Cryptocurrency markets left behind a very active year. Both Bitcoin and other cryptocurrencies have broken record after record in the past year. Some cryptocurrencies, on the other hand, made a loss upon loss. Now, Vitalik Buterin, one of the most important names in the industry, has explained his views on cryptocurrencies one by one.
Vitalik Buterin is one of the co-founders of Ethereum, the second cryptocurrency with the largest market cap. That’s why his statements were also very important. If you wish, without further ado, let’s take a look at the statements made by the Ethereum founder on Twitter one by one.
Here is the “tweet-storm” of the Ethereum founder, in his own words:
Happy new year everyone… Today I’m thinking of doing a little tweet-storm about what I think about some of the topics I’ve written over the last 10 years.
In an article I wrote in 2013, I explained how Bitcoin can help Iranians and Argentines. The point here was that Bitcoin should be censorship resistant and benefit internationally. It wasn’t the supply of 21 million. In addition, I said that I think stablecoins will also develop. Last week, I went to Argentina and saw that what I said that day was true. Cryptocurrency adoption is high in the country, but stablecoin adoption is also really high. Many businesses work with USDT. Of course, if the US dollar signals further deterioration, then things could change. In another article I wrote, I mentioned the consequences of Bitcoin services being more regulated day by day. The main argument here was that Bitcoin resisted censorship technologically, not intelligently, regardless of what legal category it fell into.
My views today are as follows: Bitcoin’s decentralization will ensure its survival even in a very hostile regulatory environment against it. However, it cannot thrive in this environment. Successful censorship resistance requires a combination of technological robustness and public legitimacy. To be honest, my PoS and sharding estimates for 2015 were inaccurate and ridiculous. So what was my main mistake here? I think I’ve overestimated the complexity of software development, the difference between a PoC and a proper production practice with 2014-era ideas. For example, 12-dimensional hyper-cubes…
Today, the Ethereum research team places much more emphasis on simplicity, both in terms of the simplicity of the final version and the way to get there. Pragmatic compromises deserve greater appreciation. This was the idea of 2017, although I still stand 100% behind my comment that “Internet money should not cost more than 5 cents per transaction”. Our current goal is to come here. That’s why we’re still working hard on scalability. I can say that we continued on our way without any negativity in the issue of ‘Sharding’.
- Blockchain 1.0: Every node downloads everything and there is consensus too.
- BitTorrent: Each node only downloads a few things, but there is no consensus.
- Ideal: BitTorrent-like efficiency but blockchain-like consensus…
I was someone who apologized for the energy wastage of proof of work in 2012. Fortunately, however, I became optimistic about the proof-of-stake in 2013. I believed this was a good alternative. This actually reflects a broader intellectual evolution I have:
From ‘X is what I have to defend, so whatever suits X must be true’ to ‘I love X but X has flaws and Y corrects them so I now support X+Y’
Before altcoins were this good, I loved them. In two articles I wrote in 2013, 2 months before Ethereum, I stated the following;
- Different chains lead to different destinations.
- It costs little to have so many chains.
- A solution should be created against the main team being composed of wrong people.
Do you agree with these? Most of the above arguments are much less defensible today… Because chains are more universal, implementations are more complex, which makes bridging more risky, and experiments are much more doable in layer 2… But I still think some things cannot be done in layers 2. So there is still room for different Tier 1 projects.
I was much more optimistic about Bitcoin Cash. I would agree with the argument that large blocks are more important than small ones in the war on scaling. Today, however, I can count BCH more as a failure. My main idea here is that communities built around a rebellion go through difficult times in the long run. Because they put courage above a competency. Instead of going the smarter route, they rally around the resistance.
In 2016 and 17, I encouraged someone to build Uniswap. Frankly, I’m proud of my posts. Even though I said “Do something really simple and stupid” here, I couldn’t do the same thing about PoS and Sharding. This took too long.
Applications envisioned in the Ethereum whitepaper:
- ERC-20 style tokens
- Algorithmic stablecoins
- Domain name systems (like ENS)
- Decentralized file storage and computing
- DAOs
- Wallets with withdrawal limit
- Oracles
- Forecast markets
I wrote a detailed article about stable coins in 2014. For most of this post, I addressed the question of whether you could have a stablecoin without an oracle by using blockchain data (e.g. the PoW differential) to fake price predictions. I’m more pessimistic about this right now because of the PoS shift. We need new oracles. And if we want to keep stable coins intact against the collapse of the US dollar, we need more active governance.
Results:
- My ideas about politics and large-scale human organization were more naive back then. I focused too much on simple and complete formal models and did not anticipate the difficulties of culture. But now I do.
- I had good instincts to escape the craziest points of bitcoin maximism. And although I made a few minor mistakes, I quickly got over them.
- The fact that X makes mistakes does not mean that the rebellion against X will go well. This is one of the difficulties of politics.
- In technology, I was more often right about abstract ideas than about production software development. Over time I had to learn to understand the latter.
- I am now realizing that we need more simplicity than in the past.
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