. But even though that sounds like a lot, it’s still nowhere near as fast as big payment companies like Mastercard or Visa—they do 1,000s per second.

Arbitrum has promoted ‘permissionless validation’. This means that anyone can check if a transaction is right or wrong, kind of like a teacher checking homework. This makes the system more trustworthy because you don’t have to rely on just one person to say if something is right or wrong. This is a big step in the right direction, but solving the whole puzzle is still a long way off.

Warner believes that the real breakthrough will come when someone finds a way to make all three pieces of the puzzle fit together in a way that also excites lots of developers. Until then, the chase to solve the blockchain trilemma continues. Read more here.

Charting A Left-Field Path In The Crypto Space

One of the key challenges identified in the blockchain industry is the trilemma of scalability, security, and decentralization.

Zucoins, with its underlying Splitchain network, has already made significant strides in addressing these issues.

The Splitchain network operates on a truth-based approach rather than a consensus-based one, effectively eliminating the risk of a 51% attack.

The concept of permissionless validation, as highlighted in the case of Offchain Labs’ Arbitrum, resonates with Zucoins’ truth-based network. In the Splitchain network, as long as a node with a different source of truth exists and is accessible, the network remains reliable.

This is akin to the idea of permissionless validation, where any user can challenge the validity of a transaction, thereby promoting transparency and trust within the network. Except, with Splitchain, this occurs on the fundamental core of the system, not as a layer-2 add-on to the system. This makes it easier and more consistent for third-party developers to work with, as it’s part of the standard system.

Splitchain’s unique design enhances transactional security—one piece of the trilemma puzzle, without necessarily compromising on scalability or decentralization, provided other pieces are architected just right.

Moreover, Splitchain’s two-way transaction feature enables the ability for two-factor authentication (2FA), adding an additional layer of security, ensuring that transactions are not only swift but also go to the right person, otherwise they expire shortly afterward.

Speed and efficiency are keys in the race to solve the blockchain trilemma. Zucoin’s underlying Splitchain network is designed from the ground up to be efficient.

By caching the results produced by transacting peers, the network eliminates the need for competitive mining or staking validator pools, thus improving transaction speed.

While the Splitchain network and Zucoin have made tons of progress in addressing the trilemma, the challenge remains substantial and ever-evolving. The Zucoins project team is continuing to improve the Splitchain protocol in order to reach a suitable endpoint for the next stage of its decentralization process.

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All the best,
Peter & Rob