The future of encrypted money, from speculative assets to the bottom of the Internet

Original title:Crystal is going mainstream-just not in the way you might think
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Encryption money is moving into the mainstream, but it may be in a completely different way than you think. It does not appear in bitcoin, or in Taifung or Solana, nor is it dominated by NFT art or memes, but is embedded in digital finance and the bottom of the Internet as a secure layer of communication between applications, like the shift from HTTP to HTTPS。

Today, stable currency transactions are approaching Visa and PayPal, Web3 are "hidden" into daily life, and the future Layer 1 will no longer be a "world computer" but a "world database" providing a credible source of shared data for millions of applications。

THIS ARTICLE GIVES YOU AN INSIGHT INTO THE LOGIC OF THIS SHIFT: WHY IS INTEROPERABILITY THE KEY? WHY WOULD BUSINESS MODELS BE RE-CONSTRUCTED BY THE INTEGRATION OF AI AND BLOCK CHAINS? AND WHY THE FUTURE WITHOUT FRICTION IS NOT A SINGLE GIANT CHAIN, BUT A GENERAL BASE。

The following is the original text:

 

Encryption money is going into the mainstream, but it may not be the way you think。

It's not like bitcoin, Ethera or Solana, it's not dominated by NFT art or memes, and is less likely to be EVM or SVM. The block chain will quietly integrate into the network and become a secure layer of communication between applications, just like the shift from HTTP to HTTPS. The impact will be far-reaching, but the experience will hardly change for users and developers. This shift is already under way。

Stabilized currency, which is essentially the balance of the French currency on the block chain, currently handles approximately $9 trillion in adjusted trade volume per year, not unlike Visa and PayPal. The stability currency is not fundamentally different from the PayPal dollar; the difference is that the block chain provides a safer and more interoperability transmission layer. After more than a decade, ETH has still not been widely used as a currency and is easily replaced by a stable currency. The value of ETH derives from the cash flow generated by demand for ETA space and pledge incentives. On Hyperliquid, the assets with the highest turnover are the syntheses of traditional stocks and indices, not the encrypted original tokens。

The main reason for the existing financial network integration block chains as a secure layer of communication is interoperability. Today, a PayPal user cannot easily pay a LINE Pay user. If PayPal and LINE Pay run as chains like Base and Arbitrum, marketers such as Across, Relay, Eco or deBridge can prompt these transfers. PayPal users do not need to own the LINE account, nor does the LINE user need to own the PayPal account. The block chain allows for interoperability and unauthorized integration between such applications。

The recent talk about Monad as the next leading EVM ecology shows that the encryption industry still holds out on outdated thinking patterns. Monad has well-designed consensus systems and robust performances, but these are no longer unique. Quick endism is now a basic requirement. The idea of large-scale migration by developers and locking them in a new single ecosystem is not supported by the experience of the past decade. EVM applications are very easy to move between chains, and the wider Internet will not be re-structured in a single virtual machine。

To centralize the future role of Layer 1: World databases, not world computers

Or in encryption terms: the base layer of the Layer 2 chain。

Modern digital applications are essentially modular. There are millions of Web and mobile applications worldwide, each using its own development framework, programming language and server architecture, and maintaining an orderly list of transactions defining its status。

in terms of encryption, each application is already an application chain (app-chain). the problem is that these application chains do not have a secure, shared and credible source. query applications require trust in centralized servers that may fail or be attacked. the eta initially tried to solve the problem through the world computer model: in the model, each application was a smart contract in a single virtual machine, the certifier re-examining every transaction, calculating the entire global state and running consensus agreements. the situation is updated approximately every 15 minutes, at which point the transaction is considered confirmed。

This approach has two main problems: it cannot be expanded and it cannot be customized enough for real applications. The key understanding is that applications should not operate in a single global virtual machine, but should continue to operate independently, using their own servers and structures, while posting their orderly transactions to the decentralised Layer 1 database. Layer 2 client can read the orderly log and independently calculate the application status。

The new model is both scalable and flexible, and supports large platforms such as PayPal, Zelle, Payable Treasure, Robinhod, Fidelity or Coinbase, with only modest adjustments to their infrastructure. These applications need not rewrite EVM or SVM, but simply post transactions to a shared, secure database. If privacy is important, they can publish encrypted transactions and distribute decryption keys to a specific client。

Bottom principles: how to expand the world database

Expanding the world database is much easier than expanding the world's computers. The world ' s computers require that certifiers download, validate and execute every transaction generated by each application around the world, which is costly to calculate and bandwidth, and the bottleneck is that each certifier must fully implement the global state conversion function。

In the world database, a certifier needs only to ensure that the data are available, that the order of blocks is consistent and that once finality is achieved, the order is irreversible. They need not implement any application logic but simply store and disseminate data in a manner that ensures that honest nodes can rebuild complete data sets. Therefore, the certifying officer does not even have to receive a complete copy of each trade block。

Erasure Coding made this possible. For example, assuming that a 1MB block is divided into 10 copies by decoded distribution to 10 certifiers, each certifier receives about one tenth of the data, but any seven certifiers can combine to rebuild the whole block. This means that the number of certifiers can also increase as applications increase, while the data load of each certifier remains constant. Ten applications generate 1MB blocks, 100 certifiers, each processing only about 10KB data; 100 applications and 1,000 certifiers still process the same amount of data。

The certifiers still need to operate the consensus agreement, but it is much easier to agree on a block Hashi sequence than on a global implementation outcome. As a result, the capacity of the World Database can be expanded with the number of certifiers and applications, without overloading any certifier for global implementation。

Inter-chain interoperability of shared world databases

This architecture poses a new problem: interoperability between the Layer 2 chain. Applications in the same virtual machine synchronized communications, while applications on different L2s could not. ERC20, for example, if I have USDC in the Ether House, and you have JPYC, I can exchange USDC for JPYC in a single transaction and send it to you because USDC, JPYC and Uniswap contracts are coordinated in the same virtual machine。

If PayPal,LINE and Uniswap operate as separate Layer 2 chains, we need a secure cross-chain communication method. To be paid to the LINE user from PayPal account, Uniswap (on its separate chain) needs to verify PayPal transactions, perform multiple conversions, initiate LINE transactions, validate them and send them back to PayPal. That's Layer 2 across the chain。

To complete the process safely in real time, two elements are required:

Target chains must have up-to-date Hashes, usually Melkle roots or similar fingerprints posted on the Layer 1 database。

The target chain must be able to verify the correctness of the message without having to re-execut the entire source chain. This can be achieved through simple certification or a credible implementation environment (TEE)。

Real-time cross-chain transactions require a Layer 1 that has a quick terminal character combined with real-time certification or TEE authentication。

Towards harmonization of liquidity and non-diffic finance

This brings us back to a more ambitious vision. Today, digital finance is fragmented by closed systems, forcing users and liquidity to concentrate on a few dominant platforms. This concentration limits innovation and prevents new financial applications from competing in a level playing field. We envisage a world in which all digital asset applications can interact safely and in real time by allowing mobility to flow freely across chains through shared base layers。

The Layer 2 paradigm allows any application to become a Web3 chain, and a high-speed Layer 1 that is only a world database, allows these chains to communicate in real time and to interact as naturally as a single-chain smart contract. This is the way in which finance is born without friction, not by a single giant block chain that tries to cover everything, but by a common base layer that achieves secure, real-time communication across the chain。