a16z: What innovations should we deploy and pay attention to in 2023?
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a16z: What innovations should we deploy and pay attention to in 2023?
A Brief Discussion on the Development Trends of Cryptographic Technologies: Which Ones Will Break Through Bottlenecks and How Will They Be Deployed at Scale?
Navigating Web3 tides with focused insightsAuthor: a16z
Translation: Cookie, ChainCatcher
Note: a16z has just released a list of technological bottlenecks that technical builders may overcome in the coming year. According to various a16z partners, this is an innovation agenda ("big ideas") highlighting breakthroughs that startups in their respective fields could achieve in 2023. The list covers general-purpose technologies, game development, growth drivers for U.S. enterprises, AI-driven fintech, and of course, cryptocurrency. Below are some developments exciting our engineering, research, and investment teams about the future.
The Mobile Era for Blockchains
How close or far are we from a "mobile era" for cryptocurrency?
Blockchain users primarily access the internet via smartphones, yet rely on centralized infrastructure—which is convenient but risky. Traditionally, users could resolve this by running their own nodes, but that's time-consuming and resource-intensive, requiring at least one machine running continuously, hundreds of GBs of storage, and around a day of synchronization time… not to mention specialized programming skills.
But now there’s growing interest in infrastructure that enables distributed blockchain access for users—especially those who can’t run full nodes themselves. With the emergence of “light” clients offering functionality similar to full nodes—such as Helios (released by a16z crypto), Kevlar, and Nimbus—users can now directly verify blockchain data from their devices. I hope to see similar improvements in trust and decentralization across other layers of the crypto stack, such as event indexing and user data storage. Altogether, these advances help enable true decentralization on mobile.
—Noah Citron, Engineering Partner, Crypto Team (@noahcitron, @ncitron on Farcaster)
Zero-Knowledge, Multi-Party Computation, and Post-Quantum Cryptography
Zero-knowledge systems are powerful foundational technologies, key to scalability and privacy-preserving applications on blockchains. However, there are many trade-offs between proof efficiency, proof succinctness, and the need for trusted setup. It would be a significant innovation to see more zk-proof constructions filling gaps in this multidimensional space. Particularly intriguing to me is exploring whether trusted setup is necessary for constant-size proofs (and constant-time verification), which could further advance more transparent forms of trusted setup.
We also need better ECDSA (Elliptic Curve Digital Signature Algorithm) threshold signature schemes. Threshold signatures eliminate reliance on any single signer, making them crucial for multi-party, distributed computation involving private data—applicable to many Web3 use cases. The most interesting threshold ECDSA schemes are those minimizing total communication rounds, including pre-signing phases where the message is unknown.
As post-quantum signatures near the end of standardization by NIST, it will be valuable to explore how innovations in this space can be adapted for aggregation or thresholding.
—Valeria Nikolaenko, Research Partner, Crypto Team (@lera_banda)
Zero-Knowledge Developer Onboarding
Zero-knowledge technology has been around for a while. In recent years, it has transitioned from theory to practice, and in 2022, onboarding ZK developers in crypto saw a turning point.
Specifically, we’ve seen an explosion of educational resources and maturation of high-level programming languages like Noir and Leo, making it easier than ever for engineers to start building ZK applications. Given how critical zero-knowledge is across so many use cases, I expect these developments—combined with ongoing theoretical progress—to drive a wave of application developers into the space, who will in turn unlock even more unexpected new applications. I’m excited to see what comes next.
—Michael Zhu, Engineering Partner, Crypto Team (@moodlezoup)
VDF Hardware
Verifiable Delay Functions (VDFs) are an exciting cryptographic primitive with many applications—from verifiable lotteries to leader election and frontrunning prevention. But the biggest challenge has always been hardware implementation: the entire verification logic requires hardware assurance to be confident attackers cannot compute VDFs faster. I’m excited that first-generation VDF hardware is achieving practical usability, paving the way for real-world deployment.
—Joseph Bonneau, Research Partner, Crypto Team (@josephbonneau)
On-Chain Gaming and Autonomous Worlds
What if someone could create a game world that cannot be deleted or censored, requires no servers, and could last far beyond any individual’s lifetime? We can now accomplish this unprecedented feat. We’re in the early stages of natively crypto-based, fully “on-chain games,” or what others prefer to call the broader category—“autonomous worlds”—where all state and logic reside on blockchain technology.
Regardless of what you call it, crypto is now enabling new affordances toward maximum decentralization, making it possible to build such games online. Specifically, placing a game’s entire state and logic on publicly verifiable, censorship-resistant, decentralized blockchains—alongside increasingly sophisticated on-chain programs—these technical innovations not only overcome limitations like storage, but essentially “use tricks to compress complex worlds into executable files.” What kinds of previously impossible games or gameplay mechanics will become feasible? And are such creations still even “games”?
—Carra Wu, Investment Partner, Crypto Team (@carrawu, @carra on Farcaster)
Non-Transferable Tokens
I prefer the term “non-transferable tokens” over “soulbound” tokens (a term Vitalik Buterin borrowed from gaming to describe non-transferable NFTs). These tokens apply to scenarios where transferring NFTs isn't needed. I’m excited to see various Web3 applications built not only atop this primitive but also integrated with decentralized identifiers and verifiable credentials. While discussions around these primitives often center on decentralized identity, many other applications remain to be explored—such as tickets, digital-physical hybrids, reputation systems, and more.
—Michael Blau, Investment Partner, Crypto Team (@blauyourmind, @michaelblau on Farcaster)
Distributed Energy
How can we apply the ethos of decentralization to energy? Consider the outdated, centrally managed power grid, which also suffers from high upfront capital costs and misaligned incentives. By addressing high capital expenditures and using tokens to align incentives, there’s significant opportunity to build microgrids along with storage and transmission networks.
Markets for Renewable Energy Certificates (RECs) and on-chain carbon credit systems are also flourishing. I’m excited to see builders continue expanding the possibilities for blockchain-enabled distributed energy solutions.
—Guy Wuollet, Investment Partner, Crypto Team (@guywuolletjr, @guy on Farcaster)
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