Crypto very important news

We're at the start of one of the most important trends in cryptocurrency right now. There's, a gold rush happening where lots of projects are entering in the space right now trying to solve one of the biggest problems that plagues the crypto industry today, and this is heating up into some crazy competition and actually an all-out war.

I'm gonna talk about why you need to understand it today in this video, because it's. Gon na affect lots of different projects. It's. Gon na have a big impact on who the winners are and who fails. I'm gonna explain all this in the video today as a blockchain developer, who works this technology on a daily basis and also a cryptocurrency investor myself.

So before we get into that, you know if you're new around here, hey i'm gregory and on this channel i turn you into a blockchain master. So if that's, something you're interested in then smash that, like button down below for the youtube algorithm and subscribe to this channel, and if you want to learn how to become a blockchain master step by step start to finish.

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Lots of scammers down in the comment section below impersonating me. Just don't even acknowledge them. I'll. Never give you my phone number or ask you to invest with me. So what is this big trend in crypto that you need to care about? Well, it's, blockchain scaling, particularly for the ethereum platform, where a vast majority of all the transactions and d5 and nfts are happening right now, and we're at a critical point in time.

I believe actually an inflection point where we're starting to see these solutions really roll out in full force and as this string charge to go up - and we see the adaption this technology take off and it's likely going to Have a big impact on which projects succeed and which projects don't, or at least underperform, the ones that are very successful, because right now, what we're, seeing is a variety of layer.

Two scaling solutions for the ethereum protocol coming out and they're all fighting over pieces of the exact same pie, which means that they're trying to capture a majority of the market share for other applications to build on top of Them and also presents the difficult decisions for projects that are out there in the wild right now that might have cryptocurrencies associated with them, which scaling solutions.

Do they want to support? And there's, a lot of pressure to pick the right thing here. So i'm gonna break all that down this video. So just a quick recap in case you're brand new around here. You know what is layer 2 scaling? Well, i '

Ve talked about this a lot on my channel. If you've been watching these videos, but just a quick refresher. This is essentially creating a second layer on top of ethereum right now to solve one of its biggest problems.

People talk about ethereum being too slow, too expensive to use. Of course, we have all this amazing innovation on top of ethereum, but if you try to go, you know try to token on uni swap, for example, and it's too expensive.

You might not even use the technology itself and for that reason we've, seen lots of other chains pop up like binance smart chain, which is a fork of ethereum. It's been, you know, faster, cheaper to use, but it basically just changes some settings on ethereum and compromises, decentralization, which is not really the goal here.

In the long run, so ethereum's. Problems gonna be made a lot better by this layer, two scaling where essentially, you create a second layer on top of ethereum there, where you can offload some of the computational resources and then settle the final result on the main chain.

So some of the players in the space that are really going for the throw on this are optimism. I talk about this a lot on my channel. This is one that uni swap has decided to use for their mainnet launch there's, arbitrary, which is another solution that's supposed to be launching.

I believe today, depending on when this video actually releases, i'm, recording it a little bit ahead of time here, but it should be may 28th and another one is polygon, which is previously matic and of course, we've.

Seen that cryptocurrency price go up like crazy, so both optimism and arbitrarum are what's called optimistic rollups, where basically, they take. You know some of the computational resources off of the ethereum chain and then settle them back onto the main chain.

Like i talked about here a minute ago and polygons position themselves to be, you know, uh a suite of scaling solutions, but they ' Ve really started off with their uh matic side chain, and you can see that they're moving towards the other solutions down the road.

But let's. First, talk about that, because the side chain, isn't exactly a layer two by my definition. Basically, this is having a second block chain that runs in parallel to ethereum, which you can bridge over to because it doesn't actually derive.

As security from the ethereum base chain, that's, what layer two scaling solution is here, so i just wan na clear that up these other projects using optimistic, roll-ups based technology and matic right now, uh on this you know side chain is doing something.

A little bit different, and so right now there's. A big war happening right now. Do people want to use side chains? Do they want to use roll-up technology? We have optimistic grow ups that are hitting the scene really soon, which are going to make it a lot easier for people to move their apps over to a layers, 2 scaling solution really quickly and then, over the long term, we're, also going To have zk roll ups - some of those are here already, but it's, going to take a lot longer for developers to move their applications over those types of technologies, because they require a lot more adaptation for the existing apps.

In order to to migrate to that, it's, a lot more friction, and so we're, seeing an all-out war heat up here. Okay, because there's, a ton of user side demand for this. We've, seen what happens whenever you know another chain lets people do yield farming trade tokens with for faster and cheaper, like what happened with buying a smart chain, what app with all the explosive activity on top of the polygon network, and so whenever.

We see layer, 2 scaling solutions, come out in full force on ethereum and really start to capture from the market share. I think we're gonna see the ethereal network, absolutely explode and probably kick off this defy summer 2.

0 that everybody's been talking about and that's. Gon na be great for the end user. That's, what they're demanding, but there's. This all out war going on right here for these different solutions to capture the largest part of the pie, and if things play out like, i think i will, then we'll likely see only a handful of scaling solutions actually take hold over the Long term, and so for this reason there's, a lot of pressure to become one of the winners, and this also presents a problem for application developers which solution do they want to use.

This can be a make or break decision. So if your application is a default app and it has a token associated with it and you sort of get in the wrong lane, then that can really affect your project over the long term.

Now, for some of these solutions that are not quite as hard to migrate over to let's, say it's, really easy to support multiple roll-ups based paradigms and maybe even deployed to an evm compatible chain.

There are problems with your liquidity, in your application being fragmented across different paradigms. So you have another problem: is you don't necessarily want to just join 10 different scaling solutions because part of the thing that makes your app valuable is the amount of liquidity, and if you fragment that across these different layers, then you could spread Yourself too thin, and so this is a majorly mission, critical decision for these applications to try to figure out.

Where do they want to scale, and this will largely be dependent on what other major apps going to do like, for example, uni swaps, the most traded on decentralized exchange, which scaling solution? Are they going to use? Well, they're using optimism.

This is only reasons i've, been historically so bullish about optimism. And, conversely, what's going to happen to these side chain solutions whenever roll ups come out in full force and if roll-ups gain a lot of traction and become like a new paradigm, then are people going to care as much about sidechain technology? What's going to happen? The token price of that particular cryptocurrency that isn't being used as much anymore, and maybe that's, just not the case either.

So if all that sounds confusing, that's because it just kind of is, there are so many different dynamics that play here there's, which scaling solutions should an app pick which ones are users are going to actually use.

How could it affect the cryptocurrency of a sidechain versus the cryptocurrency of you know a token that's, backing a d fire project and whether they pick the right scaling solution or not? That's. What i mean by there's, an all-out war, going on right now, and there's, a ton of upside potential here to backing the right horse.

Because, again, this layer, two scanning solution trend, is gonna, be one of the most important ones in crypto right now, because it solves one of the major pain points which is the bottleneck of blockchain scaling.

That's, been plaguing the industry for years and needs to be solved in order for this technology to achieve mass adoption, and we're starting to see these things roll out in full force and it's. Gon na provide a ton of long-term value to the end user, but we there's, a lot of things that are unclear right now on who the winners are going to be based on the reasons i listed out in this video.

So what do i personally think is going to happen? Well, i do think that we're, probably going to see maybe a handful of scaling solutions really take root over time because, like i said earlier, you don '

T really want to see liquidity fragmented across, like all these different places in application. That makes them less valuable, and i do think there'll, be a lot of pressure to just follow what other major applications do.

So the fact that uni swaps made a big bet on optimism means that it's like social proof, but what is the most important application? The space do that's, going to generate a lot of steam, for you know, new projects that's, going to be a big reason for other new projects to use the same thing now.

That being said, we've. Seen the dynamics this also get affected by people that are first, so you know, matic came out of the scene, really rushed to scale ethereum before rollup technology is really fully out.

We saw other d5 applications. You know expand over to matic as well, and it's done really well. Similarly, you know we have this release date for arbitrary trying to hit to the market the scale ethereum really fast and try to be one of the first people to get roll up technology out there as soon as possible, so that could have an impact just being.

First as well, so there are lots of dynamics in play, but i do think we will see at least one of these front runners get a pretty big market share for this tech over the long term. The one thing that's really important to know is that while we do have some of these short-term solutions like optimistic roll-ups, we may actually see a shift towards things like zk roll-ups over time, which might make you know optimistic roll-ups, less of a Thing now that being said, let '

S say that it gains so much adoption that people just stick with something because it's working. Maybe it's, not the absolute best technology, but maybe it gains the most network effects and then therefore, just has this momentum to becoming the prevailing paradigm.

That might happen too some of the stuff we just have to actually just wait and see what happens, but those are some of my initial thoughts. Let me know what you think down in the comment section below which layer two scaling solution.

Are you most excited about which one do you think has the most potential over the short mid and also long term, so that's? All i got for today, as always smash that, like button down below for the youtube algorithm subscribe to this channel, if you haven't already, that really helps these videos out.

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