Ep. 9: The Sunset Boulevard of Crypto

Crypto Pills

The first block

Blockchain technology is deadly simple.

Although only 15 years have passed since Satoshi Nakamoto’s genesis block, the disruptive effects of this revolution are in plain sight.

The decentralized and distributed nature of blockchain is secure, transparent, and tamper-proof and various industries, from the world of finance to supply chain management, have been impacted.

The success of cryptos has obviously led to a great deal of competition, and the afterlife of defeated chains raises a number of questions about the sustainability and scalability of this technology.

What is the point of employing all this energy (if we are talking about PoW) for a blockchain that eventually dies?

Wouldn’t that be like blowing up a mine with miners and mined coal in it?

Death of a Crypto

When a blockchain dies, it typically means that the network of nodes that kept it alive, is no longer functioning.

We could identify four main case histories in this regard, depending on the circumstances that occurred.

• Dormant: if the blockchain was popular and had a large following, it is possible that a certain share of loyalists would continue to use it even in the absence of functioning network nodes.
  However, this would mean that new transactions could not be added to the blockchain, thus making it difficult (if not impossible) for users to transfer assets or access applications built on top of the chain.
  Another major problem would be how to maintain security without mining power or staking nodes.
• Abandoned: the blockchain becomes essentially an inert artifact with no real use cases, except to be dissected for scientific or historical reasons. It can become a memento mori for others: the causes of the (untimely?) demise can be thoroughly analyzed, with no fears of any kind, except perhaps that for the privacy of previous users.
• Forked: in the event of a dispute about the direction or future of the blockchain, a split into two separate blockchains may occur. The different forks may continue to exist as separate and independent blockchains, each with its own community.
  They always say that in war there is no winner, but in the case of a fork there are several: firstly, the pre-fork asset holders, who will find themselves in possession of the same assets on both chains, and secondly, the exchanges, who have always in the sunlight cashed in the forked tokens unceremoniously.
• Trapped: “The DAO”, was a DAO programmed by Slock.it, a decentralized version of Airbnb, and was launched on the 30th of April 2016.
  This DAO had enormous popularity, raising the record (at time) amount of $150m which was 15% of all the circulating Ethereum.
  After twelve days, one of the creators found a “recursive call bug with no risk”.
  But there was some risk, in fact, on 18th June an unspecified party managed to funnel 3.6m ETH into a nested DAO.
  Luckily, the token sale was set to last 28 days, so the Ethereum team had roughly two weeks to find a solution, in fact, after a direct proposal from Vitalik Buterin, a hard fork was implemented on 20th July: in other words, the blockchain was rolled back to a previous “The Dao” state.
  Ethereum has been split in two for the first time, and so has the community.
  The hacked funds are buried in the original “Ethereum Classic chain” for an amount of $8.5m.

Eloisa Marchesoni, your tokenomics expert