In cryptospace you will easily find projects where the creators took an idea and inserted a blockchain instead of a traditional database. Web3 is the same idea. But this idea is obviously really bad, blockchains are an extremely niche datastructure. They are write only and established by consensus. Most databases shouldn't have these properties and forcing them in will lead into a giant mess.
Very few applications are bottlenecked by the efficiency of their data structure. Computing is filled with examples where we make significant performance tradeoffs to achieve other goals. E.g. software applications are orders of magnitude less efficient than dedicated hardware, yet we accept that tradeoff because software is far more flexible and faster to develop.
Similarly decentralized blockchains may be orders of magnitude less efficient than centralized databases, but for many applications that simply doesn't matter. The most scalable chains cost $0.0001 per transaction and can process tens of thousands transactions per second. Yes, a very optimized database may only cost $0.00000001 per transaction and can process millions of TPS. But the fact is none of this matters to your typical CRUD app.
What you do get for that tradeoff is much better guarantees around durability and reliability, observability, transparency, censorship resistance, decentralization, and a much more credible commitment to the users that the app will not stop operating, delete their data, or change its behavior in unexpected ways.
That doesn't mean the tradeoff is always worth it. The most performance critical systems will still probably run in centralized databases, just as the most performance critical applications run on custom ASICs instead of software. (Even then, we'd probably still expect databases to commit frequently commit their Merkle root to decentralized blockchains for trust, transparency, trust, auditability)
But we know that blockchain technology continues to improve at exponential Moore-like rates (in the past ten years, blockchain capacity has doubled about every 24 months). We'd therefore expect the performance tradeoffs vis-a-vis centralized databases to become increasingly de minims, whereas the positive characteristics of decentralized chains should only improve as the general tooling and technology gets better.
The applications where a blockchain is more useful than a traditional database have yet to be found. Money might be one such thing, but the Etherium/Bitcoin implementation is pretty bad.
The etherium blockchain also is much more than a "block chain". But it is still very much a solution in search of a usecase.
Digital money is the only area where a blockchain is a sensible choice from a technical point of view, that I know of. Although I am entirely unconvinced that bitcoin or etherium actually are even close to a viable interpretation of digital money. Say what you want about paypal, it isn't distributing my payment details publically.
Feel free to do some research if you have an open mind: Gnosis Safe: https://gnosis-safe.io/ Uniswap: https://app.uniswap.org/ Lens: https://www.lens.xyz/ Lit: https://litprotocol.com/ GMX: https://gmx.io/#/ Filecoin: https://filecoin.io/ Arweave: https://www.arweave.org/ Aave: https://aave.com/ USDC: https://www.circle.com/en/usdc
There's over $100B in USD backed currency alone on the Ethereum blockchain. It's programmable, liquid, exchangeble 24/7, interacts with thousands of smart contracts, and increasingly will be used for day to day commerce in addition to financial investment applications.
You are pseudo-anonymous on Ethereum. It's free to spin up new accounts and you can always fund them from a centralized exchange if you want Paypal-like privacy. Even then, there are solutions in the works for privacy:
Cheers.
I have an open mind about this area and a technical background. I really struggle to understand what any of this means and what I can use it for. My experience with cryptocurrency (paying for things) has been challenging. As the whole ecosystem is very fragmented it's hard to know what to explore.
It's fairly cutting edge cryptography. It is very fragmented as the industry is rapidly evolving. If I may recommend, a good article on zk Snarks from Vitalik: https://vitalik.eth.limo/general/2021/01/26/snarks.html
ZK proofs allow you to prove you know the answer to something without revealing the answer itself. You may not need to know how these things work at a low level. If you're interested, feel free to dig into zk proofs and the cryptography behind them. The subject is quite deep and rapidly evolving. Ultimately, the important thing to know at a high level is that you can post a zk proof with just a few bytes of data, and that zk proofs, while computationally expensive to generate, are computationally cheap to verify. So they are being used as a blockchain scaling technology, since data storage is expensive on blockchains.
If you're just interested in crypto as a user, I would generally recommend getting a Metamask wallet and interacting with some applications like Uniswap, Aave, or OpenSea.
And all of these either shouldn't exist or can be done better without a blockchain.
It is a solution without a problem.
What actual problem does a blockchain solve?
Blockchain is just a useful primitive to build stuff on top of it. As an engineer, I would like to embrace it, NFTs notwithstanding.
Besides, I even said that money is perhaps (definitely not BTC or Eth though) the one area where a blockchain actually solves a problem which might exist.
What else is there? NFTs are a truly stupid idea.
When will the crypto community finally quit with “it’s still early”?
Bitcoin is 13 years old. Ethereum is seven years old. Tens if not hundreds of billions of dollars have been invested in the ecosystem.
Please look at block explorers across L1s, L2s, and side chains for daily transactions, unique addresses, etc.
User adoption is abysmal and that says it all.
I was really excited about cryptocurrencies and blockchain until I woke up one day and realized a decade has gone by and outside of gambling on crypto exchanges and people who make it their identity the entire thing could disappear tomorrow and literally 99% of the population wouldn’t know the difference.
(Not to say that blockchains will have a huge success, but it's also not like progress hasn't been happening, haven't they managed to work out viable proof of stake recently?)
The growth of the web also depended on laying many millions of miles of fiber that required everything from digging up entire countries to dispatching ships to cross the world’s oceans. Millions more phone lines, ISP modem banks in almost every phone central office in the country, etc. A truly monumental and expensive effort of humanity.
In 2015 68% of the US population owned a smartphone. 85.5% of US households had the internet. Data is cheap, reliable, fast, and plentiful. Billions of users are interacting on social media platforms to enable communication and spread ideas across the globe more quickly than ever before.
In 2015 these billions of people could catch a random Tweet, news story, etc and be counted as an Ethereum user in minutes for free or close to it.
See the difference?
Steady growth of 50K-150K addresses per day. We're up to 210M addresses on ETH.
Sorry to report we haven't hit the tail end plateau of S-curve adoption yet.
Here's another chart:
https://etherscan.io/chart/active-address
All time high is 1m addresses actually used in any 24 hour period, which is a significant outlier. The average is closer to 400k-500k.
And another:
1.7m ATH daily transactions with the average being around 1m. I'm not exactly a statistician but a simple breakdown could be 500k people doing two transactions per day. Factoring in adoption is likely heavily weighted towards individual users (in the DAU sense) transacting with multiple addresses I think it's safe to assume the mapping between active addresses and users is some fraction - 1/2, 1/3, 1/4, etc.
Being conservative and favoring Ethereum in this 250k DAUs for total on-chain activity encompassing all activity across the entire platform.
You can look at cheap and "high" traffic sidechains, L2s, etc and pretty quickly determine that the number of DAUs across the entire ecosystem is in the low single digit millions at best. To be really fair let's say it's 10m - that's .02% of internet users daily.
Even if we use your total addresses and assume each address is a user 210m users across the 5b people on the internet represents an adoption rate of 4.2% of internet users ever transacting with the network across the seven years of existence.
In my original comment I said 99% of internet users wouldn't notice if it all disappeared. Looking at the numbers I think this was charitable.
So yeah, abysmal.
I'm crying too :-)