Vitalik Buterin - What Excites Me About the Next Decade - TOKEN2049 Singapore 2024

a lot of the time when people talk about some of the challenges with crypto one of the answers that people tend to give is people tend to say you know this is still early days right we're still building we're still building out the basic infrastructure you know look how long something like the internet uh took to came into fruition right and this is something that I think people have been saying since uh like basically almost since Bitcoin itself launched and one of the challenges with saying this of course is that today you know we are

not in early days anymore right Bitcoin has existed for 15 years ethereum as a project has existed for more than 10 years and uh you know we see things like Chad GPT rising up from not even existing as companies to suddenly completely changing everyone's understanding of what intelligence even is and so you have to ask the question of like well how do we actually even think about this right are we actually early and the way that I answer this question is I think we are not early to crypto but we are early to crypto actually

being usable so let me explain what I mean with uh by going a little bit into history so who here remembers back in 2013 when we were all excited about Bitcoin and uh Bitcoin was the the next big thing Bitcoin was the next big revolution for payments and people were making these really amazing and really Earnest efforts to try to just get regular Merchants all around the world to start accepting Bitcoin who here remembers room 77 in Berlin anyone here eight there yeah so the one on the right this is Boston it's a restaurant called

thonus monkfish that's actually the first Bitcoin restaurant that I want to so back in 2013 you could be a proud Bitcoin accepted here restaurant and also be a a proud LGBT Friendly restaurant at the same time and um you know crypto Twitter would not think that there is any contradiction uh so back at the time there was like real genuine excitement about this so what happened well one way to answer this is uh we can look a little bit further and uh the memory that comes to me is this to Argentina that I made in

2021 so this was my first time in Argentina and the first thing that I noticed was that there was this population Countrywide that was not just incredibly excited about crypto but that was actively using it on a massive scale like literally yeah I was walking around on Christmas Day and the first coffee shop that I noticed was open I walked in the owner knew who I was and the owner let me pay an e for the coffee and some dessert that I had with my friends now they were using crypto but they were not using

decentralized technology what they what were they using it turns out the Argentinian locals were all using binance to binance transfers why binance to binance transfers are instant and binance to binance transfers are free and this is ultimately the same problem that I think ended up killing at least the original wave of exploration into getting everyone to adopt Bitcoin as a currency it was the fees if you remember the marketing at the very beginning why Bitcoin is great it talks a lot about how Western Union PayPal credit card companies they all just horribly gou you on

fees they charge like incredibly High fees like they're awful right but then Bitcoin itself the fees went up to $50 um ethereum all the fees went up to the highest ever fee that I paid on uh ether was uh actually for a privacy preserving transaction so admittedly the gas went went up and uh you know basically like big parts of Twitter comment every time I do things so privacy protocols have a really good product Market fit and so the transaction feels about $800 so basically the reason why a lot of this stuff failed is fees

what's new in 20124 well this is a chart of fees on ethereum lawyer 2s they have gone down from being somewhere between 10 and 50 cents to being under 1 cent basically zero at the same time optimism and arbitrum two major ethereum Lear ones have hit this important security Milestone that's called stage one and multiple ZK uh R evm rollups have also told me that they plan to head stage one very soon so rollups are rapidly becoming safer and rollups actually are finally affordable but this is not the only thing that's improved one of the

other annoyances that I distinctly remember suffering on my trip to Argentina was uh I tried paying one of these people in eth on layer one the transaction fee was about $4 and the transaction took about 5 minutes to confirm now this was after EAP 1559 had come on chain but this particular wallet it had not actually upgraded to AP1 1559 yet so on bitcoin blocks come every 10 minutes and so you have to wait 10 minutes potentially an hour for transactions to confirm ethereum theoretically the block time is 13 seconds but because of the way

that the gas market used to be really inefficient sometimes you'd have to wait a totally random amount if you get unlucky 5 minutes maybe even longer for a transaction to get included ep1 559 actually basically fixed this and if you add on the merge the one of the things that the merge did is it also cut in half the average waiting time until the next block and so with both of those those things actually these days I reliably have my own transactions confirmed in 5 to 15 seconds then if you use layer twos that have

fast pre-confirmation often this gets down to 1 second and so basically the two big problems that are this the biggest things that made centralized ux much better than decentralized ux in 2021 today decentralized ux has them too but also we can look at the general us experience quality of applications so on the left here you have ether tweet from 2015 and you know it looked it clearly looks like a hackathon demo now on the right here you can look at Firefly which is a client for forecaster and Twitter and lens and if you look at

the quality of the UI like this looks like a web 2 level of quality but it it's a decentralized application under the hood but also this year we saw progress in a account abstract we saw more and more people using safe we saw ZK email E 7702 we're starting to see mainstreaming in ZK sarks all kinds of different applications so we have new and better privacy protocols Railway Oxo uh zoo zoo pass which we'll talk about a bit later raro which can prove that in zero knowledge that you have a passport and then you could

do voting on top of that also even existing ease of use improvements between ler 2s two years ago everyone was complaining about having to manually switch networks today I think like for a at least the last year I actually haven't yet manually had to switch networks so before the limitations of the technology were a stopping Factor like I even remember that moment where crypto kitties looked like it might become this really big breakout app but then what happened crypto Kitty own success pushed the ethereum gas price all the way up to 50 gay ethereum became

basically unusable and that by itself put a ceiling on the grow this is noer true but this basically means that the reasons not to use crypto are noer here what about the reasons to come in the first place one of the uh mistakes that I think people sometimes make is uh talking about crypto as being an efficiency technology this is something that a lot of people talked about even back in 10 years ago so this is a a random page from 2013 that was just listing the benefits of accepting Bitcoin right so P Made Easy

um security and control over your money zero or L Fe or low fees protect your identity right so two of the four are I think things are feat that are features that are very unique to crypto the other two well they were unique to crypto then but are they now right today we have venmo we have a much better sea payments there's WeChat pay the centralized systems keep getting better and better but yet in some places payments and access to finance remain durably difficult why do they remain difficult it's not because of access to technology

it's uh basically because of limit limitations in global politics so I think it's important to remember right that the kinds of benefits that crypto brings to the world they don't have to do with technological improvements of the same type as switching from a regular jet to a supersonic jet is a techological Improvement it's a type of Technology what kind of typ so one way to look at this is uh this blog post that Josh Stark from the ethereum foundation wrote about two years ago and the title here is atoms institutions and blockchains and the thesis

is that blockchains allow us to to create a kind of digital hardness any kind of social hardness basically that lets us create persistent digital structures that are hard that and that can resist being broken in the same way that you can make hard physical structur out of something like concrete and if you think about how how blockchains from some of the previous Cipher pug technologies that they came from things like mixnet things like tour things like bit torrent the thing that you realize is that blockchains are all about creating persistent structures that are extremely robust

right so a file sharing Network well if a if your file share Network blows up that's fine you just switch to a different one and after a week everyone forgets if a blockchain blows up and you switch to a different one everyone loses all of their money this is a fundal difference between what technologies before blockchains did and what blockchains do and so blockchains because of this enable the internet to not just Route Around weaknesses in Old World structures but also do an actually better job of uh building better Alternatives that can solve similar kinds

of problems so blockchains are digital concrete and digital concrete digital concrete for building digital Castles in the Sky so who here has uh seen this uh this movie a la Castle in the Sky raise your hand if you've seen it raise your hand if you know the opening theme song okay let's do a sing along [Music] [Music] so this is uh one of the actually so the reason why this movie is fun is I mean first of all I actually think it's like great and I think like studio gibl is absolutely top tier and you

could probably tell I've seeing this like five times at least but um it turns out that it was like also somehow accidentally the inspiration for ethereum without us even me even realizing it basically what happened was in 2013 I was browsing a Wikipedia list of fictional elements right and I Came Upon ethereum in that list and in the list I saw okay this looks like a really nice name right and you know it reminds me of this 19th century scientific theory this idea that there's this medium that permeates everything and so okay fine I picked

the name then two months later one of the ethereum foundation designers back before it was even called the ethereum foundation uh decided to use this diamond as the ethereum logo I thought okay this is a really cool diamond it's I like the logo it's beautiful years later I watched this movie for the first time and then I saw wait they have etherum cryst eum crysts look diamonds and so it turns that a of eum like art was uh inspired by this without even realizing it so and the other thing about that like that song right

is that the song like it actually sounds nice right like I think in crypto you know we actually need better songs right it's like you know a lot of the time if you ask someone to like come up with an Anthem for a project like they come up with something that's totally cringe right it's like decentralized We Stand United a hash confirmed a new block invited like okay you know if you like rap then that's good right but uh do you really want that to be your Anthem forever right okay so I mean you know

back in 2013 right there was this other song that I remember there there it was uh there was this artist named krya it's Q said and done all your Fe inflate be on the Sun but no more because now there's a better one and its properties perform better than all the rest of them it's mathematical no more double spend it's encrypt put your cash in your brain or it's wearable a new form of wealth begins wait who here actually remembers that one okay I do uh so see it like digital Castles in the Sky I

think are the unifying theme that combines the serious and the fun aspects of crypto together this is what I want people to remember a castle is something that can protect you and keep your family and keep your tribe safe a castle can also be a castle in Disneyland that lets your community have fun a castle can also be a museum that preserves all of the entire thousand year history of your culture and a digital Castle similarly can be all of these things and dig and digital castles of all types are something that we can build

on on top of ethereum so done with digital castles um what should our key goal be so this is I know my view that I've said the whole time right we need to satisfy the needs of mainstream adoption and we need to hold on to open source and decentralization values at the same time what does this mean so example one W it's right there's two to hold your m one of those you Bally you know you do like the crazy self- sovereignty maximalist thing you write down a seed phrase you do everything offline you take

your seed phrase you engrave it on a piece of titanium you put your titanium inside of a lock box that's made out of even more titanium and then you like put that lock box 10 me undergound and then your coins are safe right so that's one approach the other approach is to say bro I'm like a normie I'm not going to do all that and so instead you basically go and you take your coins and you go off to give them to some trustworthy guy you know there's this nice guy his name is Sam he

goes on panels with Bill Clinton he's got to be trustworthy and uh you know two years later it uh you know it turns out that your assessment of who's trustworthy and who's not was a little bit wrong so I think these are not the only two Alternatives right so basically if you want to be protected against centralized Bad actors then you do the traditional self- custody thing and if you really want you can put it in titanium and put it 10 met underground if you want to be protected from your own mistakes you do a

centralized exchange what if you want both this is what smart wallets with multisig let you do multisig means you have multiple keys so you might have for example six keys out of which you need four to send a transaction and you could even have a rule that for small transactions you only need one and and those keys can be any combination of keys that you can contr um friends and family ZK rappers of existing services so you could even make a yaik rapper of an email you can literally today make an ethereum account which is

a smart contract wallet from which you can only send transactions if you generate a proof that you canoll a particular email address right so you can basically take web 2 uh trust anchors and you can like pull them into the web 3 world and in the web 3 world you can even diversify your trust right so you can ZK w a Gmail account which is a US company then you could combine that to make another one of your Guardians be a ZK rapper of uh you know like an Indian government ID and then you make

a third key be a hardware wall wallet that was made by a company in China right like you can maximally diversify everything and so even you you can actually get the benefits of institutional trust without a lot of the weaknesses so example 1.5 decentralized social media ux forecaster is a user experience wise warcast as a web2 quality app but you can set your recovery address the thing that has ultimate control over your account to be your multisig and I personally trust my multisig way more than any one of my centralized accounts example two payments so

this is a doo it's a wallet that is meant to be entirely ethereum based but it has the same ux quality as venmo example three privacy pools privacy pools uses a mechanism where users can prove that their Depo their withdrawal came from some deposit without revealing which one but revealing that their deposit did not come from one of the bad guys and so this is a way that allows you to have a very high degree of privacy for regular users and meet a lot of uh important compliance needs but without actually having back doors example

four ZK social media this is a zoo pole which uses zo pass and so can prove that you're a human prove that you're a member of a community solve proof of personhood problems solve reputation problems while still preserving your privacy it's not about either you're an Anon or no and nobody trusts you or you're KY didn't verify that you have no privacy it's like no you can have privacy and you can have trust at the same time example five ethereum layer one a lot of techological improvements that are happening that make the layer one both

more performant in terms of red ring finality time increasing capacity and at the same time more decentralized and easy to verify and a lot of these things are already happening right so this like these are all directions that the ethereum ecosystem and I think crypto in general are going to be going over the next 10 years right we uh basically the two wrong paths are one is to sacrifice practicality for decentralization and forever being an ecosystem that's just appealing to itself and only has 691 users the other bad path is to sacrifice decentralization for practicality

and to say okay well we're trying to get Mass adoption and so guess what the next great crypto application you have to log into it with a freaking Gmail account right what what do we do best well no you know we do not have to take either of these dark choices we have decentralization and we have practicality at the same time eat both pills be purple take both thank thank you