Some friends asked why there are so many public chains in Web3, such as Bitcoin, Ethereum, Base, Solana, and so on, and they completely can't figure it out. This year, let's try to sort out the development context of Web3 public chains.
First, let's talk about what a public chain is. A public chain is a blockchain network that is open to everyone, where anyone can read data, send transactions, or participate in the consensus mechanism. It is decentralized, transparent, and maintained collectively by users around the world, with no single entity able to control the entire system.
The development of public chains can be roughly divided into four stages, each addressing the limitations of the previous stage.
1. Bitcoin Public Chain
The first stage is, of course, the Bitcoin public chain, which began in 2009, and we also refer to it as Blockchain 1.0.
Why was Bitcoin created?
After the financial crisis in 2008, people discovered many problems with the traditional financial system, such as:
- Funds being controlled by banks and governments, making it impossible for individuals to truly control their assets.
- Excessive money issuance leading to inflation, affecting wealth storage, etc.
Thus, Bitcoin was born, and its goals are:
- Decentralization: No banks or governments control it; transactions are conducted peer-to-peer.
- Limited supply: Only 21 million coins to avoid inflation.
- Transparency and immutability: All transactions are recorded on the blockchain and cannot be modified.
Limitations of Bitcoin
However, it also has significant limitations, such as:
- It can only be used for transfers and cannot run complex applications.
- Slow transaction speed (only 7 transactions per second).
- High fees, with costs soaring during transaction congestion.
These issues gave rise to the next generation of public chains: Ethereum.
2. Ethereum Public Chain
The Ethereum public chain began in 2015, and we also refer to it as Blockchain 2.0.
Why was Ethereum created?
Although Bitcoin was successful, it could only be used for transfers and could not develop decentralized applications (DApps).
The goals proposed by Ethereum are:
- Support for smart contracts: Allow developers to write and run code on the blockchain, automatically executing protocols.
- Create a "app store" for blockchain: Not only can tokens be issued, but financial, gaming, social, and other applications can also be created.
Limitations of Ethereum
Ethereum also has its limitations, such as:
- Slow transaction speed (around 15 TPS).
- High transaction costs (Gas fees are too expensive).
- Severe network congestion, etc.
These issues also led to the emergence of Layer 2 scaling solutions and new public chains.
3. Ethereum Layer 2 Network (L2)
L2 is an extension of Ethereum, with its underlying structure still based on Ethereum, mainly emerging in 2021. Major representatives include: Arbitrum, Optimism, zkSync, Polygon, etc.
Why is there a need for Layer 2 scaling?
The reason for Layer 2 scaling is that Ethereum transactions are still too slow, and fees are still too high, limiting both developers and users.
The goals of Layer 2 networks are:
- Reduce transaction costs (lower Gas fees from dozens of dollars to a few cents).
- Increase transaction speed (process thousands of transactions per second, allowing DeFi, NFTs, and blockchain games to run more smoothly).
- Still rely on Ethereum's security.
The main solutions are Rollups and sidechains.
But Ethereum still faces challenges, such as:
- The network congestion issue of Ethereum itself still exists.
- Not everyone is willing to rely on Ethereum; some projects hope to establish their own independent public chains.
Thus, new public chains have emerged!
4. The Rise of New Public Chains:
New public chains began after 2020, with major representatives such as: Solana, Avalanche, BNB Chain, Sui, Aptos, etc.
Why is there a need for new public chains?
Although Layer 2 has alleviated Ethereum's problems, many developers feel:
Directly establishing a faster and cheaper public chain may be better than using L2.
Ethereum's upgrades take time, while new public chains can quickly fill market demand.
Innovations brought by new public chains
Indeed, new public chains have also brought significant innovations:
- High-performance public chains (Solana TPS 5000+, Avalanche 3000+).
- Low transaction fees (almost no Gas fees).
- More developer-friendly environments (Sui, Aptos use the Move language).
Challenges of new public chains
New public chains also face significant challenges, such as:
- Lower decentralization compared to Ethereum (e.g., some nodes in Solana are centralized).
- Security and stability issues (for example, Solana has experienced many outages).
- Network effects are not as strong as Ethereum (developers and funds still trust Ethereum more).
The goal of new public chains is to provide faster and cheaper chains, but they still need to continuously improve decentralization and security.
Summary: The Evolutionary Path of Public Chains
To summarize:
Bitcoin (BTC) → Solves the problem of centralized finance but can only transfer funds.
Ethereum (ETH) → Solves the problem of Bitcoin being limited to transfers by introducing smart contracts, opening the Web3 era.
Ethereum Layer 2 (L2) → Addresses Ethereum's slow transactions and high fees, enhancing scalability.
New public chains (like Solana, etc.) → Directly create faster and cheaper blockchains, challenging Ethereum's position.
Currently, Ethereum remains the most important public chain, but the rise of new public chains and L2 will continue to drive the development of the entire Web3 ecosystem.
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