Original Title:Crypto is going mainstream—just not in the way you might think
Original Author: @binafisch
Compiled by: Peggy, BlockBeats
Editor's Note:
Cryptocurrency is going mainstream, but in a completely different way than you might imagine. It won't appear in the form of Bitcoin, Ethereum, or Solana, nor will it be dominated by NFT art or meme coins. Instead, it will quietly integrate into digital finance and the underlying internet, becoming a secure communication layer between applications, much like the transition from HTTP to HTTPS.
Today, stablecoin transaction volumes are approaching those of Visa and PayPal, and Web3 is "invisibly" entering daily life. The future Layer 1 will no longer be a "world computer" but a "world database," providing a trusted shared data source for millions of applications.
This article delves into the logic behind this transformation: Why is interoperability key? Why will business models be restructured due to the integration of AI and blockchain? And why is the future of frictionless finance not a single giant chain but a universal foundational layer?
Below is the original text:
Cryptocurrency is going mainstream, just not in the way you might think.
It won’t be like Bitcoin, Ethereum, or Solana, nor will it be dominated by NFT art or meme coins, and it’s even less likely to be EVM (Ethereum Virtual Machine) or SVM (Solana Virtual Machine). Blockchains will quietly integrate into the network, becoming a secure communication layer between applications, much like the transition from HTTP to HTTPS. The impact will be profound, but for users and developers, the experience will hardly change. This transformation is already underway.
Stablecoins, essentially fiat balances on the blockchain, currently process approximately $9 trillion in adjusted annual transaction volume, on par with Visa and PayPal. Stablecoins are not fundamentally different from PayPal dollars; the difference lies in the blockchain providing a more secure and interoperable transmission layer. After more than a decade, ETH still hasn’t been widely adopted as currency and is easily replaceable by stablecoins. ETH’s value comes from the demand for Ethereum block space and the cash flow generated by staking incentives. On Hyperliquid, the highest-traded assets are synthetic representations of traditional stocks and indices, not crypto-native tokens.
The primary reason existing financial networks are integrating blockchain as a secure communication layer is interoperability. Today, a PayPal user cannot easily pay a LINE Pay user. If PayPal and LINE Pay operated as chains like Base and Arbitrum, market makers such as Across, Relay, Eco, or deBridge could facilitate these transfers instantly. PayPal users wouldn’t need a LINE account, and LINE users wouldn’t need a PayPal account. Blockchain enables this interoperability and permissionless integration between applications.
Recent buzz around Monad as the next major EVM ecosystem shows that the crypto space is still stuck in outdated thinking. Monad has a well-designed consensus system and strong performance, but these features are no longer unique. Fast finality is now a basic requirement. The idea of developers migrating en masse and locking into a new monolithic ecosystem is not supported by the experience of the past decade. EVM applications can easily migrate between chains, and the broader internet will not be rearchitectured within a single virtual machine.
The Future Role of Decentralized Layer 1: A World Database, Not a World Computer
Or in crypto terms: the base layer for Layer 2 chains.
Modern digital applications are inherently modular. There are millions of web and mobile applications globally, each using its own development framework, programming language, and server architecture, and maintaining an ordered list of transactions that define its state.
In crypto terms, each application is already an app-chain. The problem is that these app-chains lack a secure, shared, trusted source. Querying an application’s state requires trusting centralized servers that may fail or be attacked. Ethereum initially tried to solve this with the world computer model: in this model, each application is a smart contract in a single virtual machine, validators re-execute every transaction, compute the entire global state, and run a consensus protocol to reach agreement. Ethereum updates its state approximately every 15 minutes, at which point transactions are considered confirmed.
This approach has two main problems: it doesn’t scale and doesn’t provide enough customization for real applications. The key realization is that applications should not run in a single global virtual machine but should continue to run independently, using their own servers and architectures, while publishing their ordered transactions to a decentralized Layer 1 database. Layer 2 clients can read this ordered log and independently compute the application state.
This new model is both scalable and flexible, capable of supporting large platforms like PayPal, Zelle, Alipay, Robinhood, Fidelity, or Coinbase with only moderate adjustments to their infrastructure. These applications don’t need to be rewritten for EVM or SVM; they just need to publish transactions to a shared, secure database. If privacy is important, they can publish encrypted transactions and distribute decryption keys to specific clients.
Underlying Principle: How the World Database Scales
Scaling a world database is much easier than scaling a world computer. A world computer requires validators to download, verify, and execute every transaction generated by every application globally, which is computationally and bandwidth-intensive. The bottleneck is that every validator must fully execute the global state transition function.
In a world database, validators only need to ensure data availability, consistent block ordering, and that once finality is reached, the order is irreversible. They don’t need to execute any application logic; they only need to store and propagate data in a way that guarantees honest nodes can reconstruct the complete dataset. Therefore, validators don’t even need to receive the full copy of every transaction block.
Erasure coding makes this possible. For example, suppose a 1MB block is erasure-coded and split into 10 parts distributed to 10 validators. Each validator receives about one-tenth of the data, but any 7 validators can combine to reconstruct the entire block. This means that as the number of applications increases, the number of validators can also increase, while the data load per validator remains constant. With 10 applications generating 1MB blocks and 100 validators, each validator processes about 10KB of data; with 100 applications and 1000 validators, each validator still processes the same amount of data.
Validators still need to run a consensus protocol, but they need to agree only on the block hash order, which is much easier than agreeing on global execution results. The result is that the capacity of the world database can scale with the number of validators and applications without overloading any validator with global execution.
Interoperability Between Chains with a Shared World Database
This architecture introduces a new problem: interoperability between Layer 2 chains. Applications in the same virtual machine can communicate synchronously, but applications running on different L2s cannot. For example, with ERC20, if I have USDC on Ethereum and you have JPYC, I can use Uniswap in a single transaction to swap USDC for JPYC and send it to you because the USDC, JPYC, and Uniswap contracts coordinate within the same virtual machine.
If PayPal, LINE, and Uniswap each run as independent Layer 2 chains, we need a secure method for cross-chain communication. To pay from a PayPal account to a LINE user, Uniswap (on its independent chain) would need to verify the PayPal transaction, execute multiple swaps, initiate a LINE transaction, verify completion, and send final confirmation back to PayPal. This is Layer 2 cross-chain messaging.
To accomplish this securely and in real-time, two elements are needed:
The target chain must have the latest hash of the source chain’s ordered transactions, usually a Merkle root or similar fingerprint published on the Layer 1 database.
The target chain must be able to verify the correctness of the message without re-executing the entire source chain program. This can be achieved through succinct proofs or trusted execution environments (TEEs).
Real-time cross-chain transactions require a Layer 1 with fast finality combined with real-time proof generation or TEE attestation.
Towards Unified Liquidity and Frictionless Finance
This brings us back to the bigger vision. Today, digital finance is fragmented by closed systems, forcing users and liquidity to concentrate on a few dominant platforms. This concentration limits innovation and hinders new financial applications from competing on a level playing field. We envision a world where all digital asset applications are connected through a shared foundational layer, allowing liquidity to flow freely between chains, payments to occur seamlessly, and applications to interact securely in real-time.
The Layer 2 paradigm makes it possible for any application to become a Web3 chain, and a high-speed Layer 1 that serves solely as a world database enables these chains to communicate in real-time and interoperate as naturally as smart contracts in a single chain. This is how frictionless finance is born—not through a single giant blockchain trying to do everything, but through a universal foundational layer that enables secure, real-time communication across chains.
