Lately I’ve seen a lot of crypto-enthusiasts on Reddit and Telegram making comments like:

“Bitcoin is slow. It is expensive. There are many new coins, modern ones that are much better. They are fast and inexpensive.”

Or the very popular CryptoKitties argument:

“Ethereum couldn’t even handle CryptoKitties, how do you expect it to be Web3.0?”

Or about how Blockhain X is here to turn the tables:

“<insert coin ticker> is king, it can handle 60,000 transactions per second, has no fees and it can do smart contracts”

The popular opinion is that the current leaders by market cap are not good enough, and that new projects are offering better features or alternative architectures (Tangle, Hashgraph) that are going to define a new standard and bring the capabilities of blockchains to new levels.

While I do not dismiss the possibility of Bitcoin being dethroned in the upcoming years, or that the top-5 might change radically in the future, I believe that we need to be skeptical when a project advertises itself as a do-it-all solution, and rigorously investigate it before jumping to conclusions.

There is no silver-bullet that will solve all problems.

“Touka Koukan” (等価交換) is a Japanese phrase which roughly translates to “equivalent exchange”. Nothing comes for free. There will always be trade offs.

Below is the Scalability Trilemma as described by Vitalik Buterin:

Α blockchain that claims to have solved the trilemma has either bent the laws of physics (highly unlikely), or it has discovered a breakthrough method that solves the major blockchain scalability problems that have stumped top mathematicians and computer scientists for the past decade.

While this is not impossible, a more likely explanation is that the blockchain has sacrificed either decentralization, security, or both.

What characterizes a blockchain or a cryptocurrency?

What characterizes a blockchain or a cryptocurrency?

In my debut article, A rant about Blockchains I provide the following definition of a blockchain:

A blockchain is a database that can be shared between a group of non-trusting individuals, without needing a central party to maintain the state of the database.

And cryptocurrency from Google dictionary:

A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

Note that both definitions (blockchain and cryptocurrency) emphasize the need to operate independently of a central party.