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The blockchain data structure was actually invented by Dr. Stuart Haber and his colleagues back in the early 1990s and was supposed to be used for digital document timestamping. It wasn’t until late 2008 when Satoshi Nakamoto, the pseudonymous creator of Bitcoin, proposed using blockchain or distributed ledger tech (DLT) to serve as part of the foundation for the Bitcoin protocol and network. In mid-2015, Russian-Canadian programmer Vitalik Buterin and many other colleagues introduced Ethereum, which is a more advanced blockchain-based network because it also features smart contracts.
This added functionality makes Ethereum Turing Complete, which basically means it can be used to build and deploy decentralized applications (dApps). At present, Ethereum is in the process of transitioning from the computationally-intensive proof-of-work (PoW) consensus algorithm to a proof-of-stake (PoS)-based blockchain consensus mechanism. This should address the significant (lack of) scalability issues that Ethereum is facing. If you’re an active ETH network user, then you may have seen how impractical it can become to conduct crypto transactions with ERC-20/ERC-721 tokens, due to the exorbitant gas fees.
Addressing the Blockchain Trilemma: Security, Scalability, Decentralization
In addition to high fees, transactions can take a very long time to complete. Then there’s also the issue of front-running, where certain users may get ahead of the queue by paying higher fees, so their transactions can be (unfairly) prioritized over other users who may be waiting for a very long time. Clearly, these problems need to be addressed if Ethereum and other smart contract platforms want to deploy enterprise-grade dApps and support mainstream adoption.
Polygon has emerged as an effective L2 scaling solution and its team has been fairly successful at enabling improved performance of the dApps that leverage its technology. In addition to Polygon, Avalanche (AVAX) has also been quite effective at allowing software architects to create high-performance dApps. Other L1 chains such as Binance Smart Chain (BSC), Cardano (ADA), Algorand (ALGO), Telos (TLOS), among many others, have developed unique solutions that are supporting the decentralized finance (DeFi) and Web 3.0 economy.
We’re in the middle of an unprecedented digital transformation that’s being led by blockchain-powered platforms that have made many processes a lot more efficient. The rise of blockchain or DLT has made it possible for people to mint non-fungible tokens (NFTs), create sophisticated gaming apps, and also be used in advanced trade finance processes. However, software architects realize that a truly robust blockchain must be adequately decentralized, provide a high level of security, and be scalable – which means it should be able to process a large number of transactions in an efficient manner.
Combining the Best of Bitcoin and Ethereum
One innovative project, called Syscoin, claims that it offers the best of Bitcoin (BTC) and Ethereum (ETH) via a single coordinated platform. As explained by its creators, Bitcoin’s proven security and Ethereum’s Turing-complete programmability is leveraged by Syscoin to enable true L2 scalability via ZK-Rollups.
The Syscoin developers have noted that they offer a unique and legitimate alternative to Ethereum that isn’t available when working with other smart contract chains in the market. According to its development team, Syscoin allows you to do everything that can be done with Ethereum via their Network Enhanced Virtual Machine (NEVM). But it’s worth noting that Syscoin’s innovative design aims to keep intact the “gold standard” security of the BTC consensus model and merged-mining, while offering the high-performance capabilities expected when Ethereum 2.0 (finally) goes live and adds L2 ZK-Rollup technology.
In addition to these privacy and scalability enhancements, Syscoin offers what they refer to as opt-in features that may give projects the ability to ensure regulatory compliance at scale for their crypto-asset’s transfers, all without relying on custodians. This is arguably unique and might be used to support digital securities such as tokenized stocks (and security tokens) and allow traders to safely participate in DeFi, perform transactions via DEXes, or other nascent Fintech in a compliant manner.
Syscoin Foundation Supporting Ongoing Development, Masternodes
In order to support the project’s development, the Syscoin Foundation has been established and it serves as the official entity representing the Syscoin Platform. The board is reportedly responsible for the steady growth and adoption of the platform, and its members are expected to provide guidance and also fulfill a steering role in the initiative’s development.
As noted by Syscoin developers, their native SYS token may be used as gas for conducting transactions. The crypto token may also be used for deploying smart contracts and submitting governance proposals.
It’s also possible to create a Syscoin Platform Token (SPT), which is a custom asset token that uses the Syscoin Token Platform. Additionally, users can collateralize a masternode, and thereby get rewards for contributing to network services like Z-DAG, and vote on governance-related proposals.
As explained by its creators, the Syscoin Platform utilizes masternodes as a source of bonded validators, a globally-accessible resource pool, and also a means of decentralized governance. As noted by its developers, Syscoin Masternode owners are able to take advantage of scheduled seniority bonuses along with standard block rewards.
Notably, Syscoin is unique and stands out from competitors such as EOS, Polkadot (DOT), Tezos (XTZ), and Solana (SOL) in that it has developed a modular structure for enhancing scalability. Syscoin is also able to increase POW security with a Finality function. Additionally, it is trustless, and holds a TPS of 210k, while adopting an inflation-based cost model.
Overall, Syscoin aims to combine the best of both worlds (Bitcoin and Ethereum) in order to provide users with a network to build and deploy highly secure, reliable, and fast Web 3.0 apps. It’s becoming clear that the future of finance and Internet-based transactions can benefit tremendously from decentralized solutions that enable adequate levels of privacy, while not compromising on security or performance. For these reasons, Syscoin is set to play a key role in supporting the blockchain-powered Web 3,0 ecosystem.