Blockchains Are Currently Platforms Of Huge Potential And Trade-Off Issues
8 December 2023
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.
Crypto continues to not only survive but grow, despite mainstream media's predictions of its demise after the 2022 FTX exchange crash, followed by numerous other popular crypto exchanges getting stung over the past year.
This was overwhelmingly due to poor business practices and failure to comply with increasing regulations, not with the underlying principles of the technology.
The value of crypto lies not just in its price, but also in its ability to attract developers to create quality products.
Blockchains are often seen as an ideological choice, but they are essentially platforms with unique benefits and drawbacks.
Developers decide to build on blockchains if the benefits outweigh the drawbacks for their specific product.
It's peculiar that recent market improvements have occurred without any new killer use cases.
Higher prices may encourage developers to reconsider blockchains, and a larger number may find the trade-offs acceptable for their projects.
Blockchains' success as platforms depends on developers' willingness to build products on them.
The more developers create superior products on blockchains, the more users will be attracted to them.
When choosing a platform, developers must weigh the benefits against the drawbacks.
Over time, as the infrastructure improves, the trade-off may favor blockchains for more use cases.
Blockchains offer several benefits, including decentralization, smart contracts, tokens, global exchange, ownership, governance, verification and transparency, permissionlessness (yes, it's a word), composability, immutability, security, and the ability to make provable commitments in software code.
However, blockchains currently have significant drawbacks, including slowness, higher costs, clunky user experience, limited privacy, regulatory uncertainty, key management difficulty, and stigmatization.
Despite these drawbacks, a small number of developers find that the benefits outweigh the costs because blockchains enable them to do things that they couldn't otherwise do.
Many products built on blockchains are financial – exchanges, NFTs, and payments—because these couldn't be built on traditional infrastructure in the same way.
As blockchains' capabilities expand, performance improves, and drawbacks get addressed, the number of things built on blockchains increases.
If crypto's infrastructure continues to improve, more developers will find that its benefits outweigh its drawbacks, leading to more on-chain development. Read more here.
Crypto needs more than a nice app design: It needs products that solve problems.
Speculation can destabilize markets, but productivity fosters growth and innovation.
How to decentralize a system? What is Splitchain's approach?
Centralized vs decentralized digital networks: Some key differences.
Cryptocurrency's evolution mirrors the early automobile era.
How Is Zucoin's SplitChain Targeting Traditional Blockchain Limitations?
"In the heart of difficulty lies opportunity." —Albert Einstein.
Despite numerous warnings of the impending doom of cryptocurrencies over the past year, they have done more than just hang on—they have flourished.
It's clear much of this doom and gloom narrative is driven by two main factors: Companies choosing to ignore regulations and institutions wanting to move into the space at a discounted price.
Crypto's durability is not only due to market volatility but also the inherent technology and the potential it brings with it.
The attractiveness of blockchain technology comes from its unique advantages such as decentralization, smart contracts, and transparency.
Another factor is portability.
Compare moving and storing crypto like Zucoin or Bitcoin by yourself vs other commodities.
While Bitcoin is still too complex for the average person to comfortably manage by themself (not using a crypto exchange to store your Bitcoin), managing your own gold bullion is even harder.
Taking crypto with you as you travel, is for example, as easy as having an app or a USB drive.
Imagine moving lots of of gold bars with you to different places—it's much more difficult to carry with you than crypto.
Of course, custodial services exist to manage this for you, both in the world of crypto and gold, via centralized exchanges.
However, the moment you do this you are putting your assets into someone else's hands.
The ability to far more easily scale a centralized service, instead of a decentralized one, is another reason why so many mostly centralized bolt-on solutions formed, known as "Layer 2's".
Layer 2's are much, much easier to scale as they don't directly fix the underlying issues.
They also risk destroying what made crypto special in the first place—autonomy, self-serve permissions, and decentralization.
It's why Zucoin spends a huge amount of time on improving decentralization and making its self-custodial wallet easy to manage by yourself.
For such systems to compete with providers that centrally pool together crypto assets, the self-custodial method has to be incredibly easy.
Over time, there will be huge centralized providers too, that will offer additional management services and features like insurance, at the expense of independence.
For many people, while being more restrictive, it will fill that demand.
Perhaps DAOs—Decentralized Autonomous Organizations will emerge as competitors in this area too.
Democratizing access to crypto by making things easier is one of the important factors that inspire developers to build superior products.
It reduces friction and make momentum easier to build up.
Zucoin's SplitChain network has focused on these advantages, offering a promising platform for developers.
Traditional blockchains are troubled by problems like high fee expenses, slow transactions, and a complicated user experience.
Built from scratch to address these problems, the SplitChain network ensures quick, cost-friendly transactions and a more seamless experience.
There's a ton of work happening to solve many frustrations software developers currently experience within the blockchain world—make sure you've subscribed to this newsletter to get the latest insights as they're ready.
Many blockchain-based products are limited in their capabilities due to the limitations of traditional blockchain infrastructure.
They have become enormous technical machines that need an army of maintainers to support them.
Zucoin's SplitChain network, with its flexibility and efficiency, could change this, paving the way for a broader spectrum of digital applications beyond just financial transactions.
Zucoin's continual development on scalability aligns with this trend, demonstrating its potential for future growth and innovation.
This is the future we are stepping into.
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All the best,
—Rob
MyZucoins
Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.