What is a Rollup? - Crypto in Plain English - Episode 269 - by cryptohunt.it

What is a Rollup?

Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English. My name is Christian Byza, Co-Founder of Cryptohunt.it and I am your host of this daily show.

Today, we talk about Rollups. Don’t roll your eyes - this is a very important concept to understand today’s state of blockchains.

Even as a casual listener of this podcast, you’ll have realized by now: Blockchains are not yet ready for prime time. In an ideal world, they would be fast enough, secured against fraud, and not controlled by just a few people or companies. But just like balancing your work, your life, and getting a decent amount of sleep, those three can be competing priorities.

Today’s blockchains achieve some of those tradeoffs, while they struggle with others. Ethereum, for example, has stayed safe and out of the hands of single actors who could have an overly strong influence, but this is at the cost of efficiency. Transactions are still slow and expensive.

Rollups are a practical interim solution to those tradeoffs. Let’s say you are buying a few dozen apples at a farm, but they all come loose. With your own hands, there are only so many you can carry at a time, so things become cumbersome pretty quickly.

But suddenly you have an idea: Why don’t I just get a box and carry them in batches? You find one in the corner, transfer your apples from the pile to the box, carry the box to your car, and take them out.

That’s how rollups work too. They find ways to process transactions more efficiently than today’s big blockchains like Ethereum can. They are secondary blockchains, in nerd-talk also called Layer 2 blockchains, that communicate with Ethereum but get the job done outside of it.

One such example is Optimism. To make things fast, it will process transactions in batches outside of Ethereum. So, why is it faster than Ethereum in the first place? Because it makes some deliberate tradeoffs. Instead of validating all transactions, it just accepts them, assuming they can be trusted. This is why this process is also called “optimistic rollup”. If things are disputed later, it will then make corrections. In essence, it compromises on security for the benefit of speed and cost.

Sounds like we are not quite there yet? You are right about that. But until Ethereum and co solve all trade-offs, rollup blockchains like Optimism are a good alternative.

And If you want to learn more about Ethereum or Optimism you can also head over to the respective project pages on Cryptohunt.it where we give you even more insights and you can leave a review about them. Find direct links in the shownote of this podcast:

https://www.cryptohunt.it/projects/optimism

https://www.cryptohunt.it/projects/ethereum

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.