Blockchain technology, if optimised and wielded to its full potential, promises to enact sweeping and radical changes across all industries: the insurance industry will see a significant drop in fraudulent claims and faster payouts; the logistics industry will be able to drastically reduce shipping times as well as paperwork; and remitting money to your folks back home will get a whole lot easier and safer.
It’s a tall order to fulfill, but thankfully, there is a sprawling global network of developers, who work tirelessly together to push this nascent technology to uncharted frontiers.
One of the more prominent and outstanding developers in this community is Joseph Lubin, who is most well known for being part of the trio who co-founded the decentralised platform, Ethereum, three years ago. Lubin is also Co-Founder of Ethereum blockchain application services company ConsenSys.
“Ethereum is at a stage where it’s very usable but with low transaction volumes. There are many people using it in interesting ways but the technology is still very foundational or early stage,” said Lubin, who was in Singapore to speak at the Singapore Week of Innovation & TeCHnology (SWITCH) – a deep tech-focused conference organised by the National Research Foundation Singapore (NRF) and Enterprise Singapore (ESG).
What Lubin was referring to is the building blocks of Ethereum. This is the first implementation of the technology. Developers build new standards on top of it such as fungible or non-fungible tokens, as well as other tools that govern the ecosystem.
Though blockchain is still considered a nascent technology — with almost no instances of any widespread mainstream usage to date (beyond its guarded community of enthusiasts, at least) – Ethereum has quickly risen to become of the most widely-used blockchain technology.
One of the key factors that propelled Ethereum into public consciousness was the rise of Initial Coin Offerings (ICOs), a form of fundraising tool that uses Ethereum’s digital token ETH, a form of speculative currency that can be bought and traded on a digital assets exchange.
But Ethereum is currently going through a rapid stage of development that would not only see its technology improved upon, but also its range of use cases expanded.
“We are moving into phase 2 of the tech where we have the base trust layer. We are building Layer 2 for scalability. These include state channels, sidechains, and Plasma. These allow game companies and digital exchanges to build their own blockchain systems and link it up to the [Ethereum] base layer,” he said.
State channels are a mechanism that allows for transactions to be conducted off the blockchain; sidechains allow tokens to be moved securely between two different blockchain systems. Plasma is a project that aims to ramp up the speed of Ethereum transactions.
“Layer 2 of Ethereum will enable hundreds of thousands of transactions per second [to be performed]. And then you can link it to Layer 1 [the foundational blocks] while keeping Layer 2 secure,” he said.
These technical jargons and descriptions will probably fly over the heads of most readers, but thankfully, Lubin was able to give a simple illustration.
“Say, for example, you have two crypto-based games with different digital assets. [With Layer 2], their assets can now be inserted into each other’s game or be moved into an exchange. So these two games are now able to recognise both assets. And if anything goes wrong with any of these Layer 2 blockchains, you can still pull the digital tokens into Layer 1, and that’s a huge breakthrough,” said Lubin.
Lubin said that work is being done to integrate a few blockchain systems into Ethereum [though he declined to name the projects] so that they can gain the same base security that Ethereum provides.
Bringing up complex terms and phrases such as “Proof of Stake” (mining by validating transactions) and “Sharding the Network” (a concept for scaling that is being debated because of fears that it may compromise decentralisation), Lubin spoke confidently of Ethereum’s future as a practical technology that will see widespread usage in the public arena.
It aims to facilitate the execution of legal contracts on the Ethereum blockchain together with using the OpenLaw protocol. Using smart contracts, automated dispute resolution, and blockchain-based identity management and arbitration systems, clients can be assured that all contracts will be legally enforced under the correct conditions and their private details will be safeguarded from any possible tampering.
Such a project, along with others that are being developed concurrently, is made possible because of Ethereum’s tightly-knit community.
“Ethereum has a really big ecosystem and its developers are all about building decentralised platforms; we have to constantly evolve and draw the best ideas from everywhere […] Ethereum is a warm collaborative community. We meet at events in different cities all year long, such as Burning Man (a festival in the US based on experimental art and other communal events). This is a community of software developers focused on building applications, as opposed to other communities that focus on just building money-based systems, for example,” said Lubin.
And of course, other community events that are also helping to spread the gospel of Ethereum include SWITCH.
“SWITCH is a great tech event […] this is where we identify new breakthroughs, have new avenues of bringing deep tech to market, and allowing it to contribute value to people’s lives. Blockchain is doing the same thing; it is lowering the barriers-to-entry for people to tech […] allowing it to rapidly make its way into society. The Singapore government is very good in bringing value to people in a very focused way,” said Lubin.
There is going to be an exponential growth for Ethereum applications, and it won’t even take years.
“Ethereum 2.0 probably comes out 18 months from now. We are going to see more blockchain systems gain heavy traction. We are going to see many decentralised protocols for bandwidth, storage and heavy computing and many other things. Ethereum is here to stay,” he concluded.
Disclosure: This article was produced by the e27 marketing team, in partnership with SWITCH 2018.
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