What matters in this world is not truth, but trust. - xh3b4sd
We have come a long way on this planet, our earth. And ever since we look up to the stars, we wonder, what it is that truly matters in this life. The human mind created the second realm, which we call imagination. An alternative reality that we can choose to believe in. The human mind is what fabricates everyone's very subjective social reality. And along those lines of thought, it wasn't necessarily truth that humans optimized for ever since, but something more meaningful to people. This meaning can effectively be described as consensus. And within consensus we found loyalty. Loyalty in turn is trust. The kind of trust you can lean on, hard. So the essential resource in everyone's social reality is not truth, but trust, because trust is what determines how much I can rely on you. This is also why history is only written by the victors. And it is up to each and every generation to find consensus on its mutually desirable integrity. One question we can ask is this. Why would anyone trust someone else with their life? Or expressed differently. Everyone has a hill that they are willing to die on. This is why we are doing the wrong thing for the right reason. This is why we are doing the right thing for the wrong reason. And this is why we go and become greater than the things that hurt us along the way. Today we are living through the information age, and with it through the age of trust, and the struggle thereof. The struggle for consensus is inherent to our governance structures that we, in the west, call democracies. And every so often we come together in order to cast a vote, which, every so often, becomes null and void for this or that reason. We then hear that votes get blocked, lost, unaccounted for, or maybe even counted twice. Citizens of democracies place a very high degree of trust in those authorities that ought to guarantee a truthful election. And along those very blurry lines of assumptions, and along this very brittle chain of custody, the fate of a nation may be decided by a few after all. I am not an election truther. I am not writing this to proclaim that the election was or will be stolen. What I want to do here is to take a step back and look at our world, over time, and explain how history is made in front of our own eyes. Across history, there is a tendency of technological confluence. The development of technologies that aim to balance each other out. When we learned to use fire, we did also learn to use water in order to tame the fire. When we learned to wield a sword, we did also learn to hold a shield in order to protect against the sword. When we learned to digitize information, we did also learn to encrypt it in order to protect our privacy. And I think when we will learn to put the ghost into the machine, then we will also learn to coexist. What I am getting at is that the information age requires information systems which in turn allow society to upgrade and function better than it has ever before. My hope is that rather sooner than later, we will for instance start to conduct nation state elections using zero knowledge proofs on public blockchain networks. This would make voting transparent and verifiable, while maintaining individual privacy. One technological reason for why this has not happened yet is the rather difficult problem of private key management. For decades now the cypher punks have dreamed of a world in which every single person owns and operates their own private key for all sorts of fancy applications. In today's world it is still too hard to own, operate and backup cryptographic private keys. So much so that the least sophisticated and most vulnerable of society cannot be expected just yet to overcome this still very technical burden. I think one day we will get there. And I hope that we will get there rather sooner than later. And when we get there, I hope it will happen on a public blockchain that is as available, as reliable and as decentralized as our favourite Layer 1 blockchain network. In one word. Ethereum.
I saw a Cast on Farcaster the other day asking the following question. What evidence is there that non-crypto native organizations are actually coming onchain? This is a question of crypto adoption outside of our industry. Let's ignore centralized exchanges like Coinbase that started as offchain businesses and become more and more onchain over time. Let's ignore PayPal that created its own onchain stablecoin. Let's ignore the various NFT collections that Disney and Starbucks created for fan and loyalty products. And let's ignore that the question of who comes onchain is probably the wrong question. More on that in a moment. For now, let's look at Sony and BlackRock. Sony announced its own L2 rollup on top of Ethereum called Soneium. In the current context Sony is a non-crypto native organization bringing their various products and payment settlement needs onchain. I am not a gamer, so forgive me if this sounds dumb or even slightly off. But, I can imagine a world in which every PlayStation related purchase is settled on Soneium. And as far as I know, Sony is also going to issue their own stablecoin, for exactly those payment settlement needs. So that is one. Let's then look at BlackRock, the world's largest asset manager with roughly 10 trillion USD in assets under management. BlackRock launched the BUIDL fund onchain, on Ethereum L1. The BUIDL fund is a financial product for tokenized treasury bills. Products like these are similar to money market funds, where people can park their cash in order to receive a higher interest payment on their deposit. Those kinds of products are attractive during high interest rate regimes, because people can get more money for their money instead of losing cash to inflation, if it were only sitting in a bank account otherwise. Now, why would we want those kinds of financial products to be onchain? Simply because everything onchain is transparently available 24/7, and because everything onchain can be DeFi composable. Writing down all of this makes me realize again how the world is split into two kinds of people. The more and the less sophisticated players. And I am starting to think that crypto will be adopted one sophisticated player at a time, until the future has finally arrived for everyone without having to realize what crypto is or even does in the background. And that brings me to the point that the original question of who is coming onchain might simply be the wrong question to ask. That question might be the equivalent of asking who is even coming online back then when it was 1993. Back in those days some tried to come online. But most either couldn't, or shouldn't come online, because of something that is akin to the innovator's dilemma. Any successful business that could have come online would have had to make the difficult decision of sacrificing a lucrative business model that did already work, for one that bears many unknown unknowns. And that kind of risk caused most businesses to stay where they were at the time. Some adopted, sure. Which took decades. And some got competed away, by some of which, at this point back then, nobody has even heard of just yet. And here we come back full circle. Because the times of today are the times of mainframes. The times of today are the times of the protocol wars. The times of today are the times of being online for the first time, using a modem that sounds funny. The Magnificent Seven of crypto may not have been founded just yet. And that means we are still so so early on this journey, and that being curious and gritty may very well pay out handsomely one day in the not so distant future. Until then, be curious, dear reader.
10 billion USD is our number for this week. This is the amount of stablecoin TVL across all of the L2 rollup ecosystem, to date. This number is a significant milestone for the adoption of stablecoins and crypto at large. And this number is also significant to legitimize Ethereum's rollup centric roadmap. Because it is really playing out in front of our eyes in real time. I myself am building an onchain application that will use stablecoins, and that I plan to deploy to some L2 rollup. And that L2 rollup may or may not be associated with a company that rhymes to Koinbase. So, more from that front soon! Until then, stay gritty!