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Moxie's article is fine, thoughtful, constructive, worth reading. But it doesn't discuss the concept of blockspace, which is the key technical constraint on web3, just as bandwidth was to web2 (and arguably web1). [1] research.paradigm.xyz/ethereum-block [2] bitcoinsuisse.com/research/decry

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In 2000, Netflix mailed DVDs. They knew streaming was the future. But they also knew bandwidth was limited. In 2022, many web3 entities are partially centralized. They know decentralization is the future. But blockspace is limited. Need Nielsen's Law for blockspace.

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There's tons of crypto projects. Which ones are people actually paying to use?

We can visualize the buy-side demand for blockspace with cryptofees.info. People are paying real money in fees to store things on chain, just like they paid for bandwidth. These fees are analogous to *revenue* for each L1 chain, and give some basis for coin valuation.

cryptofees.info

CryptoFees.info

5:29 PM · Jan 8, 2022

Replying to

Visualizing growth in sell-side supply for blockspace is harder, because a byte on one chain is not exactly interchangeable with another chain. But here's a graph of demand for BTC block size. Fast growth till 2016, then supply came from other chains. blockchain.com/charts/avg-blo

It's not my goal here to revisit the block size debate — I understand the arguments on both sides — but empirically what happened is that when BTC blocks got to ~1MB, other chains arose to provide demand for blockspace. ETH use started soaring in 2017. etherscan.io/chart/blocksize

Now Ethereum's L1 layer has in turn seen its fees rise, such that it cannot accommodate all the demand for its blockspace at the price users want to pay. So that has meant use of Ethereum L2s (like Polygon) and migration to other L1 chains (like Solana). messari.io/asset/ethereum

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An introduction to the different scaling options currently being developed by the Ethereum community.

Of course, the Bitcoin ecosystem is also working on scaling (via Lightning & more) and the Ethereum ecosystem is as well (PoS, optimistic rollups, ZK rollups). These are essentially efforts to meet blockspace demand. [1] coindesk.com/tech/2021/09/3 [2]

ethereum.org

Scaling | ethereum.org

But generally speaking that's an overview of how both demand and supply of blockspace have been rapidly rising over the last several years. See also

@cdixon

on this: newsletter.banklesshq.com/p/blockchains-

Now, as noted above, 1 byte of blockspace on one chain is not the same as 1 byte on another chain. There are different levels of security. Bitcoin's security level is for sovereign-resistant digital gold. Newer L1s are guarding things like video game points & don't need as much.

Quantifying Decentralization

A few more articles of relevance. First, on quantifying decentralization, what we talk about so much. Short answer: the minimum number of entities needed to compromise a system is a measure of decentralization. Quantification then allows improvement.

news.earn.com

We must be able to measure blockchain decentralization before we can improve it.

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Yes, You May Need a Blockchain

Second, on why decentralization is valuable. Public blockchains are massively multiclient databases, where every user is a root user. That is distinct from (say) PayPal or FB's databases; only their sysadmins have root and others are gated by API keys.

balajis.com

Public blockchains are massively multiclient databases, where every user is a root user.

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In summary: - decentralization improves programmability, transparency, exportability, etc - blockspace enables decentralization - blockspace is scarce but rising - and high-blockspace chains & applications are now coming online So: blockspace is to web3 as bandwidth is to web2.

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