Over the last four decades, mobile devices and the networks that support them have seen unprecedented innovation. Today, there are over 10.6 billion mobile connections worldwide, surpassing the global population of 7.81 billion people, with over 3.8 billion people using mobile internet in 2019 (GSMA), up 250 million users since the end of 2018. Now, with the transition to 5G well underway, this trend is only set to continue.
While this network growth presents genuine market opportunities to a wide range of sectors, this expanding network of distributed users provides altogether different opportunities to the blockchain community.
The increase in storage capacity and the rise in smartphone computing power has created a window of opportunity through which blockchain technology can finally resolve the trilemma of scalability, security and decentralisation that has impeded blockchain technology since the inception of Bitcoin.
Common protocol pitfalls
To understand the potential benefits of truly decentralised mobile-native solutions, it’s necessary to explore the core criticisms of existing protocols. Proof of Work (PoW) and Proof of Stake (PoS) are the two most prominent consensus mechanisms in existence today. Under PoW, miners compete to solve complex mathematical problems to validate user transactions. The successful miner receives a block reward for their efforts, and the process repeats itself until block rewards run out (projected to be in 2140, in the case of Bitcoin).
Although the PoW protocol technically facilitates trustless transactions, the incentivisation of miners creates unintended consequences. The resulting block reward structure naturally drives miners to pool their hashing or computing power to solve algorithmic problems faster than their competitors. This creates inevitable centralisation over time, and this centralisation compromises the security of the network, because it allows for the potential pooling of censorship powers within a select group of the most powerful miners.
While PoS protocols improve upon the computational scalability issue of known PoW protocols, by facilitating a faster transaction rate, they still operate through a select number of validating nodes that ultimately limits the ability of the network to achieve true decentralisation. The result is a consensus mechanism that may move the sector slightly closer to a trilemma resolution, but does not fully achieve it.
The resulting dynamic remains in contrast to the intent of decentralised blockchain networks. These platforms aim to eliminate intermediaries and distribute decision-making amongst all users, and while the PoS consensus mechanism allows for the network to be more scalable, the ethos of decentralisation remains under threat in this system.
The only transparent solution to this problem lies in the ability to replace the role of miners by distributing the work between all users on a network, only then could the threat of centralisation truly be removed. To do this, nodes would need to be run by a large network of users, who would share the constructing and validating work between them, each completing a tiny portion of the collective workload.
Secure mobile-native protocols
As large distributed systems, mobile networks provide the possibility to do exactly this, but it requires the ability to condense the size of a blockchain protocol to fit on a mobile phone application, and for this application to be simple and accessible enough for any user to be able to download and run with ease.
Such a system would allow all users to run a complete constructing and validating node, thereby removing the need for miners, while simultaneously creating a completely distributed and decentralised network, that becomes both more resilient and more secure as it grows. In the absence of any financial incentive, both the scale and cost of pooling mining power prevents bad actors from corrupting the network, thereby removing centralising behaviour from the system. The financial incentive is therefore replaced by the non-financial incentive of the utility of the network.
Bringing together billions of different mobile phones results in a level of network distribution that is unprecedented, further enhancing the security of the network. While this level of mobile-enabled decentralisation addresses the issues of security and anti-censorship, the problem of scalability remains.
Scalability and interoperability
Mobile-native protocols are able to address the scalability issue on two unique levels.
On the transaction level, protocols can utilise Layer 2 solutions to avoid impacting the speed and cost of on-chain transactions, thereby providing potentially limitless scalability. This allows users to settle transactions and resolve disputes on-chain on Layer 1, while carrying out the bulk of their transactions quickly and efficiently on Layer 2.
On the network level, while existing protocols have a declining number of increasingly centralised nodes, with mobile-native protocols the number of nodes increases as the network expands. The result is a network that naturally increases in processing capacity the larger it becomes, since every user that joins the network must also operate a work-contributing node.
The future of decentralisation
The reality is that once mobile Internet became prevalent in society, the increased capacity of mobile phones and the decreasing size of blockchain protocols could align, creating the opportunity to use mobile technology to resolve many of the persistent barriers to large scale blockchain adoption.
If we accept that anti-censorship is the only true value proposition for blockchain technology, and that true decentralisation is the only way to achieve it. Then we have to start taking mobile-native blockchains seriously as a legitimate path to solving the blockchain trilemma, and to unlocking the true potential of blockchain technology.
