Founder of Ethereum: The next generation of cryptocurrency

The future of Bitcoin is uncertain. Now, many experts are discussing the future of blockchain. There are many startups in the Bitcoin field, but most of them have not found viable applications. What will Bitcoin and blockchain be like in the next 5 years?

CoinTelegraph spoke to Vitalik Buterin, co-founder of Ethereum, who is currently developing Ethereum 2.0.

CoinTelegraph is referred to as C below, and Vitalik Buterin is referred to as V.

C: The most interesting question right now is the next generation of cryptocurrencies. What will be the next evolution of cryptocurrencies after Bitcoin, Litecoin, and Ethereum?

V:

I think there are several important research directions. The most important one is probably scalability. Currently, blockchain can only process 4-20 transactions per second. The main reason for the low processing power is that every node in the network must process every transaction. Therefore, unlike other decentralized systems (such as BitTorrent) where the more nodes, the more powerful they are, blockchain performance is actually weaker, at least the transaction processing capacity is weaker (because as the network expands, the latency increases exponentially, but the processing power of each node does not increase at all). There are two main ways to solve this problem:

1. State channel

2. Sharding: Different nodes process different transactions, so that each transaction only needs to be processed by a small number of nodes.

The second approach is incorporating stronger cryptography. There is already a lot of interest in ring signatures, which offer stronger privacy. The next step will be projects using zero-knowledge proofs (specifically zs-SNARKs), which are even more powerful and can provide almost any level of privacy. It is useful for creating simple currency mixers, but also for other more complex applications such as financial contracts, identity and credit, and multi-signature proxies.

C: What new features does cryptocurrency need to have in order to be successful?

V:

As far as cryptocurrencies are concerned, I think that if a new cryptocurrency wants to be truly successful in the payment field, it needs to provide some monetary attribute advantages that Bitcoin does not have. One way is to create a "stablecoin": create an asset that "absorbs" its fluctuations by allowing other assets with large value fluctuations to generate stable value. Another way is for new cryptocurrencies to develop better "universal gateways": this service allows consumers and merchants to easily pay in different currencies and easily convert currencies when necessary.

I think the future consumer-merchant payment infrastructure for cryptocurrencies will look like this: consumers declare which currencies they are willing to pay with, and merchants declare which currencies they are willing to accept. If there is an intersection between the two, the payment can be completed smoothly. If there is no intersection, the consumer needs to exchange the currency that the merchant is willing to accept at the cheapest price on the decentralized exchange market to complete the payment.

C: Scalability is the main problem of Bitcoin. What do you think about this?

V:

One thing to be clear about is that the scalability problem is not a problem we will face in the future, but a problem we are facing now. If we can solve the scalability problem now, then we can reduce the cost of each blockchain transaction to 1/100 of the current cost, from $0.04 to $0.0004. This will make it very cheap to do other things with blockchain, and developers will start using blockchain as an infrastructure for applications because they are lazy and choose the easiest way. Imagine encrypted email based on blockchain. Such an email application is very easy to develop, and with a highly scalable blockchain, it can be written in just 100 lines of code.

Price volatility is also a major problem with Bitcoin. Ordinary people don’t want to accept a currency that fluctuates wildly in price and spend money that is worth half of what they received.

C: In what fields will the next generation of blockchain be applied?

V:

In the long run, I think blockchain and other decentralized technologies (such as distributed hash tables) can be combined into a decentralized super-operating-system (dOS). In essence, this decentralized super-operating-system will not only be used for high-value applications (such as payments, etc.), but will also provide infrastructure for many network applications that people use every day. You can implement zero-knowledge proof privacy protection, decentralized credit systems, e-commerce, the Internet of Things, and everything on the blockchain of the future.

Original article: http://cointelegraph.com/news/115828/interview-with-vitalik-buterin-about-next-generation-for-cryptocurrencies
By John Frost
Translator: Shao Ping
Reward address: 1EcJ83H7SDCqH3Xs6Yn3PqiLG26ycSEfSw
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/next-generation-cryptocurrency)