Blockchains are considered hugely useful for storage-friendly applications but not the same when it comes to storage-intensive applications. let's see why
Many believe that general-purpose blockchains like Ethereum, Cardano, Avalanche, and Solana will run anything on the web, including financial apps, social apps, and even marketplaces like Amazon. But there's one show-stopping issue that's been largely ignored: on-chain storage. While current general-purpose blockchains have performed well for storage-friendly applications such as decentralized finance (DeFi), they cannot be upgraded for storage-intensive applications such as social and marketplace applications. Imagine a world where every "like" or "follow" remote app costs $1.00 + storage fee.
Unfortunately, that reality is now due to the storage limitations of all general purpose blockchains on the market today. For Web 3 to reach its full potential to destroy Web 2 and past systems, a new blockchain architecture is needed.
From state to state
- Currently, all general purpose blockchains on the market are designed to run what we call finite state applications. This is an app where there is a limit on the amount of data or status you should have for each user. For example, to build a finance app, all you need to do to confirm a transaction is to know the balance of each user. Users can transfer funds millions of times, but in the end all you have to do is keep a few numbers that show each user's final balance. In other words, the state you need to maintain increases with the number of users, not the number of transactions.
- Surprisingly, almost all DeFi consists of apps with constrained states. What if we wanted to look beyond finances? Unlimited apps are apps where the amount of data to be stored increases indefinitely with the number of actions that each user performs. For example, consider a typical social app: users can create accounts, post, follow people, and other similar things, all of which add to their status.
- The difference is that in social apps, all transactions are status-enhancing and not neutral, as is the case with DeFi. With social networks, not only do you need to have lots of bank balances in your state, but you also need to be able to store an unlimited amount of data. Worse, this condition often has to be requested by other users on the network, which requires high accessibility.
- In order to meet the storage and indexing requirements of endless applications, blockchains must be adapted to applications, such as DeSo for a decentralized social network. This is because without assumptions about the type of data stored, the costs of storing, indexing, and querying data will skyrocket, making chain-based applications uncompetitive.
- The cost of storing just 1 gigabyte of state on the circuit varies greatly between blockchains. Importantly, these costs will only increase for multipurpose units as they are not designed to scale storage.
- This high cost of chain storage prevents most Web-2 applications from being deployed on today's general-purpose blockchains, even when using bridges to storage-oriented blockchains such as Arweave or Filecoin. At current prices, even maintaining a simple connection to Arweave or Filecoin in a general-purpose chain cost $0.10 to $1.00+, which is very expensive.
- In addition, while many blockchains claim to be able to process thousands of transactions per second (TPS), this metric does not take into account the storage characteristics of applications. There's a huge difference between 50,000 DeFi transactions that can generate zero bytes of new state data compared to 50,000 social transactions that can generate dozens of megabytes that need to be stored, indexed, and queried.
- Today's state-of-the-art blockchains fail miserably while processing the latest types of transactions. These restrictions block the development of some of the most interesting Web 3 applications. We at DeSo Foundation have examined this challenge and have come to the conclusion that all memory-intensive Web 3 applications, such as
- The difficulty of storing and indexing data in a scalable way is underestimated by most crypto spaces. For a long time, all space has been restricted to finite-state applications without paying much attention to the various infinite-state applications, such as social and marketplace applications, which make up the bulk of Web-2 applications.
- For Web 3 to reach its full potential to disrupt Web 2 and earlier systems, a blockchain specifically designed to support new applications is required because of the storage and indexing limitations inherent in existing general-purpose chains.