Unitalk | Founder of Ethereum: Vitalik Buterin
Originally posted on 16, Feb. 2018 at Unitimes.
It is said that 2018 is the initial year of blockchain applications, and distinctive applications are being exploded exponentially. According to statistics, more than 1,000 applications are built on the Ethereum platform, including “Crypto Kitties”. Well, Rome was not built in one day. What behind Ethereum is a diligent team that are comprised by global leading 23developers.
Vitalik Buterin is the founder of Ethereum, co-founded Bitcoin Magazine and has been named to the Forbes Crypto Rich List.
Why did you choose to start working on blockchains?
I first heard of Bitcoin in early 2011, back when I was still in high school. My dad told me about it, and I saw people talking about it on the internet around the same time, and I was already interested in open source software projects like Linux, so I thought this was something interesting I should explore. I immediately went onto the bitcoin forums, and decided to try to learn more. I found someone on the bitcoin forums who was willing to pay me 5 BTC (then 4 USD) per article to write articles for his blog. I earned 20 BTC from this, and spent 8.5 on a T shirt.
I was immediately excited by the idea that a community of a few thousand people just like myself with computers just like my own could independently create an entire new financial system from scratch, without relying on any existing institutions or intermediaries.
After this I co-founded Bitcoin Magazine, a web and print publication that talked about all things bitcoin, as well as some related topics in math, economics, politics, decentralized tech, computer science and cryptography, and this began to take up more and more of my time.
What inspired you to quit the University and travel around the world?
In 2013, I realized that even while I was in university I was spending more than 30 hours a week working on Bitcoin projects. I visited a bitcoin conference in San Jose, and there I realized that the bitcoin industry was real — it was not just a few people hiding behind their computers, there were actually over 1000 people trying to build actual companies, in some cases already getting considerable traction. I saw that this was a once in a lifetime opportunity to do something interesting, so I decided to take a term off of university to spend all of my time going around the world looking at and working on projects and interacting with other developers.
After four months of traveling, I settled in Israel, where I met several teams who were working on the next-generation applications using blockchain technology, going beyond bitcoin the currency. I found this direction interesting, but I thought that the projects there at the time were not sufficiently powerful for the job. The common approach at the time was to create a protocol that would have several transaction types, with one or two transaction types for each application. I came up with a more generalized approach of creating a blockchain with a general-purpose built-in programming language.
When I first wrote the Ethereum white paper, I emailed it to some friends, and they emailed it to their own friends. Over the next month, about 10–20 people emailed me saying they want to participate. They would become the initial founding team.
If there’s a chance to do it all over again, will you come up with the same idea? Or anything to change?
I would change some technical details, like making the protocol more parallelization-friendly from the start, and I would have created and managed the team in a different way in many cases, but I would not have changed the core vision.
Why did you set Ethereum as a Non-for-profit instead of profit organization?
I thought that it was important that Ethereum must be a neutral project created for the benefit of the whole world that is not owned or built to enrich a small group of people. So it seemed more appropriate to have a non-for-profit foundation than try to create Ethereum as a for-profit company.
What are the difficulties that Ethereum needs to solve so far? What are the future needs?
The main challenges are technical, and break down into three categories:
* Scalability — increasing the capacity of the blockchain in terms of raw transactions per second. Currently ethereum can do ~15 per sec, but achieving mainstream adoption will require thousands of times more.
* Privacy — it should be possible to use blockchain applications without revealing all of one’s private data.
* Security — risk of getting one’s funds stolen, losing one’s private keys, bugs in smart contract code, etc should be greatly reduced.
There are also challengers in usability, though those are more a responsibility of each application than of the core protocol and platform itself.
There are already many solutions being worked on to all of these challenges. For example, there are teams working on state channels, sharding and Plasma to solve scalability challenges. The basic tools to greatly improve privacy are already there now that the Byzantium hard fork has gone through and its cryptographic features are available, though more work still needs to be done on building infrastructure to take advantage of them.
As for security, there are two parts to security. First, there is security of Ethereum itself. This will be improved with the Casper proof of stake algorithm, which is finally nearing completion, with a testnet already running, and implementations in other languages already being written. Second, there is the security of applications on Ethereum. This will be solved with a combination of techniques, including innovation in programming languages on top of Ethereum, such as Vyper (https://vyper.online), as well as advances in formal verification, and better smart contract standards.
What is the latest technical update on sharding? Any new innovative ideas recently?
There are now at least three independent development teams working toward implementing a specification for Ethereum with sharding, which is itself rapidly moving forward. We are working on many scalability technologies that will make sharding easier to implement and more powerful, including stateless clients, proposal/consensus/execution separation, improvements to Merkle trees and virtual machine optimizations. We are moving quite quickly toward having a testnet.
After the DAO hack, what implementation did you do to keep the high quality blockchain ecosystem in Ethereum?
We greatly increased our emphasis on promoting good coding practices, improving security through formal verification, and adding programming language features to make it easier to write secure code. Also, I think that developers of similarly complex projects today are much more careful before putting large quantities of money into their contracts.
What is the vision and goal of Metropolis？
The main focus of Metropolis is to get the privacy features working, including support for ring signatures and zero knowledge proofs, and the fork happened successfully so the technology is now there for people to start building on it. Now we just need more people to build the infrastructure that will make building privacy-preserving applications easier for regular developers.
What will Ethereum do to incentivize miners to support the network when it moves over to a proof of stake consensus algorithm, as there are economic reasons for them to continue supporting the chain with the old proof of work algorithm?
The transition from PoW to PoS will be gradual, and come in stages. The first stage will be a hybrid proof of stake implementation that uses proof of work to create blocks, and proof of stake to add security by “finalizing” them. Proof of work will still exist, though mining rewards will be reduced. Then later there will be a second stage that removes proof of work completely.
If miners fork off at some point to continue supporting a PoW chain (and implement a hard fork to delay the difficulty ice age) then there will obviously be a third “flavor” of ethereum along with ETH and ETC. I think that this is not likely to happen, because miners will simply stick with ETC and other cryptocurrencies like Zcash. Miners that have earned enough ETH may also choose to become validators in our proof of stake system, or “mine” for ethereum-based second-layer systems like Golem.
Between public chains and private chains, what kind of chain has more potential?
Private chains do solve real problems; for example, public chains do not have anywhere close to the level of scalability required to handle large-scale enterprise applications, or really anything with mass adoption at present. A private chain with fewer nodes, where each node is run by a large organization and so can run on top-quality hardware with much more processing power, memory and bandwidth can handle these issues much better; an existing private chain implementation of Ethereum, Istanbul, can handle hundreds of transactions per second.
However, we have seen that so far companies trying to push private chains have not gotten very far, and one of the reasons why is that even though private chains are cheaper in technical costs (ie. paying transaction fees), they are more expensive in social costs. Getting a bunch of competing bankers in a room to agree on a common standard is hard.
I think in the long term we will see a combination of public and private approaches, and many of the problems with both extreme approaches can be solved with a hybrid system, using a private chain which is being audited and anchored into a public chain. Plasma is one very good way of doing this.
In general, how would you describe the future of Ethereum?
I hope that over the next few years, we will continue to release protocol upgrades to solve our technical challenges, including Casper proof of stake and sharding, and second-layer solutions such as Plasma and state channels for scalability and various zero knowledge proof technologies for privacy continue to be built.
Once users are confident that transaction fees are low, and will stay low even with much higher usage, I think we will see many more applications appear. There are many things that people are excited about doing on ethereum, including decentralized insurance, financial applications, applications in the supply chain space, healthcare, identity, internet security and many more areas, and there are already many tests in these areas, but I hope that over the next few years these tests turn into reality.
What is the future mission of the Ethereum?
My goal in creating Ethereum was not to create any particular application; it was to create a platform that was open, decentralized, transparent, easy to use and free for anyone to participate and build things. I think that this kind of platform can be good for humanity, though at the start I had no idea what specific things would be built on top. This is the beauty of creating a general-purpose system: the best part is seeing the creativity of your own users come up with applications that even you could not imagine.
I’m excited about the promise that transparent, easily accessible, and trustworthy decentralized applications being widely used across many industries can bring. I like how the platform empowers individual developers, and gives even 15 year olds the ability to build applications using infrastructure that gives the applications a similar level of security and trustworthiness to what was previously only available to large corporations. Obviously, blockchains cannot solve every problem of security and trust, but they can get us a lot of the way there.
Which industry/business do you think will have the better connection with the blockchain technology?
Ethereum is unique in how diverse the users are. We see individual developers building things, non-profit groups, open source communities, small companies, large companies, central banks, people from very many continents and countries, and from many industries. There are applications in finance, logistics, identity managements, digital assets, registries, games, healthcare, decentralized reputation systems and many more areas. Finance makes sense as an initial area of applications because existing systems are often far behind the times, requiring doing many things by hand or in person; traditional financial systems are certainly not easy for developers to work with. However, as transaction fees decrease, I think many of these other industries will become more viable.
Where will those new startup companies go in the future? Any advice for them to be sustainable?
I think it is most important for projects to pick one specific area where they can provide real value and are in a better position to provide that value than any other project, and focus on that. For example, despite clear market demand, we still do not have any widely available easy-to-use ERC20 tokens that are backed by physical assets (eg. gold, fiat currencies, other raw materials), with the possible exception of Tether, which is widely viewed as untrustworthy.
Many projects that try to do this also go on to make very complex plans around making a DAO, making a very complex private chain for high-speed trading, etc, not realizing that all the market wants are a simple ERC20 token. The business can create the gold-backed token, other people in the ethereum ecosystem are already coming up with more and better ways to trade it, including second-layer scalability solutions. Ethereum is fundamentally about a community that builds different things that work together with each other, not everyone trying to create their own personal empire where they try to build an entire ecosystem like wechat.
If you are making a token, make a token, and build it in a standard way so that it supports all wallets and trading systems. If you are making a wallet, build it in a standard way so that it supports all tokens. If you are making a scalable payments solution (eg. like Raiden or Plasma), build it in a standard way so that it supports all tokens, and ideally expand it to other applications as well. Everyone should focus on their own piece of the ecosystem, this way we have the least duplication of effort, and we can all help each other prosper.
Do you think real decentralization is possible? To what extent?
I’m hoping that Ethereum and applications on it can become as decentralized as possible. Obviously, full decentralization of everything is impractical, but it’s definitely possible to build systems that are much more decentralized than what we have today, and provide real value by being decentralized.
It’s also important to note that decentralization itself is not the only thing that makes Ethereum valuable. People also value its openness and accessibility as a platform, the fact that anyone can just go and start using it to build things. It in some ways is also very convenient: you can upload a program, and that program will run as an application that people can interact with, and you do not need to maintain it, worry about your server crashing and being restarted, and similar issues. There are many things that I would consider building on top of ethereum that do not even require decentralization.
You know there’s so many predictions about the price of Ether at present, what do you think about that?
I do not make predictions about the price, it’s too hard. To me, it’s not about the price, it’s about what people do with the technology and building things that are useful.
If I want to learn how to build applications, how do I get started?
Learn how to code if you do not know already and look at the applications that other people have written. If you go to Ethereum website, there are some tutorials to teach you step by step.
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