Dialogue with Vitalik: Future Outlook of Ethereum and Industry Thinking

Recently, the crypto video podcast UpOnly invited Ethereum founder Vitalik to have a conversation. The hosts were well-known crypto industry KOL Cobie and Ledger. They discussed in detail issues such as the progress of zkEVM, crypto wallet optimization, NFT prospects, and privacy challenges. The following is the compilation of this podcast by Chain Catcher, with some deletions.

Source | UpOnly

Compiled by Dong Yiming, Chain Catcher

UpOnly: Looking back, do you think there is anything on Ethereum that you regret doing that you might do differently if you were to do it again? Earlier you mentioned that having too many co-founders was one of the issues.

Vitalik: The co-founder thing is definitely a big deal. A few years later, a VC who gave up investing in Ethereum at the time told me that a very important reason was that they knew that a project with 8 co-founders would not work. I think he is right, having 8 co-founders is a big problem because they have very different values ​​and different ideas about what is a good project and what they want to create.

But I think the only thing that he underestimated is that after that, the initial structure did collapse, but Ethereum proved to have an amazing ability to rebound.

There are also some minor technical issues, such as we should not use Merkle Patricia Tree (Editor's Note: Merkle PatriciaTree, also known as Merkle Patricia Trie, is an improved data structure that combines the advantages of Merkle tree and prefix tree. It is an important data structure used in Ethereum to organize and manage account data and generate transaction set hashes.), but use Binary tree from the beginning.

I also wondered what would happen if Ethereum had used a different distribution model in the beginning? A more random example - maybe airdropping half or two-thirds of the supply to Bitcoin holders. What kind of cryptocurrency would it have been then? A fork of Bitcoin?

For example, what would happen if Ethereum did not have a centralized foundation at the beginning? Then people could participate in the decision-making of the project's later construction by buying in the pre-sale stage. Would this make Ethereum more reliable and neutral, and would it attract more people (who were originally offended by the idea of ​​centralization) to participate?

UpOnly: Do you think you will spend the rest of your life building Ethereum, or will you choose a successor and then do something else yourself, like farming?

Vitalik: I think Ethereum will be an important part of my life for a long time, but I will always do things outside of Ethereum, such as trying to write some works now. But I will not force myself to give up my work on Ethereum.

UpOnly: We know that your parents are also crypto enthusiasts, and they became very excited when they knew you were working in this industry. They closely follow this industry and participate in this ecosystem every day. What impact does this have on you?

Vitalik: This is actually quite strange. You know, my dad used to be an entrepreneur (founder of a software company) and now he has become a crypto influencer. And my mom used to study drugs and now studies optimistic rollups. I certainly hope everything is going well for them, and this will also make our family gatherings more interesting topics for discussion.

UpOnly: You once launched a poll on Twitter: If people wake up in 2035 and find that more than 80% of the world's transactions + storage are not in ETH, which currency do you hope it will be? There are two options, one is to choose from BTC, USD, ADA, SOL (ADA won with 42% of the votes), and the other is to choose from TRON, BNB, CNY and NEO (TRON won with 51.3%). What is the grand plan behind this poll? Or is it just a piece of garbage content?

Vitalik: I want to get a sense of what the community values, whether they fully appreciate that Ethereum is different from other cryptocurrencies - whether some cryptocurrencies are more evil - they may be more centralized and dystopian than the existing business model. Or do they feel that eventually cryptocurrencies will eventually merge into one - I think most people think this will be the case.

UpOnly: People like to say that X is China’s Ethereum or Ethereum from somewhere else. Does this bother you?

Vitalik: No, I don’t think so. People in the crypto community like to do crazy things and say crazy things. I’m used to it.

UpOnly: Why do you think NFTs have been so successful in capturing mainstream narratives? If you were to create a new white paper today, what do you think the future holds?

Vitalik: People's desire to own digital collections and digital property has been very strong for a long time, and NFT gives people this right. It also attracts more people because NFT is also the next mainstream use case of blockchain technology after cryptocurrency and DeFi.

I know artists in Ethiopia and Latin America are using NFTs. It is still far from perfect, but it is still an effective channel for some artists from non-rich countries to be seen by the public around the world.

Regarding the future development of NFT, I would like to give a very random example. Now people will issue certificates to those who climbed Mount Everest, and people can use this certificate to show off their achievements to others. Similarly, NFT can also play the same role as certificates, and it can be traded. If votes can also be traded in the future, then the Dow Jones Index may collapse quickly.

Like in traditional democracies, we have a long history of things like secret ballots, where not only are the votes held in secret, but you can't prove to anyone how you voted. If it were possible to prove it, some people might start forcing other people to vote, and democracy would be worse.

UpOnly: What do you think are the biggest research issues for Ethereum as a community?

Vitalik: The most important things now are about software construction and optimization. For example, the working mechanism of PoS, the related concepts of sharding and how it works, such as data availability, samples and how to execute these things and ZK SNARK. We all know how to use these concepts, but they still have many areas that need to be optimized to make them more effective. In addition, there is MEV.

UpOnly: What do you think is the biggest hurdle that crypto wallet products need to overcome?

Vitalik: I often remind the public about wallet security, especially about multi-signature and social recovery. We know that most crypto wallets have a private key, which is a 32-byte number. If you lose this string of numbers, you will lose the assets in your crypto wallet, or if your computer is hacked, you may also lose your crypto wallet.

There are many solutions, one of which is multi-signature , that is, users can set up an account with three passwords, one password can be stored in the computer, one in the mobile phone, and the third can be owned by your friend or an institution. You need 2 of the 3 passwords to transfer any funds. Even if your friend or third-party institution decides to betray you, they cannot steal any of your assets because they only have one key.

The concept of social recovery is this: if you have an account, you will choose some guardians and form a guardian list. More than half of the guardians have the ability to recover your account. For example, my cold wallet has 6 guardians, all of whom I trust very much, but they don't know each other.

Signatures from more than 4 guardians will allow the transaction to occur. I have also written an article about social recovery in my blog vitalik.ca, if you are interested, you can go and find it. There are still many technical difficulties that have not been overcome, so it is still difficult for Ethereum users to apply, but I have been working hard to make these technical barriers smaller.

UpOnly: The transaction fee on Ethereum is too high for people with smaller portfolios, which is also a barrier for them to enter Ethereum. You have previously said that in the future, each transaction fee on the Internet should not exceed 5 cents. Do you regard this as a goal for Ethereum? Do you think there is a reliable roadmap to achieve this goal on a large scale?

Vitalik: I think that to achieve this expansion goal, we need to sacrifice decentralization or security or other rights to some extent. If we completely use cross-chain. For example, there are different applications and ecosystems on 100 different chains. If one chain is attacked, the entire ecosystem will be threatened.

But when we create multi-chain applications, one chain can recover without the other. Layer2 is getting better and better, and there is a lot of work going on here, such as introducing data compression into optimistic rollup to make it 1.5-2 times cheaper than before. If data can be fully compressed and applied, optimistic rollups will become as cheap as today's zK rollup (that is, ten times cheaper).

UpOnly: If people can trade with a transaction fee of 5 cents a few years later, then usually everyone will only trade on Layer 2, and Layer 1 will be more like a layer that enables various rollups to interact with each other.

BUTA: Yes.

UpOnly: How do you think the zkEVM is progressing? Can you give some examples of its applications?

Vitalik: I think zkEVM is progressing very well. People are looking forward to seeing its prototype this year, but there are obviously some challenges in optimization and security audits, but I think it is progressing very well. Applying zkEVM in layer 1 means that we can use zkSNARK to prove that the execution of Ethereum blocks is correct, which means that instead of every node in the network having to process every block, we can see a world where only one node needs to do all the computing power, and everyone else only needs to verify this node, so this can make operating a node more time-saving and cost-effective.

Applying zkEVM in layer2 means a fully EVM-compatible zk RollUPs - which means it will fully support EVM with no/very little modification to improve validity, which will make gas fees lower because hash functions are more difficult to prove in zk.

For users, I think zk rollups are better than optimistic rollups in two ways:

First, in optimistic rollup you have a 1-week waiting period to withdraw your assets, while in zk rollups there is no such waiting period. Because optimistic rollup relies on fraud proofs, it will trust the people who submit blocks by default, and if a block is wrong, then someone will challenge them for a period of time. In zk rollup, when you submit a block, you submit a block with proof. So if you build an invalid block, it will not be accepted at the beginning.

Second, zk rollup has lower security risks. Assuming an optimistic rollup needs to process 10,000 transactions per second, only 5 people are capable of participating in the operation of the node. What if an attacker submits a fake transaction record and knocks down all five nodes? But zk rollup does not allow this to happen at all.

UpOnly: Another question is about security. Now that many institutional investors have entered the DeFi field, do you think there are too many risks and interdependencies at present, and a small vulnerability will cause the entire system to collapse? Do we need to solve the way smart contracts work together, because something buried 5 layers deep may eventually become a trigger point for losing tens of billions of dollars.

Vitalik: That's a great question, and that's why I really want to simplify these protocols as much as possible. When I talk to the team about how PoS or sharding will work, I think about simplifying the code line by line as much as possible. There are also a lot of simplifications that happen because there are a lot of things that can be completely copied, such as Optimistic and Arbitrium are EVM chains, and they use the same code as the Ethereum-based layer.

So you know there's the same stuff in layer one, there's the same stuff in layer two - a lot of the same cryptography is reused in a lot of different places, so there's a lot of building blocks that can be used simultaneously in four or five different layers, which makes a lot of sense.

UpOnly: I was wondering if you think there’s a chance that something like a web standard could emerge that could be used to secure assets on-chain in the long term?

Vitalik: Yes, I think standards for these kinds of things will continue to happen, and over time, all decentralized things will have to upgrade to Layer 2. I recently tried to upload my blog to Mirror, and it cost me about $15 in transaction fees. I look forward to the day when ENS will support Layer 2, so that my transaction fees may be reduced to $2, then maybe 20 cents, and finally 3 cents.

UpOnly: What are the risks when you bring true privacy to people, and what disputes do you think will arise in the future over this issue?

Vitalik: I think it is an important challenge to strive for more privacy. Now many of us underestimate the risks of not having privacy. Just like everything we have in the future will become more dense, they will become like the Twitter of your bank account. We can see how much money someone sent to another person. If we narrow the scope, we will wonder why this person gave so much money to another person and what his purpose was. This can easily become dystopian .

UpOnly: From an investment perspective, what industries (non-crypto) would you put your assets into?

Vitalik: I would choose biotechnology. I think it will develop rapidly in the next 70 years, just like the rapid development of computers in the past 70 years.

UpOnly: Can you give our audience some life advice?

Vitalik: My answer is that you can try to become a better person every day than you were yesterday, for example, you can become friendlier, learn more knowledge, such as starting to learn Spanish, mathematics or cryptography, etc. You can even exercise more, I am now working hard to run 20km.