Discover more from VeradiVerdict
World's Lightest Blockchain
VeradiVerdict - Issue #195
Mina is a new layer-one protocol that uses succinct zero-knowledge proofs to be the world’s lightest blockchain. The entire Mina blockchain is designed to remain at a fixed size of 22KB-–compared to most popular blockchains at more than 300 GB––allowing end users to trustlessly access the network even from hardware-limited devices, like smartphones.
Most end users of blockchain applications today don’t actually directly interact with the blockchain, but rather through an intermediary, like a third-party full node operator or an API Gateway. This is because operating a full node requires enormous hardware capacity, and in order to verify the state of the network, a full node must be able to store the entire history of the network.
Mina enables end users to operate full nodes themselves instead of through intermediaries by using zk-SNARKs to compress the size of the network history. Mina recursively generates a zk-SNARK that can verify the entire history of the blockchain up to the most recent state, which only requires 22KB to store. This enables significantly more users to actually verify the state of the network and submit transactions trustlessly.
Mina’s compact size naturally allows for more decentralization as the network scales, which enables a number of downstream features including:
Data Sovereignty: Applications on Mina can use the network’s zero-knowledge technologies to store data both privately and publicly. Additionally, since end users can operate full nodes and interact with the blockchain directly, user data never needs to leave end user devices, even to be relayed by an intermediary; a zero-knowledge proof of the user’s data is sufficient.
Cross-Chain Communication: Mina’s compact size makes it substantially easier to build bridges between Mina and other blockchains, because other blockchains can verify the state of the Mina network using only a short proof. Importantly, this means that projects in other blockchain ecosystems can still leverage Mina’s zero-knowledge capabilities using bridges.
Security and Stability: End users are more likely to operate full nodes for Mina than for other blockchains, as the technical requirements are substantially less demanding. As the network scales, this means that the blockchain will truly be decentralized to every participant in the network, rather than to a handful of full node operators who maintain the blockchain state on the behalf of the broader set of end users.
The Mina team is currently building out a TypeScript SDK to help developers build dApps on the network. dApps on Mina are known as “zkApps” and support smart contract execution with enhanced zero-knowledge capabilities, including support for private and public computation, support for verifiable off-chain computation, and more. Their zero-knowledge smart contract offering will be the first easily programmable way for any developer to build directly with zero knowledge. zkApps on Mina can also be used as primitives for dApps on other blockchains that might require zero-knowledge computations.
Mina is also building out a cross-chain bridge with Ethereum, which will enable any EVM-compatible chain to efficiently verify the state of the Mina network. This allows dApps in the broader EVM ecosystem to leverage Mina’s zero-knowledge capabilities through bridging.
Altogether, Mina represents a major step in the evolution of layer-one blockchains, making true decentralization and trustlessness possible, and reimaging data privacy, security, and scalability with zero-knowledge technologies.
What is Mina Protocol?
Mina is a new layer-one protocol that makes use of compact zero-knowledge proofs to be the world’s lightest blockchain. While most popular blockchains today are more than 300GB large (and growing!), the Mina blockchain is designed to remain at a fixed size of 22KB, allowing users to access the network from hardware-limited devices (like a smartphone) and to efficiently bridge the network to other blockchains. The project recently raised $92 million in financing from Pantera Capital, FTX Ventures, Three Arrows Capital, and more.
How does Mina work?
To fully understand what Mina enables, it’s first important to understand the different types of nodes within a decentralized network. In most blockchains, nodes called “miners” are responsible for processing submitted transactions and updating the state of the blockchain. Generally, through a process called consensus, the network will elect a single miner to propose their updated blockchain state to the entire network, allowing all of the nodes to agree on a unified shared state. Rather than blindly trusting miners, nodes will often verify the current state of the blockchain through a series of cryptographic computations. These verifying nodes, called “full nodes,” are also responsible for maintaining a full history of the blockchain, which becomes prohibitively costly as blockchains grow and process more transactions.
Thus, for most popular blockchains today, end users are typically unable to operate a full node and verify the state of the network because of the insane resource requirements. Instead, end users typically interact with the blockchain through an API gateway, like Alchemy, or a light client, which is a miniaturized version of the blockchain that connects to a full node in the network. In this sense, most blockchain networks aren’t truly decentralized, as currently, most end users are still trusting some third-party full node operator when interacting with the blockchain. This can become especially problematic when these intermediaries go down; just last week, an Infura outage resulted in MetaMask users not being able to use their wallets.
Mina addresses this problem by reducing the storage requirements necessary to verify the history of the blockchain, making it easier to operate a full node and to verify the current state of the network. Specifically, Mina leverages zk-SNARKS (zero-knowledge succinct non-interactive arguments of knowledge––primer here!) to combine blocks into a single, small proof or certificate. This proof verifies the blockchain state; it ensures that all transactions are validly-formed and signed, and that all consensus rules have been correctly followed. Moreover, the Mina blockchain also maintains a fixed size, regardless of its history of transactions, by generating its verification proofs recursively; at a high-level, a proof from timestep n+1 can also verify the state of the blockchain at timestep n, meaning that full nodes need only maintain the most recent proof to verify the entire history.
Thus, to verify the blockchain state, a full node only needs access to a single proof, which is much smaller and easier to manage than the entire history of the blockchain.
What makes Mina different from other L1s?
The key distinction between Mina and most other L1 blockchains is Mina’s fixed size, which allows end users to operate a full node and to actually interact with the blockchain trustlessly, instead of relying on an intermediate full-node operator. Then, as the network scales, the blockchain is truly decentralized to every participant in the network, as opposed to a handful of full node operators. This enables a number of downstream features, including:
Better Data Sovereignty. One key feature of zk-SNARKs, besides their compactness, is that they reveal absolutely no information about the claims that they verify. This means that full nodes can accurately verify the state of Mina without having access to any of the data stored in Mina’s history. Users of Mina thus share proofs of their data instead of the actual data itself, which prevents sensitive information from being leaked on the blockchain’s public state, and gives users more precise control of their data. Since users also interact with the blockchain directly by operating their own full node, user data never has to leave user devices; only the proof does.
Cross-Chain Communication. Bridging between blockchains is a notoriously complex, risky, and costly problem. Much of the complexity lies in the process of verifying the state of a target chain from a source chain, especially when the history of the target chain amounts to several hundred gigabytes of data. Mina’s lightweight design makes it incredibly simpler to bridge between Mina and other blockchains, not only increasing the scope of the Mina ecosystem, but also enabling other blockchain ecosystems to leverage Mina’s unique features like privacy-preserving data verification.
Security and Stability. Because of the reduced technical requirements for operating a full node on Mina, as the network grows, we can expect that most participants will actually run full nodes (that also participate in consensus) rather than using third-party intermediaries. In other blockchain ecosystems like Ethereum and Solana, the actual state of the blockchain has largely been centralized around a relatively small set of full node operators, who serve as intermediaries for the rest of the ecosystem. This centralization around intermediaries makes these other networks more susceptible to things like 51% attacks or the network going down when a critical mass of nodes fail.
What’s next for the ecosystem?
The Mina team is currently building out a software development kit (SDK) to help external developers build dApps on Mina. dApps on Mina are referred to as “zkApps,” and use smart contracts powered by zero-knowledge techniques. These zkApps will be able to verifiably leverage off-chain computation and off-chain state, allowing both computation and state to be customizably private or public (you can read more here!). Because computation can also be moved off-chain, zkApps can limit the fees they occur by only processing specific computations (e.g. sending a zero-knowledge proof of some off-chain data) on-chain. Once the SDK is released, developers will be able to write zkApps on Mina with simple TypeScript, making it easier than ever for new projects to get started.
Simultaneously, the Mina team is building out a cross-chain bridge between Mina and Ethereum which would allow the state of Mina to be verified on any EVM-compatible chain, like Ethereum, Polygon, and more. Crucially, this enables these EVM-compatible ecosystems to leverage the capabilities of zkApps built on Mina, potentially also helping projects in those ecosystems address issues around data privacy, expensive transactions, and more.
With these incumbent releases, there is likely to be a surge of new projects within the Mina ecosystem targeting classical crypto use cases (money markets, AMMs, lottery pools, etc.) but also newer, more complex use cases, including permissionless web oracles, single decentralized sign-on, and financial underwriting for uncollateralized loans––all enabled by Mina’s zero-knowledge technology.
Decentralization, as a principle, has long been championed by almost all blockchain and web3 projects. In practice, however, the dApps and technologies that most crypto users interact with on a regular basis are far less decentralized than we’d like to believe. The average end user does not have the hardware or cryptographic know-how to be able to operate a full node and verify the state of a blockchain network, meaning they must rely on third-party node operators or API gateways as an intermediary in their interactions with the blockchain. As of today, most crypto projects aren’t truly trustless, but rather simply involve the delegation of trust to these centralized operators.
Mina enforces true, large-scale decentralization by making it easier than ever for end users to operate full nodes in the network––even from resource-limited hardware like smartphones. By using zk-SNARKs as a cryptographic tool to compress data on the blockchain, Mina is able to guarantee that the entire history of its network can be verified with a simple, compact 22KB proof, meaning end users can finally interact with the blockchain directly instead of relying on (sometimes faulty or insecure) intermediaries. Beyond just decentralization however, Mina’s zero-knowledge technology allows zkApps (dApps on Mina) to leverage a variety of new features, including verifiable off-chain computation, custom controls around private and public data, and efficient, inexpensive bridges with other blockchain networks. Altogether, Mina represents a major step in the evolution of layer-one blockchains, making true decentralization and trustlessness possible, and reimaging data privacy, security, and scalability with zero-knowledge technologies.
- Paul Veradittakit
The inaugural Crypto Bahamas conference was a four-day flex of FTX’s expanding empire – with a new era of “corporate crypto” firmly on display.
Events from the past week show why regulatory agencies might want more oversight over crypto.
The bitcoin price rises as traders await 2 p.m. ET rate announcement from Federal Reserve's monetary policy committee.
IN THE TWEETS
The success of Terra’s UST has led to the emergence of new native stablecoins on NEAR and TRON.
NEW PRODUCTS AND HOT DEALS
LedgerX co-founder Paul Chou is building on the sale of the company he created by raising capital for a new kind of cryptocurrency that can be spent on Earth, the Moon, Mars and beyond.
Luxury brand Gucci will begin accepting crypto payments in select stores across the US later this month.
Thanks for reading VeradiVerdict! Subscribe for free to receive new posts and support my work.
LETS MEET UP
Indianapolis, May 16-18
Los Angeles, May 18-20
Los Angeles, June 3-7
Consensus 2022, Austin, June 8-14
NFT.NYC, New York City, June 20-24
Walks and coffee meetings in San Francisco throughout the year!
Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.