What came first, the chicken or the egg?
The cryptocurrency ecosystem is large and difficult to navigate, and the technology is complex. How can we build on blockchain technologies unless we understand them? Which comes first, building or learning? At Fidelity, our Blockchain Incubator believes building and learning have to be done simultaneously.
One of the many ways we participate in this rapidly changing ecosystem is by working with various academic institutions to collaborate on research. We recently joined forces with MIT Media Lab’s Digital Currency Initiative to host a two-day event focused on Layer 2 scaling solutions, the L2 Summit.
The first day of the Summit was focused on education, bringing together 15 speakers to discuss the research & protocols being built to help address the scalability issues blockchains currently face. Some of the topics discussed were atomic swaps, state channels, lightning network & scriptless scripts. It is impossible to sum up the wealth of knowledge shared on that day in one blog post, but you can watch the video to decide which topic is your favorite.
On day two, we went to the MIT Media Lab, where 80 people participated in a hacking day, building with Layer 2 technology they learned about the day before. While five teams presented their demos, the Lightning Liquidity team took the win.
The vibe of this two day summit was electric. Attendees were enthusiastic about what they heard, excited for the future, and happy to be involved. It was humbling to meet people, both Fidelity associates and external participants, who traveled to Boston specifically for the event. It showed how truly valuable education is and how hungry people are for it.
Why Layer 2?
We hosted the L2 Summit because we believe that blockchain is a powerful and transformative recordkeeping technology, but currently faces significant scaling limitations. Some of the most promising solutions for expanding the transaction capacity of blockchains are so called “Layer 2” implementations. In essence, Layer 2 solutions create a separate network for transaction activity and only use the main chain for final settlement.
When Cryptokitties launched at the end of 2017, the Ethereum network was besieged with high gas prices, network slowness, and failed transactions. Bitcoin has experienced similar congestion and rising fees.
How can this technology be adapted to handle mass adoption, such as for daily transactional use? The promise of blockchain technology is easy to comprehend, but developing solutions is much more difficult. For a more in depth analysis of Layer 2, see MIT Digital Currency Initiative Director Neha Narula’s helpful overview.
Building or learning? Chicken or egg?
Building is essential in the blockchain space—we wouldn’t have anything without the incredible developer community. But, in order to build, it’s important to understand the complexities and current limitations. This is why our Blockchain Incubator is equally focused on building and learning. And, here we are, back to the chicken or the egg.
Although we can’t solve the philosophical debate of the chicken or egg, through education and knowledge sharing, we believe we can provide our associates and community with the skills needed to successfully build in this complex ecosystem.
We hope to host more public events in the future. Follow us on Twitter @FidelityLabs for upcoming news and events.