Cofounder of Ethereum Foundation and Bitcoin Magazine Vitalik Buterin shared his thoughts on the future of blockchain, the state of ethereum and more during a small, private event held in San Francisco last week. Hosted by the Blockchain at Berkeley student-run organization, Origin and Steve Chen, cofounder of the Modernist social club, Buterin’s fireside chat with Jason Hsu provided insights into major topics currently facing the crypto community.
The reason why I hosted the panel with Vitalik is that I believe the industry needs a correction of course, as too much money comes too quickly. I feel too much focus is on the price of crypto and not on executions of projects. I’ve got to know Vitalik for over a year and see him as guardian of Ethereum. In fact he gave me the nickname “Crypto Congressman,” which now becomes my mandate in Taiwan’s Parliament. I invited Vitalik for a deep conversation to express his concern and give an update on the development of Ethereum. It’s important to think the force driving cryptocurrency shouldn’t just be money-seeking, but rather we should think how blockchain technology will bring about a fundamental shift in the way our trust system is built, Hsu told me.
Before the panel began, I had the chance to ask Buterin a few questions about what he is personally working on.
Recently, I am spending a lot of time working on the proof-of-stake and sharding protocols. This is what the Ethereum research community is focusing on more than anything else at this point. We think that proof-of-stake and scaling are both really important and there has been a lot of progress on improving the algorithms and the development of multiple limitations over the last couple of months, Buterin told me. I’ve also been looking at the economic analysis of transaction fees and how transaction fee algorithms can be improved to basically cut fees down and make the protocol alignment centers better and more efficient. Those are the main things I’ve been working on myself.
When asked about the progress on the Ethereum Casper protocol, Buterin was enthusiastic, noting that the ethereum community has been making headway.
“I think that there has been a lot of frameworks for state channels coming out recently. The Casper protocol is getting much closer to being finalized at this point. It’s just pending review on academic analysis,” Buterin said.
Developments For The Future Of Blockchain
Buterin commented that the biggest elephant in the room facing the blockchain space at the moment is the high ratio of hype being generated versus actual use cases.
The amount of sustainable usage of blockchain is very low. Although it exists, there are a lot of people giving value to cryptocurrencies, yet the amount of useful stuff happening is still much lower than the $200 billion market cap makes it seem. The main challenge for the industry as I see it is basically understanding how to bridge that gap and get to point where there is $200 billion in some sense of actual final value being generated, Buterin explained.
Moreover, Buterin touched on the state of privacy on the blockchain, pointing out that there are currently no good ways to preserve privacy on the blockchain.
“Currently, there are no good ways to use blockchain while preserving privacy. There have been good efforts to solve this using Zcash for example, along with research on top of Ethereum. However, there is still a way to go in terms of preserving privacy on the blockchain,” Buterin said.
Regulatory actions have also been a recent topic of interest for the crypto community. While smaller countries like Malta have set up regulations, the United States is still struggling to come up with actions that would help advance the cryptocurrency market and blockchain space.
Malta (Public Domain Pictures)
According to Buterin, the regulatory openness that is currently required should focus on ways to make it easier for people to use small amounts of cryptocurrency.
I want to be able to walk into a convenience store, get a card and pay a small fee to start using Bitcoin Cash. Allowing people to use small amounts of cryptocurrency for everyday use is valuable within crypto, and also particularly for use cases of blockchain that go beyond crypto. Even non-financial blockchain use cases still require transaction fees. If we can reduce this friction with one trip to the convenience store, it would be simple to start using cryptocurrency, Buterin noted.
However, Buterin mentioned that governments looking to create regulations must first understand the significance of services that are useful for the blockchain space in general.
One simple use case would be to design national ID cards to sign digital signatures. Another more far-fetched example would be state-issued cryptocurrencies. This would be an interesting way for small counties to put themselves on the map and provide some economic power in the world economy. Also, on the regulatory side, cryptocurrency exchanges, project fundraising, etc. need to have crypto-friendly regulations. Most importantly, encouraging a strong academic ecosystem is also needed for governments looking to pass regulations.
The State Of Ethereum
While the future of blockchain and regulations remain of high interest, the price drop of Ether, the currency of Ethereum, is starting to attract curiosity. While Ethereum has been the platform of choice to kickstart blockchain projects via initial coin offerings (ICOs) in the past year, Buterin mentioned that ICOs have become “old and boring.”
Buterin also discussed the current developments of Ethereum, stating that he is satisfied with a number of things such as the progress of state and plasma channels. In terms of scalability, Buterin said that the Ethereum foundation is looking to authorize scalable properties and reach higher levels of consensus. While this is moving slower than expected, Buterin revealed that the solution is much better than he had imagined five years ago.
“I am seriously looking forward to when the cryptocurrency community basically passes away with proof-of-work,” said Buterin.
Yes, Google Tried Hiring Buterin Recently
While Buterin was able to share a good deal of insights in regards to the future of blockchain and cryptocurrency, he ended his discussion on a humorous note, explaining how Google tried to hire him recently.
“There were rumors a few months ago that Google wanted to hire you. I take it you are in town for your job interview,” Hsu jokingly asked Buterin.
“I hope we all realize that this was a joke. Some random HR person from Google emailed me, most likely because some machine learning algorithm analyzed my GitHub and saw that I had some high score in the international Olympiad. Apparently, I fit the blueprints as a great candidate to hire at an intern salary,” Buterin laughed.