Crypto KOL Dialogue with Vitalik: Future Development of Ethereum and Personal Plans

Source: UpOnly

Compilation: Dong Yiming, Chain Catcher

Recently, the crypto video podcast UpOnly invited Ethereum founder Vitalik for a conversation, hosted by well-known crypto industry KOL Cobie and Ledger. They discussed the progress of zkEVM, optimization of crypto wallets, the prospects of NFTs, privacy challenges, and more. Below is the compilation by Chain Catcher of this episode, with some parts omitted:

UpOnly: Looking back, do you think there is anything you regret doing on Ethereum, and if you could do it again, would you take a different approach? You mentioned before that having too many co-founders is one of the issues.

Vitalik: The issue of co-founders is definitely a big deal. A few years later, a VC who had passed on investing in Ethereum told me that one very important reason was that they knew a project with eight co-founders wouldn't work. I think he was right; having eight co-founders is a big problem because they have very different values and different ideas about what makes a good project and what they want to create.

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

There were also some minor technical issues, like we shouldn't have used the Merkle Patricia Tree (Editor’s note: The Merkle Patricia Tree, also known as the Merkle Patricia Trie, is a modified data structure that combines the advantages of both Merkle trees and prefix trees. It is an important data structure used in Ethereum to organize and manage account data and generate transaction set hashes.) and should have used a Binary tree from the start.

I also wondered, what if Ethereum had used a different distribution model from the beginning? A somewhat random example—like airdropping half or two-thirds of the supply to Bitcoin holders. What kind of cryptocurrency would it have become? Would it have become a branch of Bitcoin?

For instance, what would have happened if Ethereum had not had a centralized foundation from the start? Then people could participate in the later decisions of the project by buying in during the presale phase, which might have made Ethereum more reliable and neutral, potentially attracting more people (those originally offended by centralized thinking) to participate?

UpOnly: Do you think you will dedicate your life to building Ethereum? Or will you choose a successor and then do something else, like farming?

Vitalik: I think Ethereum will be an important part of my life for a long time, but I will also continue to do things outside of Ethereum, like trying to write some works now. But I won't force myself to give up working on Ethereum.

UpOnly: We know your parents are also crypto enthusiasts, and they became very excited after learning you were in this industry. They closely follow the industry every day and participate in work within this ecosystem. How does this affect you?

Vitalik: It's actually quite strange. You know, my dad was previously an entrepreneur (founder of a software company), and now he has become a crypto influencer. And my mom has transitioned from researching drugs to studying optimistic rollups. I certainly hope they are doing well, and it makes our family gatherings more interesting in terms of discussion topics.

UpOnly: You once conducted a poll on Twitter asking what currency people would prefer if they woke up in 2035 and found that over 80% of transactions and storage were not using ETH. What currency would you hope it would be?

There were two options: one was to choose from BTC, USD, ADA, and SOL (the result was ADA winning with 42% of the votes), and the other was to choose from TRON, BNB, CNY, and NEO (the result was TRON winning with 51.3%).

What was the grand plan behind this poll? Or was it just some junk content?

Vitalik: I wanted to sense what the community's values are, to see if they sufficiently appreciate the differences between Ethereum and other cryptocurrencies—whether some cryptocurrencies are more evil—they might be more centralized and dystopian than the existing business models; or whether they feel that ultimately cryptocurrencies will merge into one—I think most people believe this will happen.

UpOnly: People like to say that someone is the Ethereum of China or the Ethereum of some other place. Does this annoy you?

Vitalik: No, I don't feel that way. People in the crypto space like to do crazy things and say crazy things; I've gotten used to it.

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

Vitalik: The desire for people to own digital collectibles and digital property has been very strong for a long time, and NFTs have given people that right. It has also attracted more people because NFTs are the next mainstream use case of blockchain technology following cryptocurrencies and DeFi.

I know there are artists in Ethiopia and Latin America using NFTs. It is still far from perfect, but it remains an effective channel for artists from some less affluent countries to be seen globally.

Regarding the future development of NFTs, I want to give a somewhat random example. Nowadays, people award certificates to those who summit Mount Everest, and people can use these certificates to show off their achievements. Similarly, NFTs can serve as certificates, and they can be traded. If ballots could also be traded in the future, then the Dow Jones index might collapse very quickly.

In traditional democratic countries, we have a long history of anonymous voting; these ballots are not only conducted secretly, but you also cannot prove to others how you voted. If it could be proven, then some people might start coercing others to vote, making democracy worse.

UpOnly: What do you think is the biggest research question for Ethereum as a community?

Vitalik: The most important things now are about software development and optimization issues. For example, the working mechanism of PoS, concepts related to sharding and how it works, data availability, sampling, how to execute these things, and ZK SNARK. We know how to use these concepts, but there are still many areas that need optimization to make them more efficient. Additionally, there is MEV.

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

Vitalik: I often remind the public about wallet security issues, especially regarding things like 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 number, you will lose the assets in your crypto wallet, or if your computer is hacked, you might also lose your crypto wallet.

There are many solutions, one of which is multi-signature, where users can create an account with three passwords: one can be stored on a computer, one on a phone, and the third can be held by a friend or an institution. You need 2 out 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 like this: if you have an account, you choose some guardians and create a list of guardians. More than half of the guardians have the ability to recover your account. For example, my cold wallet has six guardians, all of whom are people I trust very much, but they do not know each other.

More than four guardian signatures can allow a transaction to occur. I also wrote an article about social recovery on my blog vitalik.ca, if you're interested, you can check it out. There are still many technical challenges that have not been overcome, making it difficult for Ethereum users to apply, but I am working hard to reduce these technical barriers.

UpOnly: The transaction fees on Ethereum are too high for people with smaller portfolios, which is also a barrier for them to enter Ethereum.

You previously mentioned that in the future, transaction fees on the internet should not exceed 5 cents. Do you consider this a goal for Ethereum? Do you think there is a reliable roadmap to achieve this on a large scale?

Vitalik: I think achieving this scaling goal will require sacrificing decentralization or security, or other rights to some extent. If we completely use cross-chain solutions, for example, having different applications and ecosystems on 100 different chains, if one chain is attacked, the entire ecosystem would be at risk.

But when we create multi-chain applications, one chain can recover without the other. Layer 2 is getting better and better; there is a lot of work being done, such as introducing data compression into optimistic rollups, which can make them 1.5 to 2 times cheaper than before. If data can be fully compressed, optimistic rollups will become as cheap as today's zk rollups (which means ten times cheaper).

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

Vitalik: Yes.

UpOnly: How do you think zkEVM is progressing? Can you give an example of its application?

Vitalik: I think zkEVM is progressing very well. People expect to see its prototype this year, but there are clearly still some challenges in optimization and security audits, but I feel it is progressing well. Applying zkEVM in layer 1 means we can use zkSNARK to prove that the execution of Ethereum blocks is correct, which means not every node in the network has to process every block. We can envision a world where only one node needs to do all the computation, and others just need to verify that node, making it much more time and cost-efficient to operate a node.

Applying zkEVM in layer 2 means a fully EVM-compatible zk Rollup—this means it will fully support EVM without needing modifications or only requiring minimal modifications to improve efficiency, which will lower gas fees because hash functions are harder to prove in zk.

For users, I think zk rollups are better than optimistic rollups for two reasons:

First, in optimistic rollups, you have a one-week waiting period to withdraw your assets, while there is no such waiting period in zk rollups. Because optimistic rollups rely on fraud proofs, they trust the block submitters by default; if a block is incorrect, someone will challenge them within a certain period. In zk rollups, when you submit a block, you submit a block with proof rights. So if you create an invalid block, it won't be accepted from the start.

Second, zk rollups have lower security risks. Suppose an optimistic rollup needs to process 10,000 transactions per second, and only five people are capable of running the nodes. What happens if an attacker submits a fake transaction record and takes down all five nodes? But zk rollups completely prevent this situation from happening.

UpOnly: Another question is about security.

Now many institutional investors have entered the DeFi space. Do you think there are currently too many risks and interdependencies, where a small vulnerability could lead to the collapse of the entire system? Do we need to address how smart contracts cooperate, as something buried five layers deep could ultimately become a trigger point for losses in the hundreds of millions?

Vitalik: That's a great question and one of the reasons I really want to simplify these protocols. When I discuss with the team how PoS or sharding will work, we consider simplifying the lines of code as much as possible. A lot of simplification happens because there are many things that can be completely replicated, like Optimistic and Arbitrum, which are EVM chains that use the same code as the layers based on Ethereum.

So you know there are the same things in layer one and the same things in layer two—many of the same cryptographic techniques are reused in many different places, so it makes sense to have many building blocks that can be used simultaneously across four or five different layers.

UpOnly: I wonder if you think it is possible to have something like network standards that can be used for the long-term protection of assets on the chain?

Vitalik: Yes, I believe that standards for such things will continue to emerge, and over time, everything decentralized must upgrade to Layer 2. Recently, I tried to upload my blog to Mirror, which cost me about $15 in transaction fees. I look forward to the day when ENS supports Layer 2, so my transaction fees might be reduced to $2, then possibly to $0.20, and finally to $0.03.

UpOnly: When you bring real privacy to people, what risks might exist, and do you think there will be disputes over this issue in the future?

Vitalik: I think striving for more privacy is a very important challenge; many of us currently underestimate the risks of lacking privacy. Just like everything we have will become more dense, they will become like your bank account's Twitter. We can see how much money one person sends to another, and if we narrow it down, we might wonder why this person is sending so much money to another person and what their intentions are, which can easily become dystopian.

UpOnly: From an investment perspective, what industry (non-crypto) would you invest your assets in?

Vitalik: I would choose biotechnology; I believe it will develop rapidly over the next 70 years, just like computers have over the past 70 years.

UpOnly: Can you share some life advice with our audience?

Vitalik: My answer is that everyone can try to become a better person than they were yesterday every day. For example, you can be kinder, learn more knowledge, like starting to learn Spanish, math, or cryptography, etc. You can even exercise more; I am currently working hard to be able to run 20 km.