In my recent post on the differences between layer 1 and layer 2 scaling, I ended up roughly coming to the conclusion that the most important differen

Layer 2s as cultural extensions of Ethereum

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2024-05-30 06:00:03

In my recent post on the differences between layer 1 and layer 2 scaling, I ended up roughly coming to the conclusion that the most important differences between the two approaches are not technical but organizational (using the word in a similar sense to the field of "industrial organization"): it's not about what can get built, but what will get built, because of how the lines between different parts of the ecosystem are drawn and how that affects people's incentives and ability to act. In particular, a layer-2-centric ecosystem is inherently much more pluralistic, and more naturally leads to a greater diversity of different approaches to scaling, virtual machine design, and other technological features.

Because Ethereum is a layer-2-centric ecosystem, you are free to go independently build a sub-ecosystem that is yours with your unique features, and is at the same time a part of a greater Ethereum.

In this post, I argue that this is true not just with respect to technology, but also with respect to culture. Blockchains do not just make unique technical tradeoffs, they also have unique cultures. On the day after Ethereum and Ethereum Classic diverged, the two blockchains were exactly the same technologically. But they were radically different culturally, and this fact helped to shape the distinct focuses, user bases and even tech stacks that the two chains have eight years later. The same applies to Ethereum and Bitcoin: at the beginning, Ethereum was roughly "Bitcoin but with smart contracts", but the set of differences grew into something much deeper ten years later.

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