What’s the current state of the blockchain/cryptocurrency space?

It’s been over 15 years since Satoshi Nakamoto released the Bitcoin Whitepaper. Today thousands of blockchains exist serving as payment systems and frameworks for logistics. Projects offer access to new technology such as decentralized finance, NFTs (non-fungible tokens), and DAOs (Decentralized Autonomous Organizations). What began as a peer-to-peer currency system has now evolved into an entirely new internet – Web3.

Yet, despite ongoing innovations, Satoshi’s original vision seems to have been overshadowed. Many new blockchains prioritize faster and cheaper transactions, often at the expense of the core principles of trust emphasized in the Bitcoin Whitepaper.

Common industry sentiments include:

  • We need to onboard the next billion users.
  • The best blockchain will use the best technology.
  • Blockchain fees price out users from the decentralized future.

While everyone desires the best blockchain — one that is fast and affordable — this pursuit often overlooks the most crucial element: decentralization. The very reason cryptocurrency is necessary. Decentralization means that no single entity has control over the network, power is distributed among many participants, and decisions are made collectively.

Today, out of thousands of blockchains, only a handful can truly be considered decentralized. Even among those, the definitions of decentralization vary greatly. Ideally, decentralization would mean that every single person in the world runs a node. In contrast, the worst-case scenario would be a network sustained by a single server, leading to security risks, increased vulnerability to attacks, and censorship. We can have both decentralization and the best technology, but this requires action and innovation.

As the blockchain space continues to grow exponentially, decentralization has struggled to keep pace. If blockchain innovation ignores network stability, there will be no reason to use cryptocurrency over other currencies.

What’s the inspiration behind Fiftysix?

  • How can we make the cryptocurrency space more accessible?
  • What types of solutions benefit all actors: users, developers, researchers, companies, and investors?
  • What can we do to address critical issues within the blockchain space that other companies are overlooking?

Today, companies are racing to create the next blockchain or decentralized application (dApp) for mass adoption. These projects require immense effort and resources, involving team building, drafting whitepapers, eventually launching, and ongoing maintenance. Even after launch, continuous business development, developer acquisition, culture creation, and innovation are essential to keep the blockchain and its applications relevant.

We realized that the most crucial element to these projects is often overlooked. To properly create and sustain a blockchain, teams need to ensure their network is efficient, resilient, and uncensorable. In essence, teams must prioritize decentralization. The two most valuable and powerful blockchains in the world, Bitcoin and Ethereum, derive their value from this network effect.

Once a sufficiently decentralized network is achieved, users, developers, and researchers can focus on advancing on-chain technologies without worrying about the stability of the chain itself.

Decentralization is the cornerstone of blockchain technology and has been since Satoshi released the Bitcoin whitepaper. It ensures that no single entity controls the network, distributing power among many participants. This distribution is essential for maintaining trust, security, and resilience.

A decentralized network is less vulnerable to attacks, censorship, and failures. It empowers communities to innovate freely, knowing that the foundation they build upon is solid and secure.

While others focus on creating the next best blockchain or dApp, we envisioned supporting their networks’ decentralization. The space will not reach mass blockchain adoption until its networks are properly distributed and resilient.

Overall, Fiftysix believes in enabling a more secure, trustworthy, and innovative blockchain ecosystem by pioneering decentralization.

What’s next at Fiftysix?

Our current focus is on tackling the problem of blockchain node provision to enhance decentralization in the space. Many companies today provide nodes on behalf of users by running them on shared infrastructure, often relying on larger providers like Google Cloud or AWS. While this is convenient for users who lack the necessary machines, it creates single points of failure and undermines the core principles of blockchain decentralization.

To address this, Fiftysix is adopting a different approach. We enable users to run blockchain nodes on their own infrastructure, ensuring ease of use while promoting network decentralization. By doing so, Fiftysix provides users with seamless access to interact with their necessary blockchain and simultaneously strengthen the underlying network – a true win-win scenario.

For users who cannot provide their own infrastructure, Fiftysix is committed to offering an open solution that allows anyone to interact directly with the blockchain. We have observed that the needs of users who want to run a node do not always align with those who simply wish to interact with the network. Therefore, Fiftysix will cater to both groups, providing infrastructure for those eager to support and engage with the network directly, while facilitating network interaction for others.

Moreover, Fiftysix will ensure that interactions with these networks are as fluid as possible, improving the overall user experience managing cryptocurrencies and networking in the blockchain space.

Fiftysix is developing open source software to achieve this. Find out more here.

Looking ahead, Fiftysix plans to introduce local wallet management, cryptocurrency staking, and eventually currency onboarding. These future improvements aim to further empower users and fortify the blockchain ecosystem.

Fiftysix is dedicated to pioneering decentralization and building a more secure, trustworthy, and innovative blockchain environment.

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Learn more about Fiftysix.

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