The Future of Blockchain: Why Ethereum Struggles with Mainstream Adoption
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Chapter 1: The CryptoKitties Phenomenon
Recently, I had a conversation via Zoom with Sean Robb, a software engineer at Flow. We delved into the origins of CryptoKitties, Flow's development, and how it aims to overcome Ethereum's limitations.
In 2017, the launch of "CryptoKitties," a digital variant of Pokémon cards, marked a significant moment as one of the first blockchain-based games. This trend even attracted the attention of NBA superstar Steph Curry.
With over 1.5 million users and $40 million in transactions, the game's immense popularity congested the Ethereum network. This surge led to record transaction volumes, significantly slowing down the network's performance.
> The Ethereum blockchain wasn’t initially designed to accommodate such a rapid increase in users. This resulted in soaring gas fees and delayed transaction processing, creating barriers for new users looking to join the platform.
Recognizing the need for a more efficient blockchain, the team set out to create a solution.
Section 1.1: Introducing Flow
Dapper Labs, the team behind CryptoKitties, embarked on the creation of Flow, a blockchain tailored to address Ethereum's shortcomings.
Flow was engineered to be faster and more scalable, making it a more fitting choice for mainstream adoption. Key features include:
- Seamless onboarding processes
- Integration of social logins
- Acceptance of traditional payment methods
Flow emphasizes composability, allowing users to maintain their assets in Dapper Wallet while utilizing them across various Flow applications.
Subsection 1.1.1: Why Flow Fits the Mainstream
Flow's architecture is designed for speed, scalability, and user-friendliness. In contrast, Ethereum's complexity makes it less suited for widespread use.
As of now, Flow has facilitated over 360 million transactions and ranks second in total NFT transaction volume. It powers popular Web3 platforms such as NBA Top Shot, NFL All Day, and Doodles.
Section 1.2: The Promise of Hybrid Custody
Hybrid custody merges the robust security of self-custody solutions like Metamask or Ledger with the convenience offered by custodial wallets such as Coinbase or Binance.
This model allows users to retain control over their private keys while shifting the management of their wallets to a third-party service like Dapper Wallet.
Why is Hybrid Custody Important?
This approach simplifies the onboarding process for users entering the Web3 space. Without hybrid custody, individuals face the complex task of creating personal wallets, managing private keys, and transferring funds across platforms.
This intimidating process may discourage many potential users from venturing into Web3 at all.
Dapper Wallet is also developing features that enable users to retain their assets within the wallet while engaging with third-party Flow applications. For instance, users can lend their assets on Flowty without needing to withdraw them from Dapper Wallet.
However, Sean expresses skepticism about Flow being a singular solution for mass blockchain adoption, suggesting that it won't be the sole player in the space. He believes Flow will invigorate the next wave of blockchain gaming.
Chapter 2: Institutional Adoption and Ethereum's Future
This video titled "The Next Big Unlock For Institutional Adoption of ETH" discusses potential pathways for Ethereum to become more widely accepted in institutional settings, exploring the challenges and opportunities that lie ahead.
In "Vitalik Buterin: Ethereum Will Most Likely Be Mainstream and the Most Secure Base Layer," the co-founder of Ethereum shares insights on the future of Ethereum, emphasizing its potential to become a foundational layer for mainstream applications.