On September 15, the most complex, riskiest and most tested software project in history will be launched. Moreover, if it drops or is hacked immediately, it will likely precipitate a global collapse of about a quarter of trillion dollars in assets, perhaps within hours, making every financial meltdown in history look limp, with domino effects and contagion we can’t even grasp.
Chances are it won’t fail. Really. I promise.
It has been in development for about eight years. Between 200 and 300 of the smartest developers in the world work there. When it goes live, the event will be watched by millions, many of whom won’t really understand what they’re seeing on their screens.
Most people on Earth won’t know or care. Unless of course $250 billion disappears overnight.
It’s called The Fusion.
A rewind. Bitcoin appears in 2010 and immediately increases in value from nothing to around $20,000 per bitcoin today. In 2015, a competitor was launched called Ethereum. It adds some very important differentiators and other bells and whistles, which are not important here except to say that it immediately becomes the second largest blockchain after Bitcoin.
Both blockchains use the same underlying security architecture that uses quite a bit of electricity, which has since become a hot topic of debate. But even as soon as Ethereum was launched, its creator, Vitalik Buterin, wrote a blog in which he said (I’m paraphrasing): Wait! I have a better idea. We can implement an underlying architecture that is 99% more energy efficient! Let’s do it!
That was almost eight years ago.
When Buterin (and his colleagues) came up with this notion, there wasn’t much value circulating in the Ethereum network. But then it grew and grew and grew until it is now worth – hundreds of billions of dollars. The energy efficiency security project that required a fundamental re-architecting of Ethereum continued in the background – research, development, new ideas, more research, more development.
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And then, as power usage issues entered the air of the times with more urgency, especially as the Ethereum network really took off, preparations for the move to a more energy efficient architecture in energy have also appeared. Those crypto-literates reading this will surely notice that I’m carefully steering clear of crypto lingo here, as there’s another narrative I want to probe.
That’s it. You have a few hundred billion dollars of value locked up in your blockchain. You process $1 billion a day, transactions constantly flowing through the network, 24 hours a day. How on earth can you risk making a deep and fundamental change to the architecture of real time without breaking things? Or, as is often done by analogy, how do you change a jet engine in mid-flight?
This was, and still is, the nature of the problem, its risk, its complexity and its challenge. And that means testing. On test networks. With test cryptocurrencies. With test computers, thousands of them. And test and simulate and improve and test again. Which has been around for years and is beyond anything the software world has ever seen.
All this for a more energy-efficient blockchain? In part, yes, but more importantly, it’s part of a longer roadmap – less energy, a deflationary monetary system, fast throughput, low fees, sustainable stakeholder incentives, and more. other more obscure characteristics. All the things everyone in crypto secretly dreams of at night and tweets about by day.
I’ve read quite a bit about what this change entails. It’s both terrifying and quietly impressive to anyone who’s dabbled in computer programming. The moon landing, the first Macintosh operating system, the new iPhone operating system, the new version of Uber or Meta or WhatsApp or quantum computing – nothing comes close to this for pure technical ambition under pressure real money and real savings that all feed out of this network.
Watching the tests that led to this convinced me that all will be well, this will mark the start of a new era in crypto. If successful, the crypto price may rise, maybe not – I have no idea; it is less important in the short term.
If it goes the other way, duck. This will extend far beyond crypto. DM
Steven Boykey Sidley is Professor of Practice at JBS, University of Johannesburg