This article comes from The Generalist, compiled by Odaily translator Katie Koo.

This article comes from

, compiled by Odaily translator Katie Koo.

A bull market makes more money, and a bear market learns more.

Just a few months ago, a16z Crypto partner Chris Dixon called blockspace the “best product” of the 2020s. We had the pleasure of having the head of cryptocurrency at a16z explain further why this is said and what we can do about it.

Here's what investors, operators, and founders should know about the blockchain space.

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1. What is block space?

The blockchain is built differently: using a consensus mechanism, the software is "in charge" of the hardware.

Blockchain entrepreneurs make strong promises about the future behavior of the product by writing software code.

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2. This is an interesting expression. I've never seen this discussed before in terms of the relationship between software and hardware, what you're really talking about is control, right?

Compare Bitcoin. Bitcoin promises that there will only be 21 million bitcoins, and this rule is embedded in the architecture (code) of the Bitcoin blockchain. Even if many people running the Bitcoin code (miners) tried to subvert these rules, it would be difficult to do (hardware control is too decentralized).

This is where blockspace differs. Developers and entrepreneurs building on the blockchain ecosystem need to know this rule, they will not be controlled like traditional technology companies.

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3. What are the most important considerations when designing a block space (manufacturing a public chain)?

Another important feature is performance. This has to do with the fees paid when transacting on the blockchain. These costs can be reduced by producing better performing systems. Some argue that there is a tradeoff in security for performance. But obviously, security and performance are top priorities. Another issue to consider is the community surrounding the blockchain. Ethereum is an example of a healthy developer community. Other blockchains focus more on speculation and gambling, which I don't think is healthy.

So, on the one hand, blockchains are computers, so their security and performance is important; on the other hand, they are also social networks that need to focus on building healthy communities.

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4. What are the most interesting and potential ways to scale the blockchain and its space?Blockchain scalability is a hotly debated topic.some chains,

Like Ethereum, it is believed that the best way to grow the block space is through L2. If they are architected correctly, L2 inherits the security properties of L1 and still has the strong security guarantees of Ethereum. They also provide additional block space capacity on top, and Dapps can run with lower gas fees. There are some good L2s out there: Optimism, Arbitrum, zkSync, Aztec, and Starkware.

Another approach is the underlying system design.For example, Solana is trying to achieve all scale at L1.

There are also cross-chain bridges currently available to make chain interoperability, sending assets and messages back and forth feasible.

In terms of which is the best way to increase the block space supply, my personal opinion is that these three main approaches outlined above can be used in a mixture.

secondary title5. In the article "Consensus Capital Market" written by Leo Zhang, Zhang believes that block space will become "the central commodity of the metaverse". Nothing seems to require scale more than running a parallel universe on-chain. What do you think? Is the metaverse the main scene in the blockspace discussion?

The "Metaverse" describes a range of emerging technologies, including Web3, VR, and even the development of the Internet in general.

The Metaverse can be considered the next wave of the internet.

Will it be controlled in a centralized way by a large corporation (like Meta), or will it be decentralized like the early Internet?I think block space is an emerging and critical computing resource, which is juxtaposed with traditional computing resources such as bandwidth, storage, and computing.

If the vision of Web3 is realized, block space may become the most important new computing resource in the 2020s.

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6. The analogy we are currently using is based on traditional computing, what do you think about other frameworks? For example, some argue that block space should be considered a commodity like land, oil, or grain. Will the block space also have a trading market? To what extent will we see this new species being financialized?

In my opinion, most of the block space is non-fungible, which will limit its financialization.

I'd love to see innovations that help make block space auctions more efficient and fair. There are already gas auction systems that financialize block space on a single chain (such as Ethereum).

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7. You mentioned improvements to the auction, what have you been most excited about lately? Where else do you see opportunity?

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We have been focusing on innovations in core L1. For example, we are involved in several Meta-spin-off projects with interesting distributed system innovations. As a method to improve the performance and privacy properties of blockchains, zero-knowledge proofs have also made good progress, and we are actively investing in them. L2 also has a lot of interesting developments. The cross-chain bridge that connects everything together is also important.We still need to improve the experience for new users. There are tons of inconveniences around wallets, custody, key recovery, and key management. Demand for better security and performance is also increasing.I expect blockchains to follow a common pattern of previous computing waves:

That's why when you build another lane on the highway, there tends to be more traffic; people build more shops in the area, which attracts more traffic. A similar dynamic will emerge with blockchain.

The interest and opportunity to innovate and scale up more infrastructure over the next 10 to 20 years will be endless.

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8. You once said, “Blockspace was the best selling product of the 2020s.” What does that mean? What signals should other builders and investors take from it?

Selling block space will be a good business in the 2020s, just like selling PCs and broadband in the 1990s and early 2000s, and cell phones in the past decade.Blockchain is finding its super application. Following the internet crash of the early 2000s, many questioned the need for all the bandwidth that had been built up in previous years. How much does it matter just to get emails faster? And in the mid-2000s, applications like YouTube gave meaning to even greater bandwidth, opening up further innovations. Blockchain and blockspace may be in a similar situation, with a breakthrough on the horizon.

We are currently entering a financial recession, perhaps similar to the early 2000s. But now is the time when we are entering the golden age of entrepreneurship. Time to figure out what would be YouTube or Netflix using block space? What killer apps will drive this computing wave forward?