From 2018 to the present, I have been a long-term optimist and supporter of Nervos, and after continuous observation, I feel that it is close to a certain turning point, just one flame, it will start a prairie fire.
Different people may have different opinions, but I have always been optimistic about it. This article mainly explains the logic (including technology and investment) that I am optimistic about Nervos and why I think Nervos is about to usher in an explosion.
Nervos brief introduction
First of all, in case anyone doesn't know, here is a brief introduction to Nervos.
Nervos Network is an open source blockchain network that solves the scalability problem of blockchain through a layered architecture design. Among them, Nervos CKB is a PoW-based underlying public chain in the network that supports smart contracts. Nervos CKB is naturally friendly to Layer 2, and the native token CKBytes captures the value of the entire network through the encryption economy design of "value store".
In vernacular terms, Nervos implements Ethereum 2.0 on the basis of Bitcoin and becomes the infrastructure of the encrypted economy. I will also focus on this point below.
If you want to know more details, see the official positioning white paper
Technical analysis logic
Ethereum is becoming more and more like Nervos
Before talking about Nervos, I want to talk about the blockchain technology route.
Bitcoin, as a digital gold, has a very stable position as a store of value. In addition, everyone uses it the most, discusses it the most, but also complains the most is Ethereum Gas fees are high, performance is not enough, and so on. Users generally have to pay tens of dollars in fees for ordinary transfers, hundreds of dollars in fees for participating in DeFi.Ethereum has been suffering for a long time.
How to solve the problem of scalability and high transaction fees of Ethereum is a problem that the entire community has been discussing. Everyone thought that ETH 2.0, that is, sharding is the final solution, but in October 2020, Vitalik was in the Ethereum Magician The "Rollup-centric Roadmap" was published on the forum, indicating that the original ETH 2.0 roadmap has undergone drastic changes.
The reason for this is also relatively clear. The cross-sharding and sharding mentioned in the previous roadmap are difficult to implement and cannot be implemented in the short term. In addition, the technical solution of Rollup has appeared in the community, which solves the problems of Plasma. The issue of data availability turns the on-chain computing + storage paradigm into on-chain lossless compression and off-chain large-scale operations. As long as light verification is performed on the chain, this solution can allow Ethereum to have great scalability.
Taking a closer look, Ethereum’s short-term strategy will be transformed into a Layer 1 Ethereum 1.x + Layer 2 Rollup based on the PoW consensus, and in the future will be transformed into a PoS consensus based Layer 1 Ethereum 2.0 + Layer 2 Rollup in the long term. As for the need for fragmentation and whether it can be achieved, a huge question mark is needed.
Everyone knows that Nervos put forward the concept of layered architecture at the beginning of the project in 18 years, and the strategy of Ethereum's transformation is actually more and more similar to Nervos. Nervos CKB was originally designed for a layered architecture, a sufficiently flexible, decentralized, and secure underlying network, and it has been exploring this direction for 3 years.
As time changes, more and more people recognize the layered technical route taken by Nervos, and according to the official 2021 roadmap, the Layer 2 Rollup framework Godwoken on CKB will be launched soon, which is undoubtedly a huge benefit for Nervos.
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Nervos unique and compatible cross-chain solution
After talking about the technical route of Nervos, I want to talk about the uniqueness of Nervos.
Everyone is familiar with the concept of cross-chain, from Polkadot to Cosmos, and various cross-chain bridge technologies with Ethereum and Bitcoin. However, there is a problem with these solutions on the market. These cross-chain technical standards are mutually exclusive. The time is fragmented, and this leads to a fragmented user experience.
For example, if a user wants to transfer bitcoins to Ethereum to participate in DeFi, he needs to use 2 wallets and memorize 2 sets of mnemonic words, because this belongs to 2 different account systems. This is actually not friendly enough for users. If the account system becomes more, the combination of different wallets and the mutual transfer of assets will become a very troublesome thing.
Thanks to the unique design of the bottom layer of Nervos CKB, it can be compatible with all these cross-chain standards on the market. Users can access any assets through any entrance, and users can access different chains and There is no perception of the mutual flow of assets.
This is the unique and compatible cross-chain solution that only Nervos can do, interoperability 2.0.
Interoperability 2.0
CKB does not care what chain or wallet you are using. All solutions are compatible. Everything is done for you. CKB improve the user experience and lower the user threshold. Users do not need to create a new account system and learn new things. CKB is compatible for you.
If this still doesn't move you, then let's talk about something heavier.Blockchain users are only a small part of Internet users. Many Internet users want to enter the world of blockchain, but due to the complicated threshold of learning wallet knowledge and creating and storing mnemonics, they are forcibly blocked.
Everyone is accustomed to accessing various Internet applications through fingerprint recognition, face recognition, etc. It is convenient and simple, and CKB is compatible with these existing Internet standards. That is, users can generate encrypted accounts and manipulate encrypted assets through biometric methods such as face, fingerprint, iris, etc. through the browser and mobile terminal. The operation process is exactly the same as that of Internet applications. They can completely forget the concepts of public and private keys and mnemonic words. The user threshold is zero.
CKB is also compatible with the standards of Email and passport. Imagine that your Email and your passport are your encrypted accounts. You can receive and send digital currency through Email and passport. Users do not need any migration costs. A large number of Internet The users have become potential users of CKB.
And if you can cut a small hole from the Internet ecology and introduce Internet users into the blockchain world, even if it is only 1%, it will inevitably bring earth-shaking changes to the blockchain world. This is what Nervos will do!
What Nervos has done
After talking about the vision, let's talk about what Nervos has done.
Ethereum address accepts mainnet CKB
At present, you can accept the mainnet CKB Token through the Ethereum address, enter any wallet that supports dApp browsers, enter CKB.PW , and you can see the CKB wallet corresponding to your Ethereum address.
Transfer CKB to each other under various blockchain addresses
Another test version of CKB Demo, which can transfer money to each other under ETH, EOS or Tron addresses, has already launched the testnet, and will support more other blockchain project addresses in the future. Any blockchain address can be the address of CKB, this is not just talking!
Cross-chain Dex
The technical components required to support interoperability 2.0, Force Bridge, Polyjuice, and PW-Core will be launched in the first half of 2021 (PW-core has been completed), and now there is an Orderbook beta DEX that reflects interoperability 2.0 For everyone to experience: GliaDex
As long as through a wallet, a transaction, you can complete the cross-chain transaction of ETH and Token on CKB. With more and more public chains connected in the future, this ecological effect will definitely give CKB a huge empowerment.
The team is currently developing an AMM version of DEX. According to official sources, it will be online soon to meet you.
There are a large number of such wonderful dApps that only Nervos can do. They will come out to empower the Nervos ecosystem. There is no reason not to be optimistic about Nervos.
Nervos has the best solution to state explosion
Vitalik recently published an article on the state of the explosion and how this issue should be better article . State explosion is a problem that is not obvious in the short term, but in the long term, will have a huge impact on the Ethereum ecosystem. The community is worried about this problem and thinking about solutions.
State explosion simply means that as the blockchain runs, the state and data on the blockchain will continue to increase. Although historical data can be tailored, its state cannot be deleted, and will only increase over time. more. The user does not pay for the state itself. The node in the blockchain network bears the storage cost. This is a typical commons tragedy in economics, where limited public resources are unrestricted and excessive consumption.
The uncontrolled exponential accumulation of data makes the storage resources required for the operation of full nodes larger and larger, raises the threshold for full nodes, reduces the number of full nodes in the network, and makes the network more and more decentralized Low, thereby affecting the security of the network.
This is still the accumulation of state data when Ethereum has not achieved expansion. In the future, with the improvement of network performance, the amount of data will increase significantly, and the problem of state explosion will become more obvious.
This time Vitalik mentioned some solutions, including state leases and stateless clients, but the design complexity and security issues of state leases, as well as the availability of stateless client data, have determined that they will not be the last solution.
So what is a better solution to state explosion?
Nervos proposed a more concise and beautiful solution, namely its unique economic model, which is one of the reasons why I was deeply attracted by Nervos.
The Nervos economic model regards the storage space on the chain as a public resource. Each token CKB represents 1 Byte of storage space. The holder can write any data or contract into this storage space. If he does not need it, You can also choose to delete this part of the data.
Nervos CKB's token issuance is divided into two parts: basic issuance and secondary issuance. The basic issuance is similar to the Bitcoin issuance strategy. It has a hard cap and the block reward is halved every 4 years until it is mined by miners. The secondary issuance is a reward for constant additional issuance, a fixed amount of CKB is issued every year, which will continue as the network runs. There is also a role of Nervos DAO in the Nervos CKB economic model. Long-term investors can put CKB in Nervos DAO to obtain a certain amount of interest, thereby resisting the inflation effect caused by secondary issuance.
The secondary issuance is a very bright spot in the Nervos economic model. Its operating principle is based on the number of CKBs occupied in the network (ie the number of CKBs that have written data), the number of CKBs locked in Nervos DAO, and the number of CKBs in the network. Proportionally distribute the CKB generated by the secondary issuance, and give the generated Tokens to the miners, Nervos DAO and the Community governance, currently this part of Tokens are directly destroyed.
The secondary issuance here is a kind of "inflation tax". The essence is to charge for state occupation. If you use CKB and store relevant data in it, you need to pay for the storage space occupied, and this cost is to bear the secondary issuance The resulting inflation loss.
Unlike the state leasing scheme proposed by Vitalik, which is complicated and has security risks, the design of the Nervos economic model is simple and easy to understand, and the amount of network data storage is completely predictable, which greatly reduces the cost of full node participation and is beneficial to increase The degree of network decentralization increases network security.
Now on the market, you can see that many teams are learning from Nervos economic model. There will always be more and more people on the right path, and Nervos is the first original creator.
Investment analysis logic
Regardless of technical details, from the perspective of investment and good news, Nervos meets many conditions. I will analyze them one by one.
Nervos is the most capable PoW coin after Bitcoin
PoW and PoS will definitely coexist for a long time, but because of their different characteristics, they will be applicable to different scenarios. PoW is naturally suitable for a neutral, objective, and globally shared Layer 1 due to its openness and thorough permissionlessness, while PoS is more suitable for some blockchains that require performance and specific aspects.
While everyone was talking about the PoS project, only Nervos was firmly holding the PoW banner and moving forward. In terms of financial strength, team technical strength, and technical route, on the PoW track, apart from Bitcoin, Nervos is undoubtedly the most successful project.
From the logic of investing in the track, apart from PoS, of course PoW projects must be deployed, and the current market value of Nervos is obviously underestimated.
Some people here may say that the price increase of Nervos is unsatisfactory, but when a PoW chain is launched in the early stage, it will be difficult. It needs to face the selling pressure of miners and pressure from all aspects. Unlike PoS, it can be quickly Pull up the price.
I believe that Nervos should be listed on Coinbase soon. It is unclear when it will be listed , but this is undoubtedly good news for Nervos. Empire was not built in a day, we just need to be patient and wait for Nervos to shine, and this day is not too far away.