Here are my favorite readings about cryptocurrencies and blockchain technology. This list will continue to be updated regularly.
Why Decentralization Matters
Chris Dixon, February 18, 2018
Control as Liability
Vitalik Buterin, May 9, 2019
The Meaning of Decentralization
Vitalik Buterin, February 6, 2017
Beyond the Bitcoin Bubble
Steven Johnson, January 16, 2018
At the end of last year I wrote about three under-the-radar product trends for 2020. Let’s recap to see how well I did before making my three predictions for 2021.
Active cover amount on Nexus Mutual grew from $1.1M insured to $56.4M insured in 2020, a 50x increase in one year!
2020 also saw over $93 million lost in a slew of hacks — bZx, dForce, Opyn, Harvest Finance, Value DeFi, Origin Protocol, Akropolis, Pickle Finance, and others — while Nexus successfully paid out its first claims in the bZx hack. …
The most popular metric right now for DeFi adoption is total value locked (TVL), shown on trackers like DeFi Pulse. TVL is a good metric for projects that have just launched and are looking to bootstrap liquidity. After all, automated market makers like Uniswap and money market platforms like Compound aren’t very useful without a critical mass of liquidity.
But TVL in isolation is an incomplete metric. First, TVL denominated in USD is a bit misleading and is often driven by fluctuations in the price of ETH. …
Wallets are critical infrastructure for cryptocurrencies. Every crypto behavior — whether buying or selling crypto, hodling crypto, sending crypto, staking crypto, and more — relies on wallets in some fashion. Wallets are also the gateway to Web3 just like how web browsers are the gateway to the Web2 Internet. Given their importance, almost $400M of funding has gone to crypto wallet businesses to date, of which Ledger ($88M), Blockchain ($70M), BRD ($54M), and Abra ($35.5M) have raised the most.
A lot of research and work is being done right now to design better wallet UX. In this piece I give…
The two most notable cryptocurrency price trends of 2019 are 1) Bitcoin dominance increasing from ~50% to ~70% and 2) BTC price fluctuating from $3.5K in January to a peak of $13K in June down to $8K today. Bitcoin maximalists view #1 as validation that there are no important projects outside of Bitcoin and cryptocurrency skeptics believe that #2 supports the fact that cryptocurrencies are only used for speculation.
We disagree with both claims. Beneath the surface, there are many important projects being built outside of Bitcoin, enabling new use cases outside of speculation. We’ve been focused on backing the…
Much of the discussions around layer 1 chains so far have been about designing new consensus algorithms for better scalability. At the same time, very little has been written about the state growth problem that layer 1 chains face. Addressing state growth is an underexplored yet critical factor for the long-term success of a layer 1 chain.
A blockchain is a distributed ledger that stores state data such as transactions. State growth refers to how quickly the size of the blockchain is growing. …
Decentralized exchanges, or DEXs, have emerged last year as a solution to crypto’s bloody history of centralized exchange hacks. The main innovation is allowing users to trade directly from their wallets without having to trust an exchange to custody funds and implement robust security practices.
While self-custody is an important feature of DEXs, decentralized exchanges also present a unique opportunity to rethink how to design an exchange from scratch based on first principles. The three main models for designing an exchange are the order book model, the automated market making model, and the Dutch auction model.
An order book contains…
Wouldn’t the world be better off if we all shared the same currency?
Having multiple currencies seems to create confusion. If currencies are like languages, then having fewer would presumably create more cooperation and unity among people.
In the crypto space, Bitcoin, Ethereum, XRP, and other maximalists all claim that their favorite coin will become the global currency standard.
It’s important to make the distinction between two different types of monetary maximalism. I’ll call them weak monetary maximalism and strong monetary maximalism.
History can be described as a power struggle between hierarchies and networks. Most history we learn about is hierarchical: it’s about kings, presidents, generals, and CEOs. It’s about states, armies, and corporations. It’s about orders from higher up.
Yet networks have always been with us. Throughout history, hierarchies housed in high towers have claimed to rule, but often real power resided in the networks in the town square below. For it is through networks that innovation and revolutionary ideas can contagiously spread.
Data breaches have steadily become more frequent over the last several years. Under California’s data breach notification law, all companies serving California residents who had their data stolen in a breach are required to disclose a breach report detailing the incident. We empirically analyze the public dataset of California data breach notifications, which contains 1,437 breach incidents between January 2012 and September 2018, to find patterns in the types of companies breached, attack vectors, and information stolen. We find that the financial services industry and large companies with over 10,000 employees are most likely…
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