The Future of Cryptocurrency: From Speculative Asset to the Foundation of the Internet - ChainCatcher

Original Title: Crypto is going mainstream—just not in the way you might think
Original Author: @binafisch
Translation: Peggy, BlockBeats

Editor’s Note:

Cryptocurrency is going mainstream, but perhaps not in the way you 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 the foundations of digital finance and the internet, becoming a secure communication layer between applications—much like the shift from HTTP to HTTPS.

Today, stablecoin transaction volumes are closing in on those of Visa and PayPal, and Web3 is “invisibly” entering daily life. In the future, Layer 1s will no longer be “world computers,” but rather “world databases,” providing trustworthy, shared data sources for millions of applications.

This article takes you deep into the logic behind this transition: Why is interoperability key? Why will business models be reconstructed through the convergence of AI and blockchain? And why is the future of frictionless finance not a single mega-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 through the EVM (Ethereum Virtual Machine) or SVM (Solana Virtual Machine). Blockchain will quietly integrate into the web as a secure communication layer between applications, much like the shift 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, which are essentially fiat balances on the blockchain, currently process about $9 trillion in adjusted annual transaction volume, rivaling Visa and PayPal. Stablecoins are fundamentally no different from PayPal dollars; the difference is that blockchain provides a more secure and interoperable transport layer. After more than a decade, ETH is still not widely used as money and can easily be replaced by stablecoins. ETH’s value comes from demand for Ethereum block space and the cash flow generated by staking incentives. On Hyperliquid, the highest-volume assets are synthetic representations of traditional stocks and indices, rather than crypto-native tokens.

The main reason existing financial networks are integrating blockchain as a secure communication layer is interoperability. Today, a PayPal user can’t easily pay a LINE Pay user. If PayPal and LINE Pay operated as chains like Base and Arbitrum, then market makers like Across, Relay, Eco, or deBridge could instantly facilitate these transfers. PayPal users wouldn’t need LINE accounts, and LINE users wouldn’t need PayPal accounts. Blockchain enables this kind of interoperability and permissionless integration between applications.

The recent hype around Monad as the next major EVM ecosystem shows that crypto is still clinging to outdated mindsets. Monad boasts a finely tuned consensus system and strong performance, but these features are no longer unique. Fast finality is now just a basic requirement. The idea of developers massively migrating and locking into a new single ecosystem isn’t supported by the past decade’s experience. EVM applications can migrate across chains very easily, and the broader internet won’t be rebuilt inside a single virtual machine.

The future role of decentralized Layer 1s: World database, not world computer

Or in crypto terms: the base layer for Layer 2 chains.

Modern digital applications are fundamentally modular. There are millions of web and mobile apps worldwide, each using its own development framework, programming language, and server architecture, with each maintaining a transaction-ordered list defining its state.

In crypto terms, every app is already an app-chain. The problem is that these app-chains lack a secure, shared source of truth. Querying app state requires trusting a centralized server that may fail or be attacked. Ethereum originally sought to solve this problem with the world computer model: every app as a smart contract within a single virtual machine, validators re-executing every transaction, computing the entire global state, and running a consensus protocol to agree on it. Ethereum updates its state roughly every 15 minutes, at which point transactions are considered confirmed.

This approach has two major problems: it doesn’t scale, and it doesn’t allow enough customization for real-world apps. The key insight is that apps shouldn’t run inside a single global virtual machine but should continue to run independently, using their own servers and architectures, while posting their ordered transactions to a decentralized Layer 1 database. Layer 2 clients can read this ordered log and independently compute the app’s state.

This new model is both scalable and flexible, able to support large platforms like PayPal, Zelle, Alipay, Robinhood, Fidelity, or Coinbase with only moderate changes to their infrastructure. These apps don’t need to be rewritten for EVM or SVM; they just need to post transactions to a shared, secure database. If privacy matters, they can post encrypted transactions and distribute decryption keys to specific clients.

Underlying principle: How a 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 from every app globally, which is computationally and bandwidth intensive. The bottleneck is that each validator must fully execute the global state transition function.

With a world database, validators only need to ensure data availability, block ordering, and that once finality is reached, the order is immutable. They don’t need to execute any app logic, just store and propagate data in a way that ensures honest nodes can reconstruct the full dataset. Validators don’t even need to receive a full copy of every transaction block.

Erasure coding makes this possible. For example, suppose a 1MB block is split via erasure coding into 10 pieces for 10 validators, each receiving about a tenth of the data, but any 7 validators can combine their pieces to reconstruct the entire block. This means that as the number of apps grows, the number of validators can also grow, while each validator’s data load remains constant. If 10 apps generate a 1MB block with 100 validators, each validator only deals with about 10KB of data; with 100 apps and 1,000 validators, each validator still handles the same amount.

Validators still need to run a consensus protocol, but only to agree on the block hash order, which is much easier than agreeing on global execution results. The result is that the world database can scale with the number of validators and apps, without overloading any validator with global execution.

Cross-chain interoperability with a shared world database

This architecture introduces a new challenge: interoperability between Layer 2 chains. Apps within the same virtual machine can communicate synchronously, but apps running on different L2s cannot. For example, with ERC20, if I have USDC on Ethereum and you have JPYC, I can use Uniswap to swap USDC for JPYC and send it to you in a single transaction because USDC, JPYC, and the Uniswap contract all coordinate within the same virtual machine.

If PayPal, LINE, and Uniswap each run as independent Layer 2 chains, we need a secure way to communicate across chains. To pay a LINE user from a PayPal account, Uniswap (on its own chain) needs to verify the PayPal transaction, perform multiple swaps, initiate a LINE transaction, verify completion, and send the final confirmation back to PayPal. This is Layer 2 cross-chain messaging.

To accomplish this securely and in real time, two elements are required:

The destination chain must have the latest hash of the source chain’s ordered transactions, typically published as a Merkle root or similar fingerprint on the Layer 1 database.

The destination chain must be able to verify the correctness of the message without re-executing the entire source chain program. This can be achieved via succinct proofs or Trusted Execution Environments (TEEs).

Real-time cross-chain transactions require a Layer 1 with fast finality and real-time proof generation or TEE attestation.

Moving toward unified liquidity and frictionless finance

This brings us back to the bigger vision. Today, digital finance is fragmented into closed systems, forcing users and liquidity to concentrate on a handful of dominant platforms. This centralization limits innovation and stifles competition for new financial applications in a fair environment. We envision a world where all digital asset applications are connected through a shared foundational layer, enabling liquidity to flow freely across chains, payments to be seamless, and applications to interact securely and in real time.

The Layer 2 paradigm makes it possible for any application to become a Web3 chain, while a high-speed Layer 1 serving purely as a world database allows these chains to communicate in real time and interoperate as naturally as smart contracts on a single chain. This is how frictionless finance is born—not through a single mega blockchain trying to do everything, but through a universal foundational layer, enabling secure, real-time cross-chain communication.