Thread by @jessewldn

Last year, I wrote a post: 4 Eras of Blockchain Computing, which introduced composibility (the lego-block approach to software) as a killer feature of blockchains. Recently, my view evolved. Here's a thread & new model for thinking about the ecosystem👇

jessewalden.com/layers-not-era…

Rather than the distinct eras, a better framing is *Layers* of Blockchain Computing. This is a model that highlights how diverse architectures lead to specialization and a more dynamic, valuable stack.

This model mirrors the evolution of the internet stack itself: a layer cake of protocols and languages that are still in (slow!) development, but one that composes into a truly amazing, dynamic and seamless experience of file transfer, email, websites and more.

While IP was born amidst a number of more opinionated and feature rich protocols, many say it won because of its simplicity, and it has certainly hung in there. Today, IPv6 is only at 10% adoption nearly 20 years after its initial release!

So what are the implications for thinking about blockchains?

I'll dive in, but first...
Please note that none of the following should be taken as investment advice. See a16z.com/disclosures for more info.

Okay, here goes...

The original post labeled BTC a calculator (single purpose), ETH a generalized mainframe to be followed by more scalable, app-specific server era blockchains, and then a highly scalable, composable, decentralized "cloud"

jessewalden.com/4-eras-of-bloc…

Where this goes wrong, I think, is in positing a linear evolution and suggesting that each era cannibalizes the next on the dimension of scale and internal composability.

Rewind. Pre 2014, Bitcoin was widely viewed as internet-wide payment rails.

At that time, it was clear Bitcoin's throughput wouldn't support internet scale xfer. Wait around for an upgrade, and risk missing it tip into its current role as SoV (less need for scalability.)

Similarly, Ethereum's early narrative, "a world computer", initially led many to 1) think Ethereum could replace Bitcoin because of its programmability and 2) assess it on the dimension of whether it would scale to internet-wide computation.

The latter is an especially dangerous assumption, because it can easily lead to the view that next generation smart contract platforms are defacto Ethereum killers, simply because they offer more (scaled) computation.

Well, just as Ethereum hasn't killed Bitcoin, scalable decentralized computation may not kill the leading "mainframe" era blockchain. Ethereum's utility today is not that of a world computer, but that of a *world accounting system*

DeFi and DAOs are Ethereum's emergent use cases. Both take advantage of its strengths as a battle-tested, slow, secure computer for token adjacent applications like crowdfunding, lending, digital "incorporation," voting, etc.

Even with network congestion leading to high fees, or wait times on the order of minutes or hours, these applications beat the UX of going to a bank for a loan, proxy/shareholder voting, or incorporation/dissolution of an LLC.

In my view, what comes next—the "server" and "cloud" eras of blockchain computing—are less likely to kill Ethereum than to expand the adjacent possible by playing host to a different set of applications that take advantage of their unique features.

Application-specific, "server era" blockchains that roll their own networks (e.g. those building on Cosmos SDK) may also be distinct from "cloud" era networks like Dfinity, Near, Polkadot, ETH 2.0—the latter taking a more top-down approach to security issued from a base chain.

Each of these architectures may end up serving different applications. Add layers for privacy, storage, L2 scalability, node-SaaS, custodians and wallets and you start to have a thick, composable layer cake akin to the way the internet protocol stack developed.

As most analogies, this one is imperfect, but a takeaway is that if you expect individual blockchains to scale comprehensively, it's very easy to miss the unique purpose that they specialize in, and how specialization can end up facilitating fit in the larger ecosystem.

Following this, projects that we now think of as competitive may turn out to instead be complimentary and interoperable.

And while none of this is to say that BTC or ETH have won their respective layers forever, it is possible to view them continuing to play a role in these specialties with only modest upgrades/maintenance (such as proposals for state bloat in ETH 1.x)

The development of more advanced/scalable technologies does not necessarily cannabalize the specialized use cases of preceding eras, but instead results in a complex, layered stack. The space on top of these discrete foundations is likely much bigger than we currently know.

For builders, consider what use cases your network/product handles uniquely well. How does it compose with the unique capabilities of other layers in the cake and how do you talk about that?

Thanks to my team at @a16z crypto for conversations that led to this PoV (@cdixon, @katie_haun @ali01, @apruden, @literature and especially @bhorowitz who lived the first wave of internet layer-caking first hand.)