The cryptocurrency industry listens intently when Vitalik Buterin, the co-founder of Ethereum, speaks. Recently, at Nanyang Technological University, Buterin delved deep into the evolution and challenges of Ethereum, offering a compelling narrative about the platform’s past, present, and future.
According to Vitalik Buterin, while Ethereum has made significant technical strides since its inception, many challenges it grapples with today mirror those from its early days. He pointed out that the four cardinal concerns – privacy, consensus, smart contract security, and scalability – remain persistent obstacles.
Biggest Problems Facing Ethereum Remain the Same
“Interestingly, one of the things about the progress of Ethereum technology is that we are talking about things today that are very similar to things we were talking about six years ago… If you ask me or anyone else what the biggest problems facing Ethereum are, you’ll get basically the same answers,” said Buterin.
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Reflecting on privacy advancements, Buterin highlighted the journey from 2017, when Ethereum aimed to integrate the zk-SNARKs (zero-knowledge proofs) technology, to 2023, where the ecosystem boasts advanced zk-SNARKs libraries and tools like StarK and ZK Rollup.
Basic description of ZK proofs. Source: CoinLoan
However, privacy enhancement brings with it challenges, especially related to legality.
There is a gray area concerning privacy coins, exemplified by Tornado Cash’s use by hackers, which led to the introduction of the “proof of innocence” concept. This principle allows users to assert that their tokens didn’t originate from malicious activities without divulging their source.
“These are some of the biggest changes we’ve seen in the past 10 years. It’s been a long, slow journey from an initial concept to a process of gradually solving various challenges in practical use,” Buterin added.
Consensus Created Challenges
On the consensus front, Ethereum’s evolution from researching consensus mechanisms in 2017 to the complete transition by 2023 is noteworthy. But, like the other areas, it is not devoid of challenges, with protocol complexity and centralization being major concerns.
Smart contract security has seen significant enhancement, especially after the DAO hacking incident of 2016, which exposed vulnerabilities in Ethereum’s protocol. By 2023, hacking frequency has reduced, thanks to more secure programming languages and protocols.
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“In terms of smart contract security, solving smart contract security issues may be the slowest progress among the four problems, because in 2017, only one year passed after the DAO hacking incident,” Buterin affirmed.
Another feather in Ethereum’s cap is the smooth transition from proof-of-work to proof-of-stake, dubbed the Merge, which has augmented network security.
Buterin also touched upon the evolution of sharding from its conceptual phase in 2017 to the present. The ecosystem has seen an inclination towards Rollup solutions, such as ZK-Rollup and Optimistic Rollup. There’s a concerted push towards decentralizing these systems and enhancing their security.
A resonating sentiment from Buterin was Ethereum’s real-world impact. His anecdote about using Ethereum to pay for coffee in Argentina using the Polygon network was heartening, underscoring Ethereum’s increasing global adoption.
However, he voiced concerns over true decentralization being accessible to everyday users like the coffee shop owner.
Buterin accentuated the importance of real adoption and usage of Ethereum. While technical challenges persist, the overarching mission is to make Ethereum’s benefits tangible to its vast user base.
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