In the course of observing an innovation process with its whirring and whistling, periodically we come to a one-way door. Once we walk through that door, we can never go back.
The invention of Bitcoin was such a door. Overnight, the power of nation states to monopolize the issuance and distribution of currency dissipated. The democratization of issuance of digital assets logically followed, and as a species we are now in a fundamentally more advanced leg of our technological innovation journey.
Between the invention of Bitcoin and Ethereum, there were many projects that allowed for token issuance beyond Bitcoin. Projects like BitShares allowed custom token supplies with a small number of predefined functionalities to be minted on their platforms, as long as you married that blockchain network. Namecoin was an early Bitcoin fork and precursor to systems like ENS, which allowed naming records to go on-chain. Colored Coins and efforts like Counterparty showcased the early expansion of token issuance and were the precursors to NFTs.
But the moment the industry walked through the door of Ethereum’s Turing-complete smart contracts in the summer of 2015, these important and directionally correct innovations were left behind. The generality of Turing-completeness subsumed them all, and it was obvious that we would never return to that predefined model. The design space of digital asset functionality went from being discrete to being, for all intents and purposes, infinite; and today the overwhelming majority of new blockchains, regardless of consensus or architecture, are programmable smart contract systems.
At the end of 2019, there was a prevailing narrative that Ethereum and “its network effects” had already won. The “Ethereum killer” strategy was hopeless, it was stated. But in 2022 we live in a market that contains a dizzying number of decentralized networks, smart contract systems, and blockchain programming languages -- L1s, L2s, toolkits like Substrate and Cosmos SDK, app-dedicated networks, and even non-blockchain decentralized ledgers. These innovations have not only persisted, but have proliferated. And, more importantly, they have been accepted (together with their various approaches and tradeoffs) by investors, developers, and users.
Walking through the one-way doors of innovation is not something we do alone. In fact, innovation at scale can never happen in a vacuum, with a single invention or a single company. To scale, innovation necessarily finds itself as part of a movement -- of founders, of communities, of standards, of narratives -- executed by many different participants acting with mutual coordination.
The multichain world is a technological movement, and its one-way door is omnichain technology (that is to say, interoperability networks that allow tokens to live simultaneously on all blockchains). Many projects are choosing to build their assets on an omnichain architecture; once enough projects make this choice, there is no going back. Omnichain assets will quickly come to be the norm, the table stakes, the minimum viable state of the art required to participate in the blockchain space.
How many doors of innovation have we walked through? DEXes and liquidity mining models have collapsed the average time-to-liquidity of a digital asset from 12 months to 12 hours and have unlocked democratized liquidity forever. Zero knowledge proofs have set a technological standard for mathematical privacy, scalability, and verification. In the future, we can see that mass mainstream adoption of NFTs, NFT protocols, and NFT financialization services will dramatically change how the world deals with uniquely-valued assets.
The one-way doors of innovation don’t come around every day, or even every year. But they come around often enough that they can be anticipated. They represent the advancements of the state of the art of our technology from which we will never return.