dom | icp@dominic_w
Crazy fact – 99.9% of people don’t understand what blockchains truly are.
But, when you understand, you can see a future that's insanely bright 🌞 that runs far beyond defi and meme coins. I'm going to explain in this tweet...
Three sections follow:-
1) The true nature of blockchain
2) The provision of near magical powers
3) The meaning of "blockchain singularity"
Stay with me if you want to undertand!
// The True Nature of Blockchain //
To begin, you must grok that a blockchain is what can better be technically described as a "stateful decentralized network."
If you're balking at getting your head around what sounds like hardcore technical term, don't panic – it's easy to understand, and the insight is well worth the amount of effort required.
To advance on a short journey to understanding, we will start by considering, for a brief moment, the simple Morse Code protocol, and then add some modifications.
As you may already know, Morse Code is a simple protocol for transmitting text over a link using a series of short and long pulses – audible beeps, flashes from a light, radio pulses, whatever...
In Morse Code, 'S' is audibly communicated as beep, beep, beep, and 'O' as beeeep, beeeep, beeep. This means we can transmit "SOS" over a link by going beep, beep, beep beeeep, beeeep, beeeep beep, beep, beep.
It's just a simple protocol that enables one party to send a stream of text – "data" – to another party.
The protocol was developed to send text over electrical telegraph systems sometime after 1820. There would be operators who understood the protocol, who could both send text, and also transcribe received text, which their equipment transformed into audible noises for them (i.e. the beeps they listened to).
It's a communication protocol that is "stateless." What that means is that messages are sent, and then the receiver does with them what they wish.
Of course, in a sense, the operators on the ends of the line (the "peers") are maintaining some kind of state in their heads. For example, the operator hearing that the Titanic was sinking, might process that information in their head, and then decide to send back a message asking how long they've got before the ship will go down – but the protocol itself does not define how to maintain state, which would involve specifying how received communications should be processed and maintained.
A similar situation exists with TCP/IP, the protocols that power the internet. When we connect to a remote person over Zoom, TCP/IP streams the video data over the network, and the Zoom app displays it. The people on the Zoom keep a state in their minds related to their interaction, which guides their conversation, but the internet is just streaming video data between them, and says nothing about what to do with the information contained.
Early decentralized networks running over the internet, such as the BitTorrent file sharing network, used protocols that began to introduce the concept of some kind of shared state – albeit, one that is distributed across the computers of individual network participants, which is stored at their discretion.
For example, the BitTorrent protocol makes it possible to get a listing of files stored on a peer's computer that they are sharing, and provides way for this knowledge to be propagated over its network.
Crucially, the files ("data") shared by peer computers ("nodes") do not impact how BitTorrent's network protocol works, any more than the video streamed by Zoom affects what Zoom's protocol will do in the future. It provides a simple means for one peer to discover and request the files another peer is sharing, and what it knows about files shared by other peers, allowing for propagation of this knowledge. It enables file sharing but is oblivious to the files being shared. The files are not part of a state the network protocol itself maintains.
Bitcoin rang in the changes as the first "stateful" decentralized network – something whose revolutionary nature well exceeds the concept of cryptocurrency.
Going back to two people communicating using Morse Code: imagine if that protocol was updated, so that each party had to keep a record of the text received from the other, and that new Morse Code protocol commands allowed each party to request the other send back sections of text they previously transmitted – and that correctly behaving participants had to fastidiously record received text in case they were asked for it.
Now we are moving towards a weakly "stateful" communications protocol involving just two peers. It's not decentralized since there are only two parties, and there's no way to know if text returned on request is correct (unless you kept a copy..).
Now, imagine if the protocol was made decentralized, and when a new party joined, they could request all the text that had been previously transmitted from all existing peers. Assuming peers regularly updated each other about the transmitted texts they had seen, this would allow a rough *shared* corpus of text to be stored by the network.
Whenever new text is transmitted, this would be shared amongst the peers in the network, and thus, future requests to return the corpus would include it. If the protocol requires that peers share texts they have seen, and the peers behave correctly, then we can say that the shared corpus (a "state") is being maintained by the network.
But there are two problems: 1) the corpus maintained by the peers is inconsistent, since they transmit messages, and see shared transmitted messaages, at different times, and 2) peers can lie, sharing texts that were never sent, causing the network's state to become corrupted. There is no "source of truth" that describes what the correct state maintained by network is.
We can make a few mild improvements without introducing a trusted intermediary – such as a server that might act dishonestly or go down – to maintain the corpus.
For example, when a peer is asked for the network state, the protocol rules could require they sort the text messages they have accumulated by the identity of the sender, the time they were sent, which will make the state returned by one peer look more similar to the state returned by another peer, but still will not make them consistent, because the peers see messages at different times. And there's no obvious way to deal with adversarial ("faulty") nodes that share messages that were never transmitted, which will corrupt the state.
This is where the fields of Byzantine Fault Tolerant protocols comes into play. These involves complex math and algorithms, but the good news is that you only need to know that math proofs have been created to validate they work – you don't need to understand their works.
These protocols can guarantee that if a sufficient portion of peers follow the protocol rules (are "correct"), then a completely consistent network state can be maintained, and moreover, that faulty peers that don't follow the protocol's rules cannot corrupt this state (here we assume that transmitted messages are now signed using cryptography to prevent forgeries, and are really talking about the construction of a *consistent* state that everyone can agree upon).
Such protocols have to address the network's participants seeing messages at the same time, which is unavoidable. They address this by creating a shared state that progresses through an agreed sequence of steps (or "state transitions").
Going back to Bitcoin, this is of course what we see in its sequence of blocks, which defines progressive updates to its UTXO set it uses to describe the various balances of bitcoin at different wallet addresses, and how it can be accessed. This shared network state is the Bitcoin "ledger."
In this network, if Alice transfers some bitcoin to Bob by sending her "transaction" to her peers on the network, anyone in possession of the block containing her transaction can see that the transfer occurred, because the sequence of states is consistent, and that Alice cannot now send the same bitcoin to Carol and that Bob is thereafter in possession of the bitcoin.
Bitcoin was the first true "stateful decentralized network," capable of creating a shared consistent state without a trusted intermediary, which resists adversaries – through the application of protocol math.
Beyond the invention of cryptocurrency, Satoshi had created a decentralized network that hosted a ledger, where the data and all related computations lived *within* the network's protocol interactions.
In this new type of network, peers might cache copies of the shared state, but the protocol defines exactly what the state should be, and maintains constraints regarding how it can be updated.
Because the state, and computations that update the state, live within the protocol, and are restricted by the protocol, they do not depend on special trusted peers (computers) keeping definitive records. To corrupt computation and state, you must corrupt the mathematical protocol.
This is completely different to BitTorrent, say, were a protocol command issued by one peer to another simply obtains state that it maintains.
Byzantine Fault Tolerance means that If a peer is adversarial/faulty (or "Byzantine" in the arcane speak of distributed computing), then their incorrect responses are detectable and can be discarded by correct peers, and whatever these bad peers do, they cannot corrupt the state shared among correct peers.
So long as the math is good (which requires proofs, that many protocols fail to produce), the network is invioable since math is not subjective and 2+2 always equals 4, not 5.
Stateful decentralized networks also require other features that I will not cover in depth here. For example, participation needs to be gated some way to prevent an adversary adding so many peers that they break the "fault bounds" of the protocol math involved. This is what is referred to as "Sybil resistance," and a public network can create it in different ways.
For example, Bitcoin uses proof-of-work, where costly hashing stands in for voting on a peer-by-peer basis. Ethereum uses proof-of-stake, where staked/locked ether is a stand-in ("voting by capital"). The Internet Computer has a decentralized permissionless governance system which defines the peers, which consist of standardized hardware nodes. In this network, these nodes must produce the correct number of valid blocks required of them by randomness, in a system of proof-of-useful-work, to continue participating.
Despite using different approaches taken to "Sybil resistance," all three networks are "stateful decentralized networks."
To understand the utility they try to provide, we can divide them by blockchain generation.
Bitcoin is a First Generation network, where the network state is a simple cryptocurrency ledger that can be updated. Ethereum is a Second Generation network, which adds smart contracts (i.e. software and related data) to its shared state. And the Internet Computer is a Third Generation network where an evolved form of smart contracts can do general-purpose computation that can be used to create something like a social network, entirely on the network, without need for traditional IT.
See where we're going?
// The Provision of Near Magical Powers //
Bitcoin showed us that shared network state and computation could be 1) tamperproof, which means that state can only be updated by computation initiated by correctly signed transactions, without backdoors and security that is inviolable, 2) unstoppable, which means that so long as there are sufficient peers running, it has 100% resilience, and 3) autonomous, in the sense that state and related computations do not rely upon a person, organization, or other intermediary.
However, token ledgers are just the start of the story.
Ethereum showed us that the technology generalizes to computation beyond simple ledgers by hosting smart contracts. For example, because the Uniswap decentralized exchange is hosted by the network, it is also tamperproof, meaning no cybersecurity systems are required to defend its state and operation, and every computation always only involves its correct logic/code, and is legally initiated. Furthermore, so long as Ethereum continues to run, its code can always be invoked, and it is therefore "unstoppable."
Uniswap also demonstrates the power of autonomy: each particular version installed on Ethereum is unmodifiable, such that no individual controls the code and therefore cannot surreptiously modify logic to steal user funds.
Uniswap has these properties because it exists within the Ethereum network's protocol interactions, rather than on a server or cloud. To subvert it, you must subvert Ethereum's protocol, which is mathematically secure (at least assuming the current Ethereum protocol is supported by mathematical proofs @VitalikButerin?).
Stateful decentralized networks, then, provide utility that includes them hosting data and computation that is tamperproof, unstoppable, and supports autonomy. We can also add other useful properties such as being borderless, which is important in an increasingly globalized world, and in the case of smart contracts, composability.
I could go on waxxing about whese wonderful properties, but —
Standing back, and setting aside long-held assumptions about speed, scalability and efficiency limitations, its already obvious that stateful decentralized networks are really a completely new form of compute platform, and that on closer inspection, his new form of compute platform provides potentially overwhelming advantages.
When you build a service such as a defi system, social network, or enterprise system on a stateful decentralized network, the service becomes tamperproof, and you don't need to protect it using fallible cybersecurity systems like firewalls, or anti-malware, because its data and computation lives inside mathematical protocol interactions, which precisely restrict what can and cannot happen, and its unstoppable.
// The Meaning of "Blockchain Singularity" //
The global cost of cybercrime is predicted to exceed 10 Trillion dollars in 2025, which will be 35%+ of the GDP of the United States. Cybersecurity is becoming a major problem of our time, like war and climate change, and is just one of the key problems that stateful decentralized networks, in their many manifestations, can solve for.
Yet few have zoomed out. This is partly because of widespread misconceptions that blockchain networks have fundamental technical limitations, partly by a widespread preoccupation with speculative instruments like NFTs and memecoins within the industry, and partly the difficulty of seeing that pervasive and prevailing challenges like cybersecurity, might be solved.
However, as speed, scalability, efficiency and other limitations are rolled back, stateful decentralized networks will increasingly provide a superior form of alternative tech stack.
Instead of building system and services using server computers, clouds, virtualization, orchestration software, database servers, application servers, web servers, firewalls, anti-malware, and all the rest – humanity will build systems and services that are secure by default, which never get corrupted, which never stop running and need restarting, and in the world of web3, we will build things like autonomous social networks that run under the control of DAOs that provide transparency and deliver 100% ownership and full sovereign control to internet communities.
Stateful decentralized networks – blockchains – will function as unstoppable decentralized and secure "serverless clouds," where anything can be built in forms that are vastly more secure and resilient. These clouds will also finally provide a route out of the complexity of the current IT stack.
This is also important, because the world currently spends around 2 Trillion dollars a year on IT personnel, who now spend 95% of their time just chasing complexity. Meanwhile, it's clear that an Ethereum smart contract, say, exists within a highly simplified seamless environment, and for example persists its data without the need for things like database servers. Blockchain will become a stack that drives incredible IT personnel productivity through simplification.
Third Generation blockchain chases these immense opportunities.
It's a new paradigm that sees blockchain as humanity's new IT stack, upon which *any* system or service can be built with immense advantages.
In the future, Third Generation blockchain will provide unimaginable advances in IT, solving for key problems of our time such as security, resilience and IT productivity, which many incorrectly assume are intractable.
As I have shown in recent video demonstrations, you can run AI models as smart contracts on the Internet Computer *today* – having them do tamperproof and unstoppable inference.
Third Generation blockchain will therefore play a key role even in this new arena of tech – in the future, AI models run by organizations will have access to their most sensitive data, and running them on blockchain can solve for the risk they get hacked. We will also come to heavily depend on AI in numerous ways, and therefore it's imperative that AI models have massive resilience against infrastructure failure, which blockchain again solves for. Plus in the realm of web3, oftentimes it will be essential that AI runs autonomously, which only blockchain can enable (for example, imagine an AI that verifies the Solidity code of Ethereum smart contracts, and certifies them; it's essential users will know the certifications come from the AI, not from some person, organization or other intermediary that they then have trust).
At DFINITY, a large and eminent team of cryptographers, computer science researchers and engineers has been pursuing the Third Generation blockchain paradigm for years, and continues to make rapid advances – even though the Internet Computer network you see today already represents more than 1000 person years of R&D. We plan to continue this effort forever.
We understand that is blockchain is stateful decentralized networking, the magical powers this essence unlocks, and why that makes blockchain the future of compute.
As the technology advances, Third Generation blockchain is reinventing compute in realtime.
Web3 social networks, social media and games are already running on the Internet Computer end-to-end, without the help of current/traditional IT such as server computers, cloud services and traditional platform software like databases and web servers. These services already host many thousands of users, showing how Third Generation blockchain networks can scale, and many of the services keep tokens inside, yet run hack-free without any traditional cybersecurity protections at all – speaking to the security revolution underway – while running autonomously under the full control of community DAOs.
Third Generation blockchain is decentralized cloud that hosts tamperproof, unstoppable and optionally autonomous systems and services, with additional functionality that allows hosted service to for example to serve web experiences directly to users. It's performant, scalable and efficient, and rapid improvements continue on all key axes.
I'm proud to say that this revolution in compute began within the blockchain/crypto industry, and is one of many gifts it has given the world. However, Third Generation technology will now quickly spread to the enterprise and government IT sectors, where system security and resilience, and the productivity of IT personnel are critical concerns.
The UTOPIA (Unstoppable Tamperproof Open Platform for Independent Autonomy) venture will make ICP technology available for enterprises and governments that cannot build on a public network, because they need to control which peers/nodes process their data, allowing them to create the Internet Computer equivalent of intranets, which nonetheless interoperate with the public internet.
Our purpose at DFINITY, and other Third Generation networks when they start to appear, is to reinvent compute itself. Our purpose is to get the vast majority of humanity's systems and services running on blockchain.
The scope and importance of this endeavor is similar to that of AI, which field will also benefit enormously from the reinvention of compute.
Sometimes our industry has become myopically focused on the speculative side of blockchain, and blockchain narratives designed to lure in speculators.
We want to open people's eyes. Our industry is not just about that. Our industry is about the almost magical powers that stateful decentralized networks unlock within the world of technology.
In the past, I have talked about "blockchain singularity." The term does not infer a future where almost everyone in the world will come to own a memecoin, NFT, or participate in restaking – or anything like that.
It means is that the vast majority of systems and services that humanity uses will one day run on blockchain – in a process that will occur progressively over years, as our networks inevitably eat into the multi-trillion dollar tech pie.
This is what I'm talking about when I say "smart contracts will eat the world" in presentations (riffing off a16z's expression that "software is eating the world"). Third Generation blockchain is our future tech stack.
Once the nature of stateful decentralized networks is known, this much becomes obvious. The Third Generation blockchain will deliver exponential impact within the world of IT, through seminal advancements such as solving the cybersecurity challenge.
So that's it for this tweet! Thank you for reading if you stayed with me this far.
Join us reinventing compute using Third Generation blockchain that is stateful decentralized networking without limits.
Everything on blockchain ⚡️💪👊
