What is Global Consensus? Which Products or Functions are Suitable for Establishment on Ethereum?

Title: Ethereum Community Member Polynya Explains Global Consensus and Appropriate Use of Public Blockchain

Content:
Should Ethereum be Adopted?
Introduction to Strict Global Consensus
Most Applications Do Not Require Strict Global Consensus
Objective Value is Suitable for Strict Global Consensus
Think in Terms of Functionality, Not Just Products
The Unique Selling Point of Blockchain
Vitalik, the founder of Ethereum, recently posted on Twitter a flowchart to help developers determine which development tools to use for their own products. He emphasized the importance of not following market trends blindly, such as zero-knowledge proofs, and instead considering the needs of the market.
Differentiating Between Demand-Oriented and Technology-Oriented Thinking
Vitalik hopes that developers will consider what tools to use based on the demand flowchart rather than solely from a technological perspective.
However, what is interesting is that the first question on the flowchart is “Will your application benefit from global consensus?” If it does, then blockchain is needed; otherwise, other tools are recommended.
What is Global Consensus? How to Evaluate Which Applications Are Suitable for Technologies Based on Global Consensus? Polynya, an active member of the Ethereum community, further defines strict global consensus similar to Vitalik and provides several examples.
Cryptocurrency infrastructure and scalability issues have been almost “solved” through technologies like proof of validity and data availability. However, the real question is which applications are suitable for blockchain.
To answer this question, it is necessary to understand what strict global consensus means. The term “strict” implies that public blockchains can only achieve objectivity and require strict agreement from every participant in the global network on a set of objective outputs (such as transaction information) for it to be appropriate and meaningful to use a public blockchain.
Examples that do not require strict global consensus include:
Data storage: In almost all cases, not every person in the world needs to agree on all stored data. Depending on the importance of the data, there are various storage options available, from cloud storage providers to decentralized options like IPFS or BitTorrent, eliminating the need to store everything on Ethereum.
Governance: Governance is largely subjective and complex. Public blockchains can provide assistance in certain aspects, such as AAVE’s governance module, but it is inappropriate to force complex variables of governance into a restrictive objective framework.
Legal contracts: Law is also complex and subjective, with different cases requiring comprehensive considerations. Apart from the simplest and most straightforward contracts, blockchain is unable to handle the complexity.
In fact, almost everything is unsuitable for strict global consensus. As Vitalik mentioned in the flowchart, if strict global consensus is not needed, there are plenty of other cool technologies available outside of public blockchains that can provide assistance.
Consensus only makes sense for objective value. The need for global consensus to protect value that relies on a large number of nodes accessing and settling globally is necessary. Currently, there are only a few suitable cases:
Objective currency: This need has existed since the emergence of Bitcoin 15 years ago and continues to be a major use case. Objective currencies or values take various forms and are used by frameworks like DeFi, NFTs, and DAOs. In contrast, subjective currencies (such as credit) are not suitable for implementation on public blockchains.
Objective identity: While most identities are subjective, with various issuing authorities and standards, identity and reputation are complex and multifaceted variables. However, limited forms of objective identity can be implemented on public blockchains, such as ENS or POAP.
Evading legal regulations and filling regulatory gaps: USDT and USDC are prime examples. Both are essentially centralized and fill the regulatory gaps, such as enabling fast cross-border payments, that regulations do not cover. However, this gap is not permanent, as the appearance of a well-designed USD CBDC can easily replace this use case and achieve it in a more efficient and decentralized manner.
Other niche needs, such as collaborative storytelling, exist. However, the primary use cases remain the aforementioned objective currency, objective identity, and filling regulatory gaps.
Additionally, some applications deploy on public blockchains that do not necessarily require strict global consensus but may indeed have value in pursuing incentives or exponential economics. However, Polynya suggests focusing more on applications with long-term, sustainable, and potentially product-market fit (PMF).
Of course, when combining the above functionalities, information requiring global consensus can be stored on Ethereum, while other information can be stored and executed off-chain, resulting in a more complete product.
Decentralized community media Farcaster is a good example. It uses public blockchains for storing and executing objective currency and objective identity while accomplishing everything else outside of public blockchains, such as community content storage.
As @randomishwalk mentioned, the unique selling proposition (USP) of blockchain is global consensus, and anything beyond this value should be handled with other tools, which would be better for both blockchain and the product itself.
Future products are expected to combine tools with different levels of decentralization based on functional requirements, isolating functions that require global consensus and utilizing blockchain to maximize product performance and the value of blockchain.
Global Consensus
Polynya