Vitalik Buterin: The price of the currency is uncontrollable, not a technical issue.

Ethereum co-founder, 25-year-old Vitalik Buterin can be said to be a pioneer in the field of cryptocurrency. Fortune magazine ranked the "thinner dreamer" in 22nd place in its latest "40 Under 40" ranking (40 of the most influential people under 40).

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In 2014, Buterin received a $100,000 Peter Thiel Scholarship in recognition of his contributions to the development of the Ethereum platform and the digital currency Ethereum (ETH). In addition, he pioneered an open source programming language that allowed development. Create a decentralized blockchain application (DApp).

Born in Moscow, the researcher, programmer and writer who grew up in Toronto currently estimates net assets between $50 million and $150 million, most of which are Ethereum.

Today, he accepted an interview with the media the Star:

Does the blockchain industry need to better explain risks and potential public benefits?

Vitalik Buterin: One big thing to understand is that the blockchain was just bitcoin five years ago, but it is now far beyond Bitcoin. It is divided into different spaces and has many different visions.

The idea of ​​Bitcoin is to run a decentralized cryptocurrency on the blockchain, independent of the state of the enterprise and the state, which will not depreciate and will not be confiscated. Blockchain is just a tool that makes certain things possible.

For Ethereum, we are concerned with the blockchain technology behind Bitcoin, which makes it possible to decentralize cryptocurrencies and use them in a wider range of scenarios to achieve decentralization of other things. What do you mean by "other things"?

Vitalik Buterin: In addition to currency, the first example of decentralization in Ethereum was the DMS, the decentralized domain name system—similar to the decentralized URL (URL) phone book.

OpenCerts is another example. The project collects records of university degrees and other certificates and keeps them on the Ethereum blockchain, so if you want to verify the certificate, you can check for its existence and its validity through the blockchain.

The third example is the DAO (Decentralized Autonomous Organization, a form of smart contract that writes the rules of the decentralized organization into code). That is, the operational logic of different organizational applications is performed by relatively complex computer programs.

Another important area is corporate monitoring. We can use special-purpose blockchain versions — sometimes called private blockchains — that are 'semi-decentralized'. A small industry alliance may be formed that allows different companies in the same industry to collaborate and interact in a more open competitive environment.

But that doesn't mean we have to change everything, not so radical, but a step-by-step process that makes it easier for institutions to get involved. Is this the easiest way?

Vitalik Buterin: Subject to availability. Historically, these two paths (both public and private) have had success. I often talk to businesses and governments, and organizations are increasingly keen to choose a public chain.

Which companies have you talked to?

Vitalik Buterin: Microsoft is one of them, and there are banks. I don't know much about the Canadian banking industry's exploration of the blockchain, but I know that Royal Bank of Canada has always been interested in this technology.

What role should the government play in this field? Is there room for supervision?

Vitalik Buterin: The government does play a role, one of which is regulation. The most common concern is cryptocurrency trading – the basic model is to raise money for new projects by selling tokens directly on the blockchain. The point of contention is whether the ICO should be classified as a security in law.

In other words, regulators are working hard to solve this problem.

Vitalik Buterin: The regulator is definitely working hard. They are hesitant in many ways. On the other hand, the government is also a user of this technology. Central banks have been exploring the issue of digital currencies and recording government information on blockchains.

What hinders the popularity of cryptocurrencies?

Vitalik Buterin: Scalability is the main bottleneck because the Ethereum blockchain is almost full. As the number of participants increases, the blockchain (space) will not only become fuller, but we will also compete because of the trading space. Transaction costs are inherently high, but may increase exponentially as the number of participants increases. We can't stop people from participating, so scalability improvements can improve this to a large extent.

How to improve scalability?

Vitalik Buterin: The main problem with the current blockchain is that every computer has to verify every transaction. If we can make each computer on the network only verify a small number of transactions, then we can improve performance.

Can this be done without sacrificing security?

Vitalik Buterin: There will be sacrifices, but within reasonable limits.

Can scalability reduce costs after optimization?

Vitalik Buterin: Can significantly reduce costs – the cost per transaction is reduced by a factor of 100.

Does this mean that cryptocurrencies can be mainstreamed?

Vitalik Buterin: Scalability is not the only problem. The challenges of ease of use, security, and privacy are currently being optimized. From a technical point of view, it is also improving, but even if there is technology, how do you turn it into something people will use?

Is the risk of the cryptocurrency reduced?

Vitalik Buterin: A lot of work has been done in this area. The cryptocurrency wallet app is no longer controlled by just a bunch of computer keys – so the risk is too great – there are already some smart programs that use multiple keys through more complex mechanisms, so that hackers want to Invading your account requires breaking through multiple information at the same time. Others worry that the cryptocurrency price is zero, but this is not a technical issue. I believe that people will regain their confidence as time goes by.

The main reason many people are afraid of the blockchain is the online currency. They think that if the price rises less, the field will definitely be better. But this is not something we can control.

What's important is that we can indeed use and benefit from the blockchain without taking risks. For example, if you use a blockchain for authentication, you only need to pay enough cryptocurrency to pay for the transaction—about a few dollars.