Much has changed in the blockchain universe since Vitalik Buterin released one of the most influential white papers in the history of the distributed ledger technology. His 2013 Ethereum white paper was the first step in developing the world’s second-largest cryptocurrency by market capitalization. Unlike Bitcoin, the Ethereum protocol was created to support the development of blockchain applications (known as decentralized applications, or Dapps), which has rendered it into the go-to platform for blockchain developers.
One change that Buterin doesn’t often talk about is China’s rise as a global blockchain powerhouse.
On the heels of the annual Ethereum Developers Conference, TechNode interviewed Ethereum co-founder Buterin via e-mail. Supported by the Ethereum Foundation, EDCON is a community-supported event organized by LinkTime, Unitimes, ETHPlanet, and other Ethereum communities.
Buterin spoke about blockchain adoption in China, China’s Blockchain Services Network (BSN), and the early days of Ethereum.
The Ethereum co-founder welcomes Chinese developers, government, and large enterprises to the field, but warns that a preference for consortium blockchains may get in the way of their international ambitions. This type of blockchain centralizes control of the network.
In an international context you cannot assume that there is even a single government that everyone trusts, whereas public blockchains are more easily perceived as being neutral.
VItalik Buterin
Buterin also sees potential in the Chinese government-led “internet of blockchains” BSN, but cautions that it’s far from a done deal. He compared the hype to Facebook’s Libra digital currency, which also made headlines when announced. Only five months later, major partners pulled out from the project, and it has yet to pick up steam.
Blockchain Services Network (BSN)
What: A platform for blockchain development, bringing together cloud services and different chain protocols on city nodes.
Why: To reduce the cost of blockchain application design and deployment while powering communication between chains. It will be made available around the world through local cloud providers, ultimately creating a global internet of blockchains.
Who: It is part of the government’s Global Blockchain Strategy unveiled by Chinese President Xi Jinping in November 2019, spearheaded by the China State Information Center, China Mobile, China Union Pay, and Red Date Technology. For details watch our webinar with BSN’s architects and key partners.
TechNode: Where are you seeing the most blockchain talent, geographically speaking?
Vitalik Buterin: I think it’s widely distributed! At the beginning it was more highly concentrated in Silicon Valley, Berlin, and a few other places, but now there are hubs of blockchain talent all around the world. I see many successful teams in the US, Europe, Australia, and recently more in China as well.
TN: Governments are increasingly involved in blockchain, either through regulation or their own initiatives. Consortium chains are garnering increasing attention and popularity. Do you think that either or both of these moves diminish the potential for decentralization?
VB: My impression is actually that public chains are gaining more support recently, including from large enterprises and even government applications in a few cases. Consortium chains are of course the more safe and conservative option, and much more powerful than public chains in the short term because public chains have scalability issues, but I think public chains will prove themselves to be more safe and scalable with time.
TN: How do you think China’s increased activity in the blockchain world, both by the private and public sectors, will affect the development of the technology in the next decade? What are some pros and cons?
VB: I am definitely happy that so many in China are interested in building blockchain applications. We are in a time when there is great concern about what technologies can be trusted; blockchains cannot solve all problems but there are definitely some things that blockchains can make better by making it easier to build platforms where users control their own data, improving auditability and transparency of algorithms, etc.
One main challenge I see is that so far Chinese large enterprises and government tend to focus mostly on consortium chains, and while I think this will work within China, I also think that many of the most valuable blockchain applications are international ones, and in an international context you cannot assume that there is even a single government that everyone trusts, whereas public blockchains are more easily perceived as being neutral. So I do think that more adoption of public chains is going to be necessary. BSN integrating with public chains is definitely a positive step in this regard.
TN: Ethereum is one of the chains available on China’s BSN, according to Red Date. How was the decision to participate taken, can you describe the reasoning? How do you think you can manage the collaboration/competition relationship given that both projects pertain to smart contracts and Dapps?
VB: That decision was taken by the BSN group, it would be better to ask them for their reasoning! I think they simply want to give developers options and the ability to use high-quality public networks that are widely used, and Ethereum is absolutely at the forefront of that. I don’t see BSN as being a competitor to Ethereum; I see it as being a different layer.
TN: What is your take on the BSN more broadly? What will its impact be?
VB: I think it’s still too early to tell; it remains to be seen exactly what kinds of projects will be built on BSN and how it will evolve. It’s important to not try to guess too much from early initial information about a project when it’s being released; e.g. I think this is one of the mistakes that people made with Libra.
TN: It is said that back in 2013 you proposed creating a scripting language on top of Bitcoin, but that this didn’t go down well. If this is true, what do you think looking back on that interaction now? Is there anything you would have done differently? Do you think that, ultimately, the creation of Ethereum was for the best?
VB: This is a misconception; I did not actually propose to build on bitcoin first. I proposed to build on Primecoin instead of Bitcoin, because at the time the Bitcoin community was already having debates with many people pushing to change the protocol to make it impossible to build second-layer protocols of the type that I wanted to build on top. A big part of the reason why I wanted to build on Primecoin instead of building an independent blockchain was because at the time I expected I would have to write the code myself and I did not see myself capable of writing an independent blockchain from scratch. However, when I published the idea, far more people quickly offered to help, and so I did feel like I had the ability to create Ethereum as a separate blockchain.
TN: You began your career as a journalist at Bitcoin Magazine. Have skills from media helped you in your later career? What is the most common mistake journalists and public speakers make when communicating blockchain with the general public?
VB: Probably the two most important skills that I learned were (i) an understanding of the tech and economics and other properties of bitcoin and cryptocurrency, and (ii) writing skills. I think the biggest mistake made by a lot of educational writing is that there are usually two types of educational writing. First, there is writing that tries to fully explain the idea technically, with the goal of helping people fully understand it and be able to implement it; however, this writing tends to be very academic, very difficult to read, and often written to be read by people who studied the same things in university as the author etc etc. Second, there is writing that targets the general public, but is completely technically inaccurate. I feel like there is a large missing space in between these two extremes, and it’s what I try to target with a lot of my writing.
TN: What was it like to be paid in Bitcoin (BTC) in the early 2010s? What did your family and friends tell you? What were the most important reasons why you got involved with cryptos?
VB: Being paid with BTC for the first time definitely felt like becoming part of a new world. My family and friends were not too interested at first, though I became interested very quickly; I found the combination of math and technology and ideas around open source software, digital communities and freedom very attractive. It took time for other people to find cryptocurrencies interesting as well.
TN: What is the most important roadblock in a blockchain-powered internet, back in the early 2010s and today? How was your thinking about the technology changed? Have you discovered new potential/limits that you didn’t see before?
VB: There are definitely many things that I understand now that I did not understand well back then. One example of this is around decentralized governance. In the early 2010s, I was very interested in DAOs (fully decentralized companies running on the blockchain) and similar ideas, but I understood little about the challenges of actually building them and the economics of governance mechanisms.
Since then I’ve come to understand much more, and I know what the limits are; for example, I have written many articles about how coin-based voting systems are vulnerable to bribing voters, control by very few wealthy actors, and similar problems. Understanding the economics and the limits of oracles has also been another significant advancement since then. [Oracles connect Dapps with the real world, facilitating the execution of smart contracts.] Though at the same time, we have come much further in actually having these systems running on a live network, so I think there has been progress.
TN: Ethereum 2.0 (Eth2.0) is adopting a proof of stake consensus algorithm to improve the network’s scalability and efficiency. But it’s likely that staking pools, much like mining pools, will emerge to dominate the network, increasing centralization. Will Eth2.0 sacrifice some decentralization for scalability? How do you plan to deal with centralization stemming from staking pools?
VB: The Eth2.0 research team takes decentralization very seriously. We have made many protocol changes to try to make the protocol more friendly to individual and small-scale stakers. Staking pools are definitely going to happen, through it is definitely our hope, and our expectation, that there is less centralization in staking than there was in mining.