🛳️ Checking In On 2020's Crypto Must Ship List — Issue No. 93

Back in January, I wrote about four projects on the "must ship list" for 2020. We're now one third of the way through the year, and while it feels like the time has flown by, it also somehow feels like January was a decade ago. Nonetheless, here we are. May has arrived.

The four projects I identified as needing to ship this year are Filecoin, Taproot, Ethereum 2.0, and Polkdadot. Here's how I described them in that January issue:

The aforementioned four projects need to ship this year. Each of them is high profile and hotly anticipated. Most of them are behind schedule already. For any one of these projects, failure to ship would leave their respective network in a precarious position. The good news is that I expect most of them (if not all) will ship this year.

Let's check in on these projects now. Is crypto's must ship list going to deliver or disappoint in 2020? In this issue of Build Blockchain, we'll find out.

Filecoin

The Filecoin project was one of the highest profile ICOs of 2017. Unlike many who raised large sums of money during that hype driven bubble, the Filecoin team has actually been putting their money to use, building out what they promised. Granted, it's taken longer than most would have expected at the time, but perhaps the expectations were never realistic. The problem Filecoin aims to solve— reliable decentralized data storage— truly is a hard one.



When I wrote about them in January, Filecoin had recently launched a testnet, and stated they intended to launch mainnet "soon" if no show-stopping issues were found. Well, four months later, the testnet is still chugging away, and now has more than 5 Petabytes (that's 5 Million Gigabytes) of data being stored.

The Filecoin team has continued develop and improve their client as they've learned more from the testnet experience, and recently demonstrated interoperability with another client built by another team. Launching a multi-client, phase 2 testnet is slated for the month of May, and if all goes well, the the team hopes to launch mainnet sometime this summer.

One interesting tidbit was mentioned in the teams recent status update, posted on the Filecoin blog. They're currently pursuing a parallel effort to develop a more efficient version of their Proof-of-Replication consensus algorithm, which allows miners to secure the network by storing encrypted data for its users. The new version could be a significant improvement over the version currently being tested, but it's not yet proven that it will work. Link.

If the parallel effort proves successful, it will be swapped in for the current implementation before launching mainnet. That worries me a bit from a rigor perspective, but I do give them credit for pursuing the improvement in a non-blocking way, so as to avoid delaying the mainnet launch if the new approach does not prove feasible.

Overall, things are looking promising for a Filecoin mainnet in 2020, and I've got my fingers crossed it will work out well. If the network is successful, it will be a powerful new primitive for those building in the decentralized ecosystem.

Schnorr / Taproot

This year started with a strong signal that we'd see an upgrade softfork soon: Bitcoin developer Pieter Wuille opened a pull request against Bitcoin Core with an implementation of Taproot and Schnorr signatures. Here's how I described the prospective upgrade back in January.

[Schnorr] enables more efficient transaction signing, while [Taproot] enables more complex rules to be encoded around who can spend certain Bitcoin. Combined, the changes also allow for improved privacy. Schemes like complex multi-sigs, or the opening/closing of Lightning network channels, could execute on the network without requiring additional data, or revealing the signers involved.

Since then, it seems the folks working on Taproot and Schnorr have progressed with that famous Bitcoin caution. An organization called Bitcoin Optech hosted a number of workshops earlier in the year to solicit feedback and input from technical Bitcoin users throughout the industry. The feedback has been used to iterate further on the implementation. Link.

Where do we stand on actually seeing the upgrade go live? Well, it hasn't been scheduled to go live anytime soon, and with the halving of Bitcoin's block rewards set to occur in less than 10 days, we'll probably have to wait for the dust to settle before we start hearing about it again.



Bitcoin is notoriously slow to upgrade. This isn't a bad thing. As a project, Bitcoin prioritizes security, censorship resistance, and backwards compatibility over the addition of new features. That posture aligns well with the aim of making Bitcoin into the ultimate form of digital gold.

That said, there is a fine line between conservative engineering and stagnation, and to be honest, Bitcoin has flirted with it. I think the Taproot and Schnorr upgrades are clearly valuable ones to the protocol, and while I support a careful approach, I do hope we see them brought to mainnet this year.

Update: Bitcoin Core contributor Andrew Chow made a Reddit post indicating Taproot is unlikely to ship in 2020. I find this dissapointing. Link

Ethereum 2.0 Phase 0

While the Bitcoin community proceeds slowly towards activating even a backwards compatible softfork, the Ethereum community is taking a markedly different approach to upgrading that network. In fact, Ethereum 2.0 isn't just a non-backwards compatible change, it's a whole new network in itself, one that will use Proof-of-Stake consensus and scale laterally via shards, that is, parallel chains that share security and can communicate with each other. Ethereum 2.0 is expected to launch in three discrete phases and operate alongside the 1.0 chain for some time.



Back in January, when I included Ethereum 2.0 in this year's must ship list, it seemed possible that the first phase of that new network might actually launch in the first quarter of the year. I was skeptical of that timeline, though, and predicted it would be Q3 at the earliest. Well, Q1 has come and gone, and while a lot of progress has been made, my Q3 guess is looking pretty accurate. Perhaps I'll be pleasantly surprised by a Q2 launch, or perhaps it will slip to Q4.

I do think ETH 2.0 Phase 0 will arrive sometime this year, though, and that's because the teams building it have been hitting some important milestones as of late. First, on April 19th, we saw the launch of new testnet, codenamed Topaz, running the Prysm Ethereum 2.0 client built by Prylabs. The testnet has been operating smoothly since then, with thousands of validators participating. Link.

One of the hopes for the Topaz testnet was that other Ethereum 2.0 clients, being built by other teams, would also be able to participate. The Lighthouse client, being built by Sigma Prime, was a leading candidate. When developers attempted to sync it with Topaz, though, they discovered a consensus bug in the Prysm client which made it impossible. While disappointing, this did allow the teams to resolve these bugs on separate code branches, and they've since launched a multi-client testnet call Schelsi. Link.

It's important to remember that this is only the first of three phases for Ethereum 2.0, and its functionality will be limited merely to staking and producing blocks. More so, launching the network is itself only the first step. It will take many years of operation for it to prove its utility and security. Still, you have to crawl before you can walk. It will be an exciting milestone when Phase 0 finally comes online, and it's looking likely it will be sometime this year.

Polkadot

Finally, we come to Polkadot, a Proof-of-Stake blockchain with similarities to ETH 2.0, but also with a number of major differences. Most notable amongst Polkadot's differences is its on-chain governance mechanism, and the fact that shards (called parachains) are heterogenous on the network. Polkadot comes with some additional competitive intrigue, since one of its creators is Dr. Gavin Wood, a researcher and developer who was one of the co-founders of Ethereum itself.



In a recent blogpost, Wood reported that the Polkadot team was continuing with development and had not experienced any disruptions due to the pandemic. We also know Polkadot codebase is currently undergoing several audits, the results of which are expected soon. Overall, though, mainnet launch plans for Polkadot remain rather vague. Will it happen next month, next quarter, or next year? This hasn't been laid out clearly by the team. Link.

To be fair to those working on Polkadot, they have already shipped a production decentralized network. Called Kusama, the network is referred to as a "canary" network, as in a "canary in the coalmine" for Polkadot. While it runs on the same code that Polkadot eventually will, and its tokens have real value, it's explicitly billed as experimental and more risky, and thus not suitable for "enterprise" grade applications. You can think of it as the Litecoin to Polkadot's Bitcoin, but launching beforehand instead of after. Link.

The Kusama network has been running since August 2019, and despite a major disruption earlier this year that required the coordination of validators to rollback state, continues to function today. In a lot of ways, then, the Polkdadot team has already delivered much more than many teams promising the "next generation" of blockchain. The delays in launch may simply be a cautious and conservative engineering approach, which, given the amount of money at stake, is probably warranted. Link.

A Critical Year

Back in that January issue where I first introduced this year's must ship list, I wrote:

We might look back at 2020 as a pivotal year for the buildout of decentralized infrastructure. Conversely, if some or most of these projects fail to materialize, it would spur further concerns about an industry many already doubt.

As it turns out, 2020 is shaping up to be a momentous year for the whole world. The long term effects of the current pandemic will take decades to play out, and will do so in ways that are impossible to predict right now.

Whatever the future looks like, I hope crypto has an important role to play. As we've watched so many of our centralized institutions fail us, this crisis has made it clear that decentralization— as a general principle— is critically important. In the decade ahead, crypto may have an opportunity to step into mainstream relevance.

The four projects I've mentioned are contending to be critical infrastructure for that more decentralized future. If they want to succeed, they need to launch successfully this year. So far, I'm cautiously optimistic that all four may succeed in doing so. That would be a small, but welcomed bright spot in a year that is otherwise shaping up to be a rather difficult one for all of humanity.