The Future of Web3: P2P Transactions Explained by Yellow Network's Captain

Alexis Sirkia, Captain of Yellow Network, who talked about Web3's P2P future

In a recent interview, Alexis Sirkia, Captain of Yellow Network, shared insights about the significance of peer-to-peer (P2P) transactions in overcoming the scalability challenges faced by blockchain technology. He emphasizes that Web3 needs a trustless communication layer to facilitate efficient and secure digital interactions without central authorities intervening.

Key Takeaways

Web3's potential lies in its ability to automate processes and remove the need for human intermediaries.
Trustlessness is a core principle, allowing for autonomous operations without relying on centralized entities.
The current infrastructure for Web3 is evolving, drawing parallels to the early days of AI development.
Yellow Network aims to provide the missing infrastructure layer necessary for effective P2P transactions.
The P2P layer enhances efficiency and reduces overhead, significantly speeding up transactions.

Exploring the Web3 Landscape with Alexis Sirkia

Blockchain technology has progressed significantly, gaining recognition from both governments and institutions for its potential. Yet, key issues such as speed, scalability, and decentralization continue to challenge its growth. As Alexis Sirkia articulates in his conversation with crypto.news, a gap remains in Web3 infrastructure that needs to be addressed for broader adoption.

The Benefits of Web3 and DeFi Over Traditional Finance

crypto.news: What are the benefits of Web3 and DeFi compared to traditional finance, applications, and centralized servers?

Alexis Sirkia: The most notable advantage is "trustlessness," where reliance on human intermediaries is eliminated. Decentralized architectures like Bitcoin and Ethereum allow for the development of applications that automate processes traditionally controlled by centralized figures.

In a Web3 environment, autonomous entities are created—like smart contracts and DAOs—that manage business logic without human oversight. This empowers businesses to operate efficiently and independently, free from risks of corruption or bias. Imagine launching a startup that automatically operates via smart contracts—much like how Uniswap functions. Web3 aims to liberate people from tasks that computers are better suited to handle, making compliance, trust, and supervision less reliant on human involvement.

Real-World Use Cases for Trustlessness

CN: What are some examples where trustlessness could be advantageous in real-world applications?

AS: Consider Amazon, which creates a trustless environment for transactions by acting as an intermediary between buyers and sellers. In a Web3 framework, this intermediary role could be replaced by smart contracts, allowing autonomous systems to manage transactions without needing central authorities.

The power of Web3 lies in the ability to remove human reliance for assurance, enforcement, and operations. While there are trade-offs, such as smart contracts lacking flexibility in unforeseen scenarios, the system fundamentally shifts decision-making away from people to reliable algorithms and code.

The Current Status of Autonomous Web3 Applications

CN: Where do you believe we currently stand in developing fully autonomous Web3 applications?

AS: We are at a similar stage to AI around the year 2000. Though artificial intelligence concepts have existed since the 1960s, the required infrastructure was not ready back then. The term “Web3” was only introduced in 2014, and in the past decade, we are just starting to build robust infrastructure.

Yellow Network plays a crucial role in this development. With Bitcoin, Ethereum, and Yellow, we are on the cusp of creating an advanced framework for decentralized, autonomous applications.

The Missing Layer in Web3 Infrastructure

CN: Can you explain the infrastructure gaps and what Yellow is providing?

AS: Absolutely. Bitcoin and Ethereum laid the groundwork for trustless transactions by eliminating intermediaries, but Web3 lacked a reliable method for P2P communication. This is where Yellow comes in, enabling cryptographically secure interactions directly between parties without centralized servers or exhaustive blockchain verification.

Importance of the P2P Layer

CN: Why is establishing this P2P layer critical?

AS: Most transactions occur directly between parties in the real world—like shopping at a store—where the only final settlement matters. In contrast, existing Web3 frameworks often require validation from numerous validators for every single action, which is unnecessary for many exchanges.

Yellow functions similarly to the Lightning Network for Bitcoin, enabling two parties to establish a channel and execute a series of off-chain transactions efficiently. Once settled, the blockchain is only involved at the end for settlement.

Practical Benefits of Yellow's Solution

CN: What practical advantages does this provide?

AS: We enable fast, trustless transactions without the need for extensive validation from thousands of computers. Transactions occur almost instantly between two parties, similar to operating a localized blockchain. Since it offloads much of the workload, Yellow enhances scalability beyond what is achievable on-chain.

Information Storage and Dispute Resolution

CN: How is information stored, and how would the smart contract resolve disputes?

AS: Every transaction in our state channel is cryptographically signed and linked, creating a chain similar to a mini blockchain where the latest transaction prevails. In disputes, the smart contract checks which party holds the most recent signed proof to determine validity, ensuring no ambiguity.

Moving Forward with Yellow

CN: What is the most compelling use case for your P2P system?

AS: Initially, we focused on trading—launching a broker named NADAs and protocol called NLAX. However, we have seen unexpected use cases emerge post-launch of the Yellow SDK, with developers creating applications we never envisioned.

For instance, at the ETH Prague hackathon, projects using Yellow showcased a range of applications, from payment systems in raves to gaming interfaces. As we approach our mainnet launch, it's thrilling to witness real developers creating tangible businesses using this technology.

Emerging Trends and Perspectives

CN: Are there any overlooked trends or perspectives in the current discourse?

AS: Certainly. In Bitcoin's early days, understanding its implications was limited, and skepticism was pervasive. Many who grasped both the technological and economic aspects made informed early bets. Similar skepticism exists today regarding Ethereum's potential.

Now, we see again that understanding the depth of programmable trust and direct P2P transactions is essential, as it signifies a distinct evolution in how business can be conducted. The shift toward direct P2P systems without central oversight represents a transformative moment that many have yet to fully comprehend.