The future of cryptocurrency: from speculative asset to the foundation of the internet

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

Original Author: Rhythm BlockBeats

Original Source:

Repost: Mars Finance

Editor’s Note:

Cryptocurrency is going mainstream, but the way it happens may be completely different from what 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 underlying layers of digital finance and the internet, becoming the secure communication layer between applications—much like the transition from HTTP to HTTPS.

Today, stablecoin transaction volume is approaching that of Visa and PayPal. Web3 is “invisibly” entering daily life, and the Layer 1 of the future will no longer be a “world computer,” but rather a “world database,” providing a trusted, shared data source for millions of applications.

This article takes you deep into the logic behind this shift: Why is interoperability the key? Why will business models be restructured by the fusion of AI and blockchain? And why is the future of frictionless finance not a single giant chain, but a universal foundational layer?

The original article follows below:

Cryptocurrency is going mainstream, just not in the way you might think.

It won’t look like Bitcoin, Ethereum, or Solana. It won’t be dominated by NFT art or meme coins, and it’s unlikely to be about the EVM (Ethereum Virtual Machine) or SVM (Solana Virtual Machine) either. Blockchain will quietly integrate into the web as a secure communication layer between applications, similar to the move from HTTP to HTTPS. The impact will be profound, but for users and developers, the experience will hardly change. This transition is already underway.

Stablecoins, which are essentially fiat balances on blockchains, are currently processing about $9 trillion in adjusted annual transaction volume—on par with Visa and PayPal. Stablecoins are fundamentally no different from PayPal dollars, except that the blockchain provides a more secure and interoperable transport layer. After more than a decade, ETH still hasn’t been widely used as money and is easily replaced by stablecoins. ETH’s value comes from demand for Ethereum blockspace and the cash flows generated by staking incentives. On Hyperliquid, the highest trading volume assets are synthetic representations of traditional stocks and indices, not 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 buzz around Monad as the next major EVM ecosystem shows that crypto 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 just table stakes. The idea of developers massively migrating and locking into a new single ecosystem is not supported by the past decade’s experience. EVM applications can migrate between chains very easily, and the broader web isn’t going to be rebuilt on a single virtual machine.

The Future Role of Decentralized Layer 1: The World Database, Not the World Computer

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

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

In crypto terms, each app is already an app-chain. The problem is, these app-chains lack a secure, shared, trusted source of truth. Querying app state requires trusting a centralized server that could fail or be attacked. Ethereum initially tried to solve this with the world computer model: in this model, every app is a smart contract in a single VM, validators re-execute every transaction, compute the entire global state, and run consensus protocols to agree. Ethereum updates its state about every 15 minutes, at which point transactions are considered confirmed.

This approach has two main problems: it doesn’t scale and it can’t provide enough customization for real-world applications. The key insight is that applications shouldn’t run on a single global VM but should continue to operate independently, using their own servers and architecture, while publishing their ordered transactions to a decentralized Layer 1 database. Layer 2 clients can read this ordered log and independently compute application state.

This new model is both scalable and flexible, able to support large platforms like PayPal, Zelle, Alipay, Robinhood, Fidelity, or Coinbase with only modest adjustments to their infrastructure. These apps don’t need to be rewritten for the EVM or SVM; they just need to publish transactions to a shared, secure database. If privacy matters, 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 from every app globally, which is expensive in terms of computation and bandwidth. The bottleneck is that each validator must fully execute the global state transition function.

In a world database, validators only need to ensure data availability, block order consistency, and that once finality is reached, the order is irreversible. They don’t need to execute any application logic—just store and propagate data so that 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 into 10 pieces using erasure coding and distributed to 10 validators, with each receiving about a tenth of the data. Any 7 validators can combine their pieces to reconstruct the entire block. This means as the number of apps grows, the number of validators can grow too, while each validator’s data load remains constant. Ten apps generating a 1MB block, 100 validators, each handles about 10KB of data; 100 apps and 1,000 validators, each validator still handles the same amount of data.

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

Cross-Chain Interoperability on a Shared World Database

This architecture introduces a new problem: interoperability between Layer 2 chains. Apps in the same virtual machine can communicate synchronously, while those 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 Uniswap contracts coordinate in the same VM.

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

To complete this process securely and in real time, two things are needed:

• The target chain must have the latest hash of the source chain’s ordered transactions, usually published as a Merkle root or similar fingerprint 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 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 Towards 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 few dominant platforms. This concentration limits innovation and prevents new financial apps from competing on a level playing field. We envision a world where all digital asset applications are connected by a shared foundational layer, enabling liquidity to flow freely across chains, payments to happen 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 serving only as the world database enables 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, all-encompassing megachain, but through a universal foundational layer enabling secure, real-time cross-chain communication.