📰NewsThis week, the team behind Filecoin launched a test network and laid out a schedule for a real mainnet launch as early as March 2020. Filecoin, you might remember, raised over $200 million at the height of the ICO madness of 2017. Since then, they've been relatively quiet, supposedly hard at work building the blockchain based decentralized storage network they promised. Earlier this year, the team open sourced their code and launched an early development network. This announcement suggests they've progressed significantly since then, and are closing in on a real launch. Link.
Why is Filecoin an important project? It aims to fill a huge void in the burgeoning decentralized ecosystem: data availability. On most decentralized crypto networks, storage space comes at a huge premium. This is for good reason! Data stored on a blockchain must be replicated across all nodes and propagated throughout the network. On the Filecoin network, normal users can pay miners to store their data and make it available. The more hard drive space miners make available, the more "hashpower" they receive— that is, the more likely they are to produce a block and receive a reward. To enable this, Filecoin relies on two novel consensus mechanisms known as Proof-of-Space-Time (PoST) and Proof-of-Replication (PoRep). Both of these are brand new and untested, so Filecoin's ultimate success is very much up in the air. If it is successful, Filecoin would give developers a poweful new tool in their toolbelt: reliable, cheap, censorship resistant data storage. Link.
In other news, the Ethereum core developers have finalized the changes that will be included in the upcoming network upgrade, codenamed Istanbul. The hardfork date has been set for October 2nd on the Ropsten test network, while the mainnet hardfork can be expected in the first quarter of 2020— perhaps as early as January. Amongst the proposals that will be included in the upgrade is EIP-1884, which changes the fees charged for certain computationally intensive smart contract interactions. This risks breaking certain contracts on the network, but the core devs have promised to "fix" any major issues in a future upgrade. Left out of this upgrade is a change to the ProgPoW hashing algorithm for mining new blocks. The contentious change is now scheduled for the next upgrade, codenamed Berlin, but faces stiff resistance from a large segment of the Ethereum community. Link.
The early part of 2020 is shaping up to be a critical period for crypto project launches. We've known for a while that Phase 0 of Ethereum 2.0 is supposed to go live then. Now, the Ethereum core devs have signaled the Istanbul hardfork will take place then as well. Some other high profile projects, such as Polkadot, are expected to go live in that time. Rounding it out, we now have Filecoin, a hotly anticipated and hugely important venture, announcing their mainnet will launch sometime in March. There's never a dull moment in this industry, but that's a frenetic stretch even by crypto standards.
It's amusing to me that these pivotal milestones are approaching amidst a steep drop in prices. While the few investors who are still paying attention to crypto seem to be busy panic selling, essential work is being done by a quiet army of devs. That's not to say these projects are guaranteed to be successful. Not by any stretch! It does feel to me, though, (as it has for a while), that prices are completely decoupled from the reality what's going on. That certainly applied in one direction during the 2017 hype cycle. Perhaps it applies in the other direction today.
Regardless, I think 2020 is going to be a crossroads for crypto. Ethereum 2.0, Polkadot, and Filecoin are all ambitious projects aiming to provide decentralized, scaleable, layer one protocols. If they all fall flat, it may mark the end of innovation at that level of the stack. The industry may turn its focus to trust-minimized layer two solutions built on Bitcoin and Ethereum 1.0.
On the other hand, if two or three of these projects succeed, 2020 might be the year we later look back on as a turning point. Will it be the year crypto morphs from its primordial form to something resembling its final one? I'm not sure! As regular readers have come to expect by now, there's only one thing I can promise you: there are interesting times ahead!