{"id":37370,"date":"2021-12-10T00:00:00","date_gmt":"2021-12-09T11:00:00","guid":{"rendered":"https:\/\/bravenewcoin.com\/insights\/not-by-ethereum-alone-what-do-layer-one-newcomers-actually-have-to-offer\/"},"modified":"2023-11-27T23:32:07","modified_gmt":"2023-11-27T10:32:07","slug":"not-by-ethereum-alone-what-do-layer-one-newcomers-actually-have-to-offer","status":"publish","type":"post","link":"https:\/\/bravenewcoin.com\/insights\/not-by-ethereum-alone-what-do-layer-one-newcomers-actually-have-to-offer","title":{"rendered":"Not by Ethereum alone: what do layer-one newcomers actually have to offer?"},"content":{"rendered":"

With the likes of Solana, Avalanche, and NEAR rising to the blockchain olympus, 2021 may well be called the year of alternate layer-ones. Along with the ever-growing transaction fees, the world\u2019s largest blockchain keeps failing to cover emerging specific use cases.<\/p>\n

While the promise of Ethereum 2.0 is alluring, its node design in fact prevents rapid-fire transactions<\/em> per account, and the execution layer business logic it needs to accommodate the state reversion. Ethereum\u2019s limited computation model and PoS consensus bring along high fees and severely bottlenecked throughput, with gas spent to skip ahead of the line, rather than paying for the actual production cost of running a node.<\/p>\n

How exactly are purpose-built chains better?<\/h2>\n

What every business wants from blockchain systems is cryptographic certainty. To leverage blockchain for more agility and speed, you\u2019d need to carefully consider all the limitations of smart contract functionality for your concrete business use case. Just like everything else, there is no one-size-fits-all blockchain \u2014 some chains work better than the others for certain use cases.<\/p>\n

That\u2019s why tracking and verifying documents and signatures on the Ethereum chain that was created mostly for scripting financial transactions, doesn\u2019t sound like a very good idea.<\/p>\n

\u2018Companies can determine whether they should invest in blockchain by focusing on specific use cases and their market position\u2019.<\/strong>
\nBlockchain beyond the hype: What is the strategic business value? McKinsey.<\/em><\/p>\n

Niche public chains purpose-built for specific applications<\/a> have already proved their cost-effectiveness and immediate business value for many companies. Just like Algorand with its native protocol-level integration for financial instruments targets the financial use case, or Flow was designed for in-game NFTs, there needs to be a blockchain explicitly made for tracking and auditing operational records, such as counterparty signatures and other informal sign-offs.<\/p>\n

First scalable blockchain to make informal interactions trusted<\/h2>\n

The lion\u2019s share of operational data today remains uncaptured and unverified. Everyday agreements and transactions, social media interactions, and other informal interactions are hard to track due to their smaller scale and informal character. Unlike commercial, legally-binding contracts that are tracked by tons of sophisticated software, informal operational data<\/em> and social signals remain buried in messengers, Slack chats, and even SMS exchanges. \"Taraxa<\/p>\n

Silicon Valley-based Taraxa<\/a> aims to solve this by using immutable audit logs<\/em> to capture and record off-chain unstructured transactional agreements right where they occur (chat messengers, collaboration platforms, etc.), thereby making them more trustworthy.<\/p>\n

The platform aims to make it possible to measure a person\/entity\u2019s reputation by pulling off-chain signals<\/em> (who does business, how often, etc.) from informal transactions<\/em> into a quantified reputation system running atop a public blockchain ledger built specifically for the audit logging use case.<\/p>\n

Under the hood, there are certain network architecture choices specifically made to deliver highly parallelizable, stateless audit logging:<\/p>\n