February 22, 2022 / Interesting

Vitalik Buterin Takes On The Future of Ethereum

ethereum 2.0

The developers of the TOP-2 cryptocurrency Ethereum abandoned the concept of Ethereum 2.0 at the end of January this year. Now it is correct to use the concept of “Consensus Layer”.

Today we are analyzing a new interview with Buterin, in which he spoke about the readiness and time for the transition to Ethereum 2.0 (Consensus Layer). Vitalik also plucked up courage and told why Ethereum is better than Bitcoin, about future WEB 3.0 and NFT.

ETH 2.0

If we talk about POS algorithm, we already even have a network where you can stake Ethereum and the capacity of this network is already almost 9,500,000 ETH.

This is the so-called zero layer, which successfully works over last year, but what’s next? When will we see a real transition to Proof-of-Stake and we can forget about dozens of dollars in commissions?

According to Vitalik Buterin, at the moment they have made great progress in various issues to complete the transition to the new algorithm.

There is not only code, but also a lot of test data, as far as the future merge is concerned. The emphasis is on how the synchronization of clients will take place in both existing layers of Ethereum. If we talk about which part is still the least developed, then we are talking about the initial level of synchronization, when the current Proof-of-Work network begins to interact with the Proof-of-Stake network. But the process is underway, there is also the first test data and there will be more and more of them.

As Vitalik says, there is still a lot of work to be done, but many team members rate the current result very well and call the deadlines for its completion. It can be either June or July or August. That is, Buterin believes that the process of merging the two Ethereum networks can be launched as early as this summer. After this happens, Ethereum will become “mainstream” – these are the words of Vitalik himself. Although he does not exclude that there may be various delays, the merger process will begin during 2022.

Here we have to make one remark, that earlier Vitalik talked about when the people who added Ethereum to staking today will be able to take it back. After the current Proof-of-Work network and the new Proof-of-Stake network are merged, everyone who stakes today will not be able to take coins. This will require at least two more hard forks. That is, it can be another 6 to 12 months from the date of transition to the POS algorithm. In general, if you are a long-term hodler of the TOP-2 cryptocurrency, this is a completely unimportant time period for you and you can go into staking even now and hold the asset for the next two, three or more years. But if the issue of the ability to withdraw funds from within the next 12 months is important for you, then most likely this function will appear no earlier than the end of this year, and maybe much later.

However, Buterin believes that when their work is done, Ethereum will go mainstream and surpass Bitcoin.

BTC

In Vitalik’s understanding, 30% of the world will work on Ethereum in the future. This will be possible thanks to Proof-of-Stake, which, according to Buterin, provides much more security than Proof-of-Work, which is also proof of work.

This is actually an extremely bold statement, for which Bitcoin maximalists can subject Buterin to a lot of criticism. And specifically in this dispute, although we personally do not consider ourselves to be maximalists, we believe that Vitalik is mistaken. We understand why he praises Proof-of-Stake – because without this transition it is impossible to realize his idea when the whole world will work on Ethereum. But what he says about how Ethereum will give more security and decentralization than bitcoin, we do not agree with this.

But Buterin’s interview, not ours, so let’s listen to his arguments. He gave a rather difficult to understand analogy with real estate, the city, the law and lawyers, who can only follow a limited set of rules.

If everything is simplified, then in Vitalik’s understanding, Bitcoin functionality are too limited by its strict rules, and in order to create something more functional, one cannot simply apply an add-on over the main blockchain in the form of a sidechain or a second layer.

Because the possibilities of this second layer will also be limited by the first. And due to the fact that smart contracts on Ethereum already today have more functionality than what contracts on Bitcoin offer, in the future, applications based on it will be able to give users much more opportunities.

In this case, Buterin is right, Bitcoin also has its own smart contracts, but for security reasons, their functionality was significantly limited. In contrast, Ethereum smart contracts are Turing complete. They can be implemented almost anything, if, of course, you can write the necessary code.

WEB 3.0

A lot of cool projects have already been launched on the basis of Ethereum. But here are the directions Buterin singles out.

The first is projects that perform the function of transferring value. Paying with cryptocurrencies is getting easier, and stablecoins can protect against volatility. Especially if you use algorithmic stablecoins.

The second direction is DAO. There are already successful examples of them today, such a company is managed by the community and can do useful things, for example, engage in scientific research.

In third place are prediction markets. Vitalik notes that this may become an important tool in the future, which will not only allow everyone, without exception, to express their opinion, giving their own forecasts. But it will be useful in the sense that an open prediction market will make it easier to analyze large amounts of information, consisting of different points of view, and thus everyone will be able to better understand the current situation.

The fourth promising project is services with DNS names. They greatly simplify the processing of payments and the transfer of information. When you do not need to remember and indicate a complex wallet address, but simply write the user’s domain name and send him a cryptocurrency or a message.

All these areas, and especially the last one, will become an important component in the future construction of the Internet in the WEB 3.0 format. Buterin also considers the development of NFTs interesting. He sees that there is a lot of hype out there right now and that people are just following greed, doing at least something for the purpose of earning. But many useful things are also done with the help of NFT, such as supporting artists, writers, scientists, and more. In the future, there will simply be more of a bias toward useful applications of NFTs.

Here is an interview from Vitalik Buterin. He did not name any price targets, but if everything he promised is true, then Ethereum will cost $10,000 and it will even be very cheap.

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