ETHAmsterdam Digest: THIS is what Vitalik thinks about Ethereum Today

On the 22nd of April 2022, ETHGlobal hosted the very first in-person conference that took place in Amsterdam, hence the name ETHAmsterdam. Over 800 blockchain enthusiasts and professionals joined the event, most notably to hear Vitalik Buterin, the founder of Ethereum talk, and the past, present, and future of the project. Since we at CryptoTicker were in the front rows, we’re going to summarize everything that happened during this 1-hour talk. You’re welcome 😉

Ethereum 2.0 is DEFINITELY Happening

Despite the updates being delayed, Vitalik confirms that the Ethereum 2.0 update will be happening. This means that Ethereum will be moving from a proof-of-work consensus to a proof-of-stake consensus. The latter helps in reducing fees, making the blockchain faster and more scalable.

Switching to this new type of consensus might trigger some miners. In fact, their bread and butter come from mining through the POW mechanism. Vitalik took it a step further to calculate the worst-case scenario. This scenario assumes that 51% of the miners stop altogether in protest of the new consensus. Even in this situation, Vitalik said that there are alternatives and the process won’t stop. However, this might create a fork.

Sharding Importance

Vitalik took some time to talk about Sharding. This is a process that minimizes the complexity of final outcomes. It is done by splitting the network into multiple “shards”. Each one would become an independent state, helping in the distribution of data across multiple machines through “horizontal scaling”. Vitalik stressed that this process is still complex, but way better than before.

Ethereum Improvements Protocols (EIP)

Vitalik mentioned how there are many EIPs to be implemented. This includes:

• EIP 1559: this update will reduce fees on the network significantly. Miners will have to switch to the latest software and will begin producing blocks under a new setup fee.
• EIP 1444: this will turn uncomprehensible code into an easy-to-understand text format. Not only will this enhance the user experience, but will also allow users to create, register, share, and use a decentralized collection of translations, enabling richer messaging that is more culturally and linguistically diverse.
• EIP 1337: Recurring transactions in a DeFi space would turn CeFi to its head. This improvement automates repetitive payment for users, and organizes the collection of funds from the service provider side.

ETHAmsterdam – Underrated/Overrated Questions

In this section, Vitalik was asked whether he thought certain topics in the crypto space were overrated or underrated. Here are the main topics he was asked about.

One Token/One Vote Systems – OVERRATED

When the interviewer mentioned the topic “One Coin, One vote”, Vitalik thought “OneCoin”. He directly said “SCAM”, but then later understood the question. He later spoke about the need to enhance governance in any decentralized entity. Those enhancements come after several hostile attacks from outside or even inside DAOs.

Vitalik also spoke about the need to ensure decisions are high quality and spoke about different frameworks in order to ensure good governance voting.

PFP NFTs – OVERRATED

Interestingly enough, Vitalik thinks that PFP NFTs are overrated. Let’s first explain what that means, before going on to why he thought so.

PFP NFTs stands for Profile Picture Non-Fungible Tokens. Those became popular when Twitter officially introduced NFT profile pictures. Users could verify the picture through a simple click on the blockchain address.

Vitalik claimed that those can easily be cloned without any solid infrastructure to catch those fake pictures. There is definitely room for improvement in that area, but for now, Vitalik thinks that they are overrated.

P2E Games – OVERRATED

No one expected that Vitalik finds P2E games overrated. The reason behind his answer was that P2E games have a lot of outflow money (payouts to gamers) but the inflow of money is often questionable. He specifically said that “there are no credible stories behind funding P2E games economically”.

L2 Centralization – UNDERRATED

Vitalik’s answer on this topic comes with 2 big caveats. But to sum up this part, he thinks that layer 2s, even at worst, come with many good returns such as trustworthiness and censorship resistance. On the other hand, the biggest risk in this area is governance, where L2s end up influencing L1s in certain aspects.

Private Keys – UNDERRATED

The last topic was about private keys, which Vitalik thinks are underrated. He pushed the strong narrative of the importance of owning a private wallet. He also went further discussing the next steps in recovering wallets such as social recovery (choosing friends like what Facebook does). Those are definitely big aspects that can be tackled in the future of Ethereum.

The 5 Roadmap Building Blocks of Ethereum

The last part of the talk was basically Vitalik discussing in detail the vision of Ethereum. For him, there are no Ethereum 2.0 and Ethereum 3.0. On the other hand, the development phases breaks down into 5 basic building blocks:

1. The Merge: This phase represents the switch of the consensus mechanism from Proof-of-Work to Proof-of-Stake
2. The Surge: In this step, Vitalik talks about the further development and increase in scaling, L2s and sharding which all result in lower fees.
3. The Verge: This step might sound a bit technical, but fear not! Basically, Vitalik spoke about the Verkle Tree, which is a process that encodes the blockchain. This results in faster and more secure data transmission on the blockchain, and quicker verification & movement of data from one computer node to another.
4. The Purge: With all previous additions to the blockchain done, now comes enhancing the “craft”. This step consists of the different EIPs such as EIP1444, removing unnecessary data, and clearing logs that might cause congestion in the system.
5. The Splurge: This final step consists of all the “cool stuff” that Ethereum is able to do, such as adding verifiable delay functions (VDFs) for extra security, and blocks finalizing immediately for extra speed.

Conclusion

There are a lot of advancements in the Ethereum ecosystem, and many more to come. Vitalik did reminisce back to the old days when very few people used to attend those dev meetings. In this ETHAmsterdam talk, more than 800 people came from all over the world. Vitalik also spoke about how fast the crypto space is evolving in those past years and is certain that the future will hold much more developments.