Vitalik Buterin on Ethereum's Present and Future, and How to Think About Crypto for Builders
This blog outlines the key takeaways from Vitalik Buterin's July 6, 2024, talk at the University of Waterloo, where he discusses Ethereum's evolution and the opportunities it presents for builders.
In his July 6, 2024 talk at the University of Waterloo, Vitalik Buterin explored Ethereum's present state and future prospects. He discussed the dual nature of the crypto space—money crypto and idealistic crypto—and highlighted technological advancements enabling complex decentralized applications. Vitalik addressed challenges and opportunities for builders and researchers, emphasizing zero knowledge proofs, the evolving crypto landscape, and the importance of strong values and teamwork. Here are the main takeaways from his talk.
The Evolution of Crypto Projects
Vitalik highlighted the transition from building basic infrastructure to developing sophisticated, user-friendly applications. The focus now is on bringing these ideas to the mainstream.
"The last decade was about building basic infrastructure and theory and the next decade is going to be about bringing these ideas to the world."
He discussed the reduction in transaction costs and improvements in user experience, making decentralized platforms more attractive and accessible.
"In 2019, transaction fees were about $5 per transaction... In 2024, on these layer 2 platforms... fees are often less than $0.01…Over the last couple of years, a whole bunch of these important UX problems actually have been solved."
Early Stage vs. Mature Spaces
He explained the difference between early stage and mature spaces, using examples like modern AI and space travel versus web2 social networks and mainstream pharmaceuticals. Vitalik highlighted that the crypto space uniquely embodies both characteristics.
"I think what's interesting about crypto is that it is an early stage space and a mature space at the same time."
There is ongoing early innovation with technologies like zero knowledge proofs, while established platforms like Ethereum provide stable, reliable services. Recognizing this dual nature is crucial for builders and researchers to foster a more holistic approach to development in the crypto industry.
The Dual Nature of Crypto
Vitalik emphasized the need to balance the idealistic and money-driven aspects of crypto for sustainable development. The idealistic side focuses on creating decentralized, transparent systems that empower individuals and promote privacy and security. In contrast, the money-driven side attracts investment and drives adoption through trading, speculation, and revenue-generating financial products.
"My ideal in terms of this kind of idealistic crypto versus money crypto divide is basically to combine both."
Vitalik stressed that integrating these two aspects is crucial for the crypto industry's growth. Embracing this dual nature can help shape a future where technology and economics create positive change together.
The Importance of Zero Knowledge Proofs
Vitalik covered the significance of zero knowledge proofs (ZKPs) in both scaling and privacy, describing them as essential for the future of blockchain technology.
"Zero knowledge proofs are the frontier both of scaling and of privacy... super important technology to get to know."
Vitalik stressed that ZKPs are not just a theoretical concept but a practical tool that is increasingly being integrated into blockchain projects. As the technology continues to evolve, it will enable more secure, efficient, and scalable blockchain applications.
The Role of Community and Governance
He discussed the importance of community and governance in the development and success of decentralized projects. He pointed out that effective governance and community collaboration are critical for maintaining the integrity and functionality of decentralized platforms.
"Better tools for groups of people to organize and collectively manage events, assets, or other things... governance technology is super valuable."
Future Prospects and Challenges
Vitalik predicted that as the crypto industry matures, it will likely see increased integration with traditional financial systems. This integration could bring about greater mainstream acceptance and use of cryptocurrencies and blockchain technology.
"I think in the long term, the crypto industry will continue to evolve and potentially become more integrated with traditional finance... It depends on different factors and the adoption rate in various regions."
Technological advancements, such as improvements in scalability and security, are essential for the growth of the crypto industry. Advancements in zero knowledge proofs and decentralized finance (DeFi) have the potential to revolutionize incumbent industries and create new use cases for blockchain technology.
"The challenge is to create systems that are both decentralized and user-friendly, while also complying with regulatory requirements."
Words of Advice
As words of advice to the audience, Vitalik mentioned the importance of being a jack-of-all-trades and encouraged a focus on building practical skills, especially in the context of rapidly evolving technologies.
"I think being a jack of all trades is better than being a specialist because you have more reference points for whenever the next paradigm comes along."
Vitalik also addressed the challenge of people problems in projects, emphasizing the importance of aligning values and fostering strong relationships.
"The largest problems in any project are people problems... make sure that you and your co-founders are aligned on values."
Closing Remarks and Q&A
The session concluded with a Q&A segment, where Vitalik addressed questions on crypto regulations, finding passion, and the dynamics of token prices. For a deeper dive into these topics and more, watch his full presentation to catch all the insights!