ALEO directly addresses the pain points of Ethereum and leads the next wave of cryptocurrency!

Is it possible for Aleo to surpass Ethereum and become the next third wave?

When we talk about this point of view, perhaps many people have begun to feel ridiculous and even want to laugh. But please allow me to analyze it objectively. The fundamental reason why we believe that one thing surpasses another is that the latter is more advanced. The advancement of technology and the needs of the times are indispensable. Taking mobile phones as an example, the reason Apple was able to surpass Nokia was because it was more advanced and met the needs of that era. Likewise, the same is true for Ethereum.

Aleo solves Zcash and Ethereum pain points

Aleo is the first platform to provide complete privacy protection applications, in other words, a public chain based on zero-knowledge proof privacy protection.

Aleo achieves this goal by protecting data on the network through blockchain’s decentralized system and zero-knowledge encryption (ZEXE): providing users and application developers with absolutely private computing and data protection.

As Aleo’s COO said at the Ethereum Developer Conference: “Aleo is a bit like the product of Ethereum and Zcash.”

In this way, it is easier for us to understand some of the things Aleo does, that is, it is a product based on Zcash and Ethereum, which improves the shortcomings of Ethereum’s privacy protection and makes up for the singleness of Zcash.

So, let’s explore the possibilities of Aleo. Although it is unlikely to surpass Ethereum ETH anytime soon, can we expect it to be blessed in this era?

1. Efficiency, safety and cost

Let’s take a deeper look at the wave of developments in the blockchain space. First of all, there is no doubt that the emergence of BTC completely subverted our understanding in 2008 and became the first blockchain to achieve decentralized and peer-to-peer transactions. Since its birth, its value has soared by an astonishing 90 million. times.

Following closely behind is Ethereum, leading the second wave. Its innovation lies in the introduction of EVM smart contracts, which has enabled ETH to achieve an increase of more than 20,000 times. This breakthrough has greatly promoted the rapid development of the entire ecosystem. However, as time goes by, the problems faced by blockchain have become increasingly prominent, especially efficiency, security and cost issues.

In order to solve these problems, improving the efficiency of blockchain has become a top priority. The current mainstream expansion solutions include OP rollup and ZK rollup. These solutions have been applied to some well-known projects on L2, effectively reducing costs and solving the problem of high gas costs.

In addition, security is also a focus in the blockchain field. Although transparency and openness are a major feature of the blockchain, which breaks some of the limitations of the traditional Internet, with the frequent occurrence of hacker attacks and theft of customer assets, we are aware of the importance of privacy. However, Ethereum has not considered privacy protection from the beginning of its design and does not support it natively.

Why did Aleo build the L1 public chain from scratch?

Of course, although Ethereum ETH has some privacy projects at the L2 layer, they are not native projects. This means that in some ways, it may require compromises and trade-offs. However, when we talk about Aleo, the situation is completely different. Aleo has natural advantages in privacy, scalability and efficiency.

It has no gas fee because it is an L1 public chain and uses all off-chain calculations. Different from Ethereum’s L2 expansion plan, Aleo’s ZK rollup is also calculated off-chain. Therefore, on Aleo, we do not need to worry about costs during peak periods. During the test network, although ecological applications incur some costs, these costs are very low. Additionally, these costs do not increase as the network fluctuates; this is an important difference between Aleo and Ethereum. In addition, Aleo also integrates hash functions. Although zksnarks themselves are not quantum resistant, by integrating hash functions, Aleo is quantum resistant to a certain extent.

2. PoSW and Coinbase Puzzle

From a certain perspective, PoSW and Coinbase puzzles are Aleo’s original mechanisms. According to the founder of Aleo, this mechanism applies not only to L2 of Ethereum ETH, but also to the ZK project. Through the PoSW mechanism and zprize competition, Aleo has gained significant advantages in hardware acceleration of zero-knowledge proofs, which is unmatched by Ethereum ETH after its transformation.

It is worth noting that Aleo’s PoSW calculation is different from the meaningless calculation of BTC and pre-Ethereum EHT, it is a meaningful calculation. This is because PoSW belongs to the calculation of the core components (MSM and NTT) in zero-knowledge proof calculations, rather than a large number of meaningless calculations. There is an essential difference. Although some professionals on Twitter were skeptical about this mechanism of Aleo and whether it was a pure ZK project, from our perspective, this just shows the subtlety of Aleo’s design. Time will tell, let’s wait and see.

Aleo currently provides a full-stack solution combined with zero-knowledge, ensuring that every layer of the application stack is programmable, usable, and decentralized for private computing.

And from the Leo programming language, Aleo Studio development environment, tool side, RPC, development, deployment and sustainability of privacy protection applications, etc.

Developers don’t need to be cryptography experts to write privacy-preserving applications.

At the same time, A16z’s Katie Haun and Ali Yahya’s core argument for investing in Aleo is: a new type of computer that performs special operations.

Its arguments can be mainly explained in two aspects:

(1) Currently, many public chains are completely transparent in design, but do not allow privacy;

(2) Many public chains cannot scale to millions or more users.

Aleo’s leading advantages

ZEXE and zkCloud: Aleo uses the ZEXE protocol as the system foundation, which expands the privacy and programmability that were previously achieved by a single application system alone.

Therefore, it has expanded into decentralized applications, including Defi, games, identity verification, etc., which provides an ideal platform for its incubation.

And solving the problem of concurrent processes sharing a ledger without guaranteeing integrity or confidentiality requires some kind of operating system to manage user-defined functions.

This management requires:

• Provide process isolation
• Determine data ownership
• Handle inter-process communication

In ZEXE, users perform state transitions offline, and the process produces a proof, which is bundled into an on-chain transaction.

This transaction updates the state of the system by consuming/creating on-chain records.

zkCloud is the interactive environment in Aleo.

zkCloud is an off-chain, trustless computing environment where programs are executed privately, securely, and cheaply, with unlimited runtime.

Through zkCloud, Aleo abandons the previous recalculation and consensus method of running the global VM every time, because this would waste a lot of time and computing power. It overcomes these limitations by decoupling the calculation operation from the state maintained by the blockchain, in zero Proof of knowledge enables Aleo to achieve complete programmability and privacy.

Not only that, but the details of the interaction (participants, amounts, smart contracts, etc.) will be hidden through a series of recursive zero-knowledge proofs. External proof simply presents the end result of this process.