Netflix, Tacos, & Building Ethereum Scaling Solutions In Crypto Winter — oh my!

Who is Ed Felten & How Did He Create Arbitrum? 

Ed Felten, who taught Computer Science and Public Affairs at Princeton for 28 years, began researching crypto in 2012 because he loved the intellectual challenge and how transformative blockchain technology is. 

Unlike traditional softwares in which giant tech companies control everyone’s data through a centrally owned server, Ed loves how decentralized apps (Dapps) powered by blockchain smart contracts provide everyone with greater transparency & accountability. “Anyone can see the smart contract code and know that it will execute exactly as designed,” Ed says on our new Web3 After Dark Twitter Space. 

As crypto critics cried about scams and ponzi schemes, Ed remained focused on researching long-term, sustainable technologies that could tilt the balance of power back towards the people. 

In his crypto research in 2014, Ed realized that smart contracts would have trouble scaling due to how much computational power it takes to execute transactions.

Ed was right. In 2015, Ethereum creator Vitalik Buterin chose to prioritize maximum blockchain decentralization and security over scalability. Vitalik coined the term “Blockchain Trilemma” to explain why Ethereum couldn’t also choose scalability. If Vitalik had chosen scalability—which means the blockchain would’ve been able to handle tens of thousands transactions per second—he would’ve had to compromise on decentralization and security. Compromising decentralization and security would’ve made Ethereum far more susceptible to collusion/consolidation of power, coordinated attacks, and bugs.

Ed had done the initial research on blockchain scaling solutions that would eventually lead to Arbitrum, but he took a break from crypto to serve two years as the Deputy U.S. Chief Technology Officer in the Obama White House. 

After Ed returned to Princeton in 2017, he continued his blockchain scaling solutions research thanks to two graduate students. 

“One day in 2017, two Princeton graduate students, Harry & Steve, walked into my office,” Ed says.  “And they said to me, ‘hey, you know that research you were doing on blockchain scaling solutions in 2014? Let’s work on that further.’” This led to the three of them founding Offchain Labs, a startup building Arbitrum for secure Etherem Dapps. 

What is Arbitrum, Why Is It Important, And How Does It Work?

In technical terms, Arbitrum is a layer 2 optimistic rollup built on top of Ethereum. It gives Dapps scalability without losing any of Ethereum’s decentralization and security. 

Arbitrum, and other layer 2 scaling solutions in general, are important because they give developers and users faster transaction speeds and lower costs, which improves the user experience and makes possible more complex smart contract use cases. 

If you’re curious how Arbitrum achieves all of this, the simple explanation is that all the computational heavy lifting of executing transactions is done off the Ethereum blockchain on a second layer, so Ethereum only needs to do the lighter lift of verifying that all the transactions were executed correctly. 

“This means Arbitrum has just enough of a footprint on Ethereum to inherent Ethereum’s security, but it can scale up to do a lot more computation and storage,” Ed says.

Since its official mainnet release in August 2021, Arbitrum has enjoyed tons of usage, with over 700,000 unique users, over 10,000 smart contracts, and billions of dollars of assets bridged over. 

Its success is thanks to Ed’s efforts to make it incredibly easy for developers to start using Arbitrum. Developers can still write in Solidity, Ethereum’s smart contract programming language, and they can still use the same tools they already use. 

“For example, in hardhat, a standard Ethereum development environment, developers don’t need to change much,” Ed said. “They just need to change a setting so that the URL of the ETH node points to an Arbitrum node instead, and everything will just work.” 

Offchain Labs is also working on an upgraded version of Arbitrum called Arbitrum Nitro, which will give users even higher throughput and lower fees. Arbitrum Nitro is already in testnet, and current Arbitrum users will enjoy a seamless upgrade experience when it’s officially released. 

Ed believes Arbitrum is the present and future of Ethereum scaling, which is why he is focused on improving it even during crypto winters. Here’s advice on how to survive the crypto winter we’re entering:

“Builders who focus on thinking long-term and sustainably will come out on top during the next crypto boom,” Ed says.