A Modular Blockchain World - Nick Dodson

and command f1 on a macbook with a touch bar uh okay displays okay i think that should do it yeah there we go great great okay awesome okay can you guys uh this is good that's good all right uh awesome well thanks for having me eat denver and my name is nick and i'll be presenting um a presentation on modular blockchains and particularly where we're headed with them and also you know some challenges that i think we're facing and also some things we're doing horribly wrong currently and how you know the modular blockchain system will affect layer 2 particularly and kind of your conception of layer 2. so in our current kind of state of blockchains we have a lot of monolithic blockchains so i don't know like raise of hand in the room how many of you heard of this modular blockchain idea and also monolithic blockchains yes okay kind of all right so essentially there's a movement in the blockchain space right now particularly with ethereum as well to move us closer to a reality of what we call modular blockchains but before you can understand that you have to understand what we call monolithic layer one block chains so monolithic layer one blockchain bundles data availability settlement and execution together and because it tightly bundles these things you can't specialize and thus is not scalable and so in the monolithic model that we currently see now with chains you know things like uh well i mean ethereum layer one currently as it stands is monolithic but it's moving towards a different reality but many other blair ones are essentially in the monolithic model and as the previous presenter was bringing up this is you know constraining a lot of factors particularly on bandwidth so modular blockchains they separate execution from consensus and data availability and when you do this each layer can specialize and be and be more scalable and so it's the specialization that you get from breaking up these pieces that allows you to produce far more scale that is secure and verifiable and doesn't affect decentralization so this is particularly the key for how we head into ethereum 2.0 and also other data availability layers that are going to come online and the particular direction is a modular one where you can expect an extremely high data availability throughput through things like sharding and you know we expect even maybe as soon as next year that we'll be able to have you know tools and the ability to leverage this kind of data and so this brings me to my next point which is particularly particularly key and something that i think a lot of people should focus on um and that is that most layer twos as you can see them right now have a huge problem and it's right in front of you and it sort of is something that i think people don't realize when you're talking about layer two and it's one particular thing and you can see it right on the screen which is that there's a huge fixation on layer twos to optimize for bandwidth and so this fixation is very very heavy there's a lot of teams that are focusing on trying to get the literal bite size down of transactions with lair twos on ethereum but this is really dumb so this is not a good idea and this is a huge waste of engineering resources for the community and particularly it is really dumb because bandwidth is a monolithic issue not a modular issue and so the constraining bottleneck and the modular paradigm is particularly not bandwidth and if you focus all of your engineering efforts on producing transactions that are 10 bytes or like four bytes then you're basically building a system that a we don't need and b is particularly not useful and is also just a waste of engineering resource in the modular blockchain setting it's not a problem again because the layers are broken up so a modular block chain can specialize in things like high data availability and when you can do that it opens up the amount of data you have such that that is absolutely not going to be a constraining factor for a very very long time at least probably for the next two to three years at best so the bigger problem in the space is that not only are we fixating uh layer twos you know particularly some of the current uh you know high profile layer twos fixating on things like compression where they shouldn't be but we're thinking about modular block chains and layer twos completely wrong as complete nonsense in the sense of how this is and it's almost pass a in in many senses given what will happen and what is about to happen layer twos is a concept only exists from monolithic blockchains they do not exist for modular blockchains there's no concept of a layer 2 in a modular blockchain and this is something that will go out of date very very quickly as we step into a modular blockchain setting and modular blockchains will eviscerate the monolithic models hands down because they can separate these things and retain decentralization and security so we have a massive incorrect focus in the layer 2 space it's kind of interesting to say the least but you see a considerable amount of fixation on bandwidth when layer 2s don't and shouldn't be fixated on this thing and also they're just optimizing for the wrong things in general so they're optimizing for other things as well that don't make a lot of sense to optimize for particularly and the real bottlenecks are something else and something that highlights this very clearly is a conversation from from peter who's the head of the go ethereum team and he was talking with avalanche uh on twitter an avalanche uh you know because this is an ethereum conference we can we can riff a little bit uh but you know avalanche problematic to say the least was essentially saying well if we can just switch out the consensus algorithm uh we can produce enormous amounts of scale uh and uh peter was like no you can't because consensus is not a bottlenecking factor it's actually something else which is the evm and state growth and particularly the entire processing model of the ethereum system and so this is a very clear and known thing we are tremendously bottlenecked by these processing systems and if you just open up the bandwidth even slightly on evm based systems and it doesn't matter whether it's a roll-up or a layer one you're going to be heavily heavily constrained by these processing factors and so the solution to these constraints is to get your mind away from layer twos and into something else which is called modular execution layers modular execution layers are different from layer twos in the sense that they are a verifiable execution system which can be its own layer 1 layer 2 layer 3 side chain state channel etc the key thing here is verifiable and it's what makes it different from just another layer 1 or you know any particular system a ver a modular execution layer encompasses the idea of a layer 2 but it's a little more than that it's a verifiable execution system and verifiable meaning fraud provable and also focused on something that i think as a system isn't targeted towards a layer two uh for a monolithic blockchain but is actually optimized and this is the key thing for modular blockchains and so you