The best of Ethereum 2.0 is yet to come, says Infura GM
Ethereum 2.0 has transformed to proof of stake via its new Beacon Chain. When will Eth2 have sharding, smart contracts and more features?
The cryptocurrency world's long-awaited launch of Ethereum 2.0 this month saw a seismic shift within the so-called "world's computer" in going from proof-of-work to proof-of-stake. But Phase 0 is still a testing ground, and Ethereum 2.0's further development will take more time.
"[It's] really good to think about Phase 0 as still a testing phase," said Michael Godsey, general manager and head of product at Infura, a ConsenSys subsidiary that lets users run applications on Ethereum without setting up a node or wallet. "I think when developers start ramping onto ETH 2.0 is still going to be in the later phases."
Ethereum's Phase 0 is the first set of upgrades to the Ethereum blockchain, focusing on implementing the proof-of-stake consensus mechanism known as the Beacon Chain. Phase 0 will only serve to manage a list of proof-of-stake validators — those who have staked ETH to participate in the creation of new blocks — and will not be taking on blockchain tasks such as executing transactions or serving smart contracts.
"The earlier phases are really to verify and validate that the staking architecture works, and that the network can function inside of this new consensus algorithm," Godsey said, in a video interview with Forkast.News. "You're going to see a lot of validators and staking services and stuff like that come online that help people participate in that layer of the new network."
See related article: Will Ethereum 2.0’s launch be blockchain’s iPhone moment?
Phases 1 to 2 are planned to eventually implement the full suite of the Ethereum network's features such as shard chains — which help improve scalability and reduce congestion, transactions, smart contracts and more. The next phases are scheduled to launch in late 2021 or early 2022.
Watch the full interview with Godsey and Forkast.News Editor-in-Chief Angie Lau to find out more about Ethereum 2.0, Infura's role in developing infrastructure for businesses and applications on the Ethereum network, and the growth of decentralized finance.
- Blockchain development could be the next cloud storage: "The way that developers are utilizing the cloud, the way that developers utilize cloud right now, this is going to be the next network layer that people are really passionate and motivated to build on top of."
- On Ethereum's dominance: "What is really awesome about Ethereum and what it provides for this entire movement of trying to build towards more decentralized systems and applications is, it is solving so many of the hard problems that people are going to have to solve in order to integrate these types of new paradigms into their applications."
- Does Infura police its users? "If the network identifies a bad actor and we can do something to help, we will do what we can to help. There's no culling that we do on our side without any sort of greater network or ecosystem effort. That's been a really important cultural policy inside of Infura, is that we are the pipes. We do not get to choose what is happening over those pipes."
- Blockchain's potential applications: "The landscape of what can be done with this technology is so broad, and that's what's so exciting about it. There are some amazing efforts being put into healthcare initiatives, there are some amazing efforts being put into banking the unbanked."
Angie Lau: What is the place of 'infrastructure as a service' in Web 3.0? Will Ethereum-driven DeFi projects continue to drive congestion? And is ETH 2.0 ready? Welcome to Word on the Block, the series that takes a deeper dive into blockchain and the emerging technologies that shape our world at the intersection of business, politics and economy. It's what we cover right here on Forkast.News. I'm Forkast Editor-in-Chief Angie Lau.
Well, in the second quarter of this year, it was reported that Ethereum surpassed Bitcoin to become the most popular blockchain in the world. Ethereum certainly wants to fuel, and is already fueling, the world computer — Web 3.0., at least. One of the firms helping projects onramp onto Ethereum is Infura, which recently celebrated its fourth birthday to Ethereum's fifth birthday.
Now the ConsenSys-owned subsidiary is also the infrastructure behind a significant chunk of the DeFi craze. Question is: where is it taking us? What's the next stage of growth for not only DeFi, but more broadly for blockchain? Joining us right now is an insider himself at Infura; he's GM and head of product of Infura — Michael Godsey. Michael, it's great to welcome you to the show.
Michael Godsey: Thanks, Angie. Super happy to be here.
Lau: Infura started about four years ago. Did you imagine that this is where we would be right now, at the cusp of one of the biggest and, for many, confusing and inexplicable growth of DeFi?
Godsey: When we set up Infura, we really thought of this as "how do we make it as easy as possible to build on this technology?" And that meant that there were going to be so many possibilities of what people could do and just sheer breadth of applications and different types of devices that would end up using this.
So we were super happy to see this DeFi exploding, we were super happy to see crypto collectibles explode at the end of 2017. And I think we're going to see a ton more explosions going forward. I don't think it's just DeFi; I don't think it's just crypto collectibles. I think we are just scratching the surface of the potential of this technology and we have a long road ahead.
Lau: For those just understanding this right now, what is the role of 'infrastructure as a service,' especially in blockchain? What does it allow companies and firms to do?
Godsey: Infura specifically and infrastructure inside of the Web 3.0 space is basically, in order to communicate, in order to have an application on these networks, you have to have a connection to those networks. That connection is usually powered through what people call a node or a client, and that's just simply a server or a computer or a device running the software that connects to the network.
What Infura does is we give people a super easy-to-use API (application programming interface), where they can just plug that into their application, whether it's an IoT (internet of things) device, a mobile device, a server, an AWS (Amazon Web Services) virtual server, whatever it is, you can plug into Infura and start developing on blockchain and Ethereum and IPFS (InterPlanetary File System) immediately.
Lau: So in the old days, I guess it would be like a DOS or an operating system that allows a more general community of developers to tap into the World Wide Web.
Godsey: Kind of — yeah. I think maybe a better way to look at it is, the way that developers are utilizing the cloud, the way that developers utilize cloud right now, this is going to be the next network layer that people are really passionate and motivated to build on top of.
Lau: That motivation is based in opportunity and a lot of projects, including Filecoin — Filecoin mainnet, as we know, has just launched — and I understand that Infura is now opening up support for developers to build Filecoin-based apps. What's the goal here?
Godsey: We worked really closely with the Protocol Labs team to welcome Filecoin to the Infura suite. We've been big supporters of IPFS for a long time, probably one of the earliest and still a very big and significant portion of our platform. In building out our IPFS support, we've maintained and fostered this really awesome relationship with the Protocol Labs team. And when Filecoin started to come on, we were like, "OK, all right, we need to be prepared for this. This is the next big development from a team and a company that we really trust and respect."
There are two primary layers of the Filecoin network, and that's really the blockchain-based network layer and then the storage-based, much more similar to IPFS layer. And the blockchain layer is what validates the storage and allows you to make these decentralized storage deals with people who offer decentralized access to their storage, which is a really, really interesting new way to access storage for developers and applications.
We want to be at the forefront of that with our friends and colleagues at the Protocol Labs team. So right now, what we're offering is the Filecoin network layer. It's very similar to our access to Ethereum, but it gives you access to the blockchain layer of the Filecoin network. So if you want to check markets and understand what's going on with the FIL Filecoin currency that's involved in the network, you can use our API. We're super excited and we're going to be building out use cases for it as it matures and working really closely with Protocol Labs on that.
Lau: So you've expanded beyond Ethereum, you're now including Filecoin. Are there other potential protocols that you could expand to at some point and what would they be?
Godsey: Absolutely, yeah. ETH2.0 to us is a new protocol in a lot of ways, and because of the amount of work and the complexity of that offering and that network change, to us in order to provide the operational quality that our users demand from us, that's an entirely new protocol for us. And so ETH2.0 is going to be a big, big new part of the Infura platform in the future. But not only are we talking to, but we are keeping our eyes on every single major protocol developer out there.
We have conversations constantly with people all across the ecosystem. There are so many exciting projects out there and I think we are driven to provide what developers are demanding, and that's where we'll start. So when our users start saying, "Hey, we want this," that's when we'll start really getting serious about building that out.
Lau: That's really the critical question that a lot of us ask, even philosophically, that there's just such demand for Ethereum to fuel projects. As we know, there are myriad protocols out there in the decentralized ecosystem.
But at some point, it's almost like Ethereum's dominance is creating in and of itself a centralized portal or even a monopoly. In your view, do you think that Ethereum's dominance is ultimately a weakness for the ecosystem, or what needs to happen here?
Godsey: I don't know if I would necessarily consider it dominance. I think, like I said earlier, I think we're just really early still. And I think that what is really awesome about Ethereum and what it provides for this entire movement of trying to build towards more decentralized systems and applications is, it is solving so many of the hard problems that people are going to have to solve in order to integrate these types of new paradigms into their applications.
I think we need to celebrate the fact that we have all these people who are working to solve and working to prove out all of these different use cases that have potential in this ecosystem. It will always have a place as a strong foundation where some very high degree of technical proficiency has been dumped into it. But I think the best way to look at it is, this is a foundation and there's just going to be so much stuff that builds off of it and around it and next to it, and I think we're still super early.
Lau: It's the biggest house on the block at the moment, but there are other houses that are being built right around it and we're seeing it every day. But for those who are just starting to understand this DeFi craze. We went from half a billion in market cap, in market value last year, we're surpassing US$11 billion in less than a year. How has Infura created that infrastructure onramp to really have developers and protocols create their presence in DeFi?
Godsey: That's a really good question. We haven't targeted DeFi specifically; there is a fundamental connection that you have to make to these networks, and any application utilizing Ethereum can work on top of Infura, but I think what we had to do to prepare for DeFi was really in our DNA.
We have a ton of super high-talented engineers and people on the Infura team who have basically spent their careers working on extremely complex and extremely critical software systems. So to us, if we're not ready for that, we're not doing our jobs. And if we're not up all the time and there for people when they need us, then we're ultimately betraying the trust of our users. And that to us is the ultimate failure.
When Cryptokitties had that big burst in 2017, we were there to help them, and that was before we even had a paid business model. We were so dedicated to seeing this ecosystem grow that making sure that things like those continued to be healthy and resilient as a network and as a whole [was important to us]. And we take the exact same stance on DeFi.
Lau: Well, Cryptokitties was a great example of the overall traffic and the demand of people who were just caught up in these very unique digital signatures – Cryptokitties craze – and it really clogged the entire system. We're seeing that right now in DeFi. Ethereum gas prices have surged on DeFi demand. So having been there in 2017, helping to unclog the pipes, if you will, how do you support the massive traffic today with DeFi?
Godsey: I guess there are two sides of that. There's the way that we look at it, which is: there's the read and then there's the write side of that. Applications have to consume a ton of data from the network. What's going on with this user's contract, what's going on with this address and this person's interaction versus this person's interaction — so they're having to read a ton of data from the network. And we are making constant improvements to how that's done and the simplicity around it and the quality of service around that. So from that side, our system scales phenomenally and can handle far more than what's going on in the network right now, confidently.
And so the write side of it is the really complicated part, where a ton of effort is being put into layer 2 solutions, ETH 2.0 being a big target, increasing transaction throughput and solving some of the problems behind gas and that. But I think what you're going to see is developers and infrastructure providers are going to start finding ways to be very creative about how to solve these problems. That will likely range all across the "what needs to be on the blockchain" decision.
One of the earliest conversations I had in this ecosystem was: 'what needs to be on chain?' And I still think people are really trying to answer that question. People are going to start going, 'OK, well, maybe I don't need to write this thing to the chain for my applications logic to work the same way it does.' And then that way, I don't have to compete with the DeFi congestion, necessarily. But I think beyond that, we're working with a number of companies, we're working with a number of developers to build some really innovative solutions to those problems.
Lau: One of those projects is Uniswap, which currently headlines DeFi's total value — dominates about 25% of the market at the moment. You've had first row tickets to Uniswap's climb; I'm curious how you saw the DeFi boom, and what it looked like from the inside?
Godsey: I mean, it was business as usual for us. Uniswap is an early trusted user of Infura. My hat's off to them. They are super efficient with how they use our service, and so they're doing a lot of the work on their side, to be smart about what things they have to read, what things they have to write. We love having them as a customer because they really test our system, but they also are extremely talented professional engineers who are being super smart about how to use our system.
So they actually teach our users about how to be a better user in some ways. As far as all of that excitement, a month ago or six weeks ago where things really started to spike, some auto-scaling might have kicked in, but for the most part, we had no service disruption, we had no changes in service quality. To us, it was business as usual.
Lau: Do you find you're in a position at times to play police with who is using Infura, how they're using it? Do you have any impact there or influence there?
Godsey: It depends on how you think about that. If the network identifies a bad actor and we can do something to help, we will do what we can to help. But we do not shut anything down that there isn't some greater effort beyond... there's no culling that we do on our side without any sort of greater network or ecosystem effort. That's been a really important cultural policy inside of Infura, is that we are the pipes. We do not get to choose what is happening over those pipes.
No different than Comcast [which] doesn't choose what bits are flowing through their fiber. I think we see that as a responsibility to our users and to the ethos of this ecosystem, that we aren't acting as police, but we are extremely dedicated to making sure that this network is healthy and if it's a community, an ecosystem-wide effort, we definitely try to help.
Lau: The infrastructure build is super important; ETH 2.0 is ready to launch in the next couple of months, we're in Phase 0 right now. Does this change the equation? And how does it create a difference that everyone's expecting to see in terms of speed?
Godsey: I think [it's] really good to think about Phase 0 as still a testing phase. I think when developers start ramping onto it, ETH 2.0 is still going to be in the later phases. The earlier phases are really to verify and validate that the staking architecture works, and that the network can function inside of this new consensus algorithm. And so you're going to see a lot of validators and staking services and stuff like that come online that help people participate in that layer of the new network.
But Infura, like I've said before, we are here for the developers. And so for us, we are definitely going to have an ETH 2.0 service. We have an ETH 2.0 service up right now for access to the testnets, it's specifically the beacon chain layer. Actually, we're taking a very similar approach to ETH 2.0 in that we were taking to Filecoin, and that's: we want to get as many people into it and we want to start understanding, how are people going to use this? And then we can build our service better around the pieces that are most important to the users that are benefiting from that infrastructure.
Lau: You're probably sitting on one of the most integral focus groups, as a result of that thinking, right now in emerging technologies. You also said at the beginning of our conversation, "this is only the beginning." We started with the very beginnings, and now we're fast-forwarded to DeFi.
People feel like blockchain has created efficiencies across industries. It's changed business logic, it's opened up business opportunity, but if it's only the beginning, where, from an insider point of view, knowing what you can build, what developers can build based on the tools and the equipment that you've provided them, what can we see for the everyman, for the every-business, in the future? What are you seeing in your crystal ball right now?
Godsey: I love thinking about this. There's so many possibilities. So I come from a previous life of making video games, and so I'm super interested in all of the efforts around embedding these blockchain systems into your video games and trying to make really interesting reputation systems, or anti-harassment and anti-toxicity systems, which are a huge issue in modern video games, especially modern multiplayer video games. So I would love to see some of this technology used to improve those things that I care a lot about from the video game industry. And people are already investing a lot of money into that.
There's some traction, I think we're going to see that build and build, but the landscape of what can be done with this technology is so broad, and that's what's so exciting about it. There are some amazing efforts being put into healthcare initiatives, there are some amazing efforts being put into banking the unbanked. That's what keeps me motivated, is there are so many possibilities and I think we see it as such an honor to provide people with the tools to be able to actually see through all of those possibilities.
Lau: Well, Michael, that's the first time I've heard of technology being used to restore civility to online behavior, and I think we need more of that. Amen to that. Look, technology is only as good as the users and the developers. We know this to be true. It was great to hear from you, as head of product for Infura, and how you really see that and just get a glimpse at what the future may hold. Michael Godsey, thank you so much for joining us on Word on the Block today.
Godsey: Thank you, Angie. Very, very fun to be in this conversation with you.
Lau: Me too. And thank you, everyone. It was great fun for all of you to join us in this conversation as well, and I thank you for it. I'm Angie Lau, Forkast.News Editor-in-Chief, and thanks for joining us on this latest episode of Word on the Block. We'll see you next time.