Coinbase, which launched its new blockchain Base in late July, has become a major player in Ethereum-based second-tier chains.
For example, on September 21, the chain processed approximately 677,000 transactions, of which “870,163 new addresses were discovered,” according to Etherscan data.
In comparison, Arbitrum (a well-known Layer 2 launched in June 2021) had 925,000 transactions and 54,233 new addresses on the day.
Coinbase protocol lead Jesse Pollak told Cointelegraph at the Messari mainnet conference in New York on Wednesday, September 20, that Base is currently hosting hundreds of decentralized projects, including decentralized inflation oracles, restaurant rewards programs, insurance Aggregators and in between.
Pollak, a major force behind the Base project, spoke with Cointelegraph on mainnet for a Q&A that covered Coinbase’s vision for its new platform, the future of decentralized applications (DApps) and the future of blockchain technology. develop.
Cointelegraph: You said Base was created with “a clear vision: Bringing the next million builders and billions of users on-chain. “ These are big numbers. How long will it take for them to materialize?
Jesse Pollack: This has nothing to do with Base, but more about one billion users entering the chain – embracing the power of this new platform [i.e., blockchain] It’s transparent, open, global – and developing applications that improve people’s lives. The base is obviously going to play a big role in that, but it’s bigger than us. We do see our role as helping to grow the pie.
CT: What about the timeline?
JP: I predict this will happen within this decade, with 1 million developer jobs by 2030. The 2020s have already seen huge changes—not just in the industry, but in the world at large. It will happen faster than people expect.
CT: What else needs to be done before we see mainstream adoption?
JP: Three high-level things need to happen. First, we need to make it cheaper for people to use these applications that are being built. We’ve already achieved the first several orders of magnitude cost reduction with Base. The same app that might cost $5 or $10 to use now costs 5 to 10 cents.
But we don’t think this is enough. We really want to get it down to the point where it’s almost unnoticeable to the user.
Secondly, we want to make it easier for people to use these apps. A lot of this is about creating a better wallet experience.
Third, we need to have better on-chain identity infrastructure. Today, most consumer borrowing in the United States and other developed countries is undercollateralized lending in the form of credit cards or buy-now-pay-later arrangements. Now all this is almost impossible to achieve on the chain, because we do not have a reliable identity system.
So to enable the next big wave of use cases, we need lower costs, better wallets, and better identities.
CT: You said that up until now, all most people have done with cryptocurrencies is speculate on the cryptocurrency market, and now it’s time to move on. For example, is it a mistake to focus so much on the market price of Bitcoin?
Pollack: If you look at the way technology life cycles evolve, I don’t think that’s wrong. For example, Carlota Perez writes that when you have meaningful technological innovations like the Internet or electricity, financial bubbles are almost inevitable. You have this adoption S curve. [See chart below.] In the beginning, much of the innovation was driven by speculation as people saw the potential of the technology. This speculation attracts capital that essentially funds innovation and, ultimately, world-changing impact.
CT: Where are we now?
JP: It’s time for us to get out of this predicament [speculative] Entering the stage of truly bringing practicality to ordinary people. The infrastructure is ready.
Even two years ago, if you wanted to use an application on Ethereum, you had to spend $5, $10, or $100. This is not conducive to building daily use cases.
CT: Speaking of Ethereum, why did Coinbase decide to build its layer 2 on the Ethereum blockchain? Have you considered using another mainnet?
JP: In fact, we considered building a chain three times: in 2018 and 2020, and most recently in 2023. The first two times, we considered building an alternative layer 1 that would compete with Ethereum. We concluded that we didn’t want to put ourselves on an island that was isolated from the rest of the ecosystem.
For the third time, we considered all options: Ethereum, alternative layer 1, layer 2, etc. What feels natural to us about Ethereum is that it’s the largest crypto ecosystem by value, by activity, by developers, or two – so by building Base as an Ethereum layer 2, we can both Contributing to scaling Ethereum can also be a part of this ecosystem that is bigger than us.
CT: What about Ethereum’s oft-discussed scalability shortcomings, including network congestion and sometimes ballooning fees? Have these issues been largely solved through the widespread use of layer 2 rollups like Optimism and Arbitrum (and now Base), where transactions are “batched” and added to the mainnet all at once?
JP: If you look back at the history of Ethereum, the original vision was: We were going to do it all at layer 1, and we were going to scale through sharding. But around 2020 and 2021, with the emergence of layer 2, the Ethereum community and the core development team basically said: If we change our strategy and instead of trying to introduce all this complexity in layer 1, we build the foundation facilities to enable Tier 1 innovation, what will be the result? 2?
This is Vitalik [Buterin, Ethereum co-founder] Wrote a lot. Over the past two years, this is what has happened. For example, Coinbase has spent the past year and a half supporting an initiative called EIP-4844, which introduced aggregated data availability, lowering fees and increasing transaction throughput.
But do I think we’ve solved the problem? No. These issues are going to take years to resolve, and I think we need two to three years now to make these investments, and we have another two to three years or more. But I think we’ve made a lot of progress.
You can see this on L2Beat. [See chart below].two years ago [Sept. 21, 2021]eight transactions per second [on average] On layer 2 projects and 13 TPS on the Ethereum mainnet. Today, the TPS for Layer 2 is 58 and the TPS on the Ethereum mainnet is 11. So in two years we went from less than 1x to 5.7x speed.
CT: Are you surprised? “Lively” social media DAPP — Friend.tech — Was Base the best performer initially after its summer launch? Its bill exceeded $1 million in 24 hours. Perhaps this isn’t the serious use case some critics were hoping for, though.
JP: Well, when the first social apps were launched on the internet, some people looked at them and said, hey, these things are toys. When are we going to do something serious like put the newspaper online? If you look at where we are today, billions of people use social apps every day. They will continue to be the way people connect, and social applications will play a key role on the chain.
The power of the next generation of on-chain social applications is that they will enable people to have sovereign ownership. They will continue to have their own creativity, they will continue to have control – rather than the big corporations that control them now.
CT: Can you tell us about any DApps launched on Base that excite you?
JP: Check out Blackbird, a restaurant customer engagement platform. You walk into any participating restaurant, tap your phone, and it instantly knows who you are. They customize the experience for you. Repeat visitors can be rewarded. It currently has 10 to 15 restaurants in New York City, but will soon expand to California. A lot of people are talking about this on Twitter.
CT: Where will blockchain eventually find its “killer app”—doing for the cryptocurrency world what email did for the internet? Or does it already appear to you?
JP: There won’t be a killer app. There will be many killer apps. We’re starting to see some of that emerge. One of the most adopted in the real world is stablecoins. If you look at the total stablecoin transaction volume last year, you will see that it is a huge number. It will be an important driver of economic freedom over the next decade. It gives people in places like Argentina or Turkey access to stable currencies like the U.S. dollar.
But stablecoins are not alone. We will see many on-chain applications that will change people’s lives.
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