Vitalik Buterin’s Ethereum HK Speech Achievements, Challenges, and Future of Ethereum

Vitalik Buterin's Ethereum HK Speech Milestones, Obstacles, and the Future of the Platform

ETH HK was held in Hong Kong on October 23rd as scheduled.

As you wander through the different venues of the main conference, hackathon workshops, and project presentations, you don’t seem to feel the depths of the bear market. On the contrary, developers from different countries and regions maintain high enthusiasm and participation in project construction.

And among them, the most anticipated is Vitalik’s online keynote speech.

In his 20-minute speech titled “The Future of Ethereum and its Development Roadmap“, Vitalik mentioned many topics such as new opportunities and challenges for Ethereum, account abstraction, social recovery, scaling, and L2, and expressed his personal thoughts on the current industry development and the future.

• Is the autonomous world not a new paradigm, but rather the GameFi for conservative players who value experience and form?
• Like adding wings to a tiger? Exploring the ‘Intent’ paradigm in the Ethereum ecosystem
• Building zk Layer2 An Inventory of 13 Ecosystem Projects based on Polygon CDK

The TechFlow reporter at Deep Tide summarized Vitalik’s speech content on the spot.

Achievements and Challenges of Ethereum’s Transformation

Vitalik first reviewed some key achievements of Ethereum since the Merge upgrade from PoW to PoS last year:

• The first successful merged hard fork.
• Over 25 million ETH staked in proof of stake.
• Stable operation of Ethereum for over a year without major incidents after the consensus mechanism switch upgrade.

At the same time, Vitalik also directly pointed out the challenges faced by the current PoS consensus mechanism:

• Centralization of staking: Since staking has become an essential element of Ethereum’s daily operation, staking service providers can help users stake, but this inevitably leads to centralization of staking.
• Transaction processing efficiency: To achieve optimal efficiency, the ETH network may want to process no more than approximately 10,000 transaction signatures in each time slot.

Note by Deep Tide: A time slot is a predefined period of time, usually a few seconds, used for proposing and validating blocks. Each slot has a pre-selected validator whose task is to propose a new block during that slot. To ensure the efficient operation of the network and prevent potential spam attacks or congestion, a limit may be set on the number of signatures or transactions that can be processed in each slot.

Account Abstraction and Social Recovery

Vitalik emphasized the importance and necessity of account abstraction multiple times. He believes that pushing for account abstraction is driven by two considerations:

• Convenience considerations: Users can pay gas fees with any ERC20 token, as well as perform multiple operations in a single transaction (signing, authorizing, verifying, etc.).
• Security considerations: Vitalik has also discussed with multiple multisig wallet and MPC wallet projects and believes that mnemonic-based schemes are still not the perfect choice, as the loss of mnemonics and private keys can lead to asset loss.

Meanwhile, Vitalik still favors social recovery. The main reason is that Vitalik approaches the habits and experiences of ordinary users, who may not understand private keys or may lose their mnemonic phrases.

In such cases, having an “asset guardian” who can help you is crucial. Considering that you may forget or lose your guardian, your friends or another device can also act as your asset guardian when needed; additionally, trusted institutions that provide cryptographic services can also play this guardian role.

In addition, account abstraction itself faces challenges. This challenge is not only an isolated technical issue but involves the entire cryptographic ecosystem.

For existing wallets, applications, and development tools, choosing to use account abstraction to improve user or developer experience inevitably involves technical adjustments and adaptations. Account abstraction is a technical concept, but it will certainly encounter practical implementation issues.

Furthermore, with the emergence of more Layer 2 solutions, the support and how to support account abstraction in different Layer 2 solutions also pose a challenge. Users may come across situations where one Layer 2 supports account abstraction while another does not.

The privacy infrastructure is one of the newly introduced components and is closely related to account abstraction. This means that to achieve account abstraction, it is necessary to ensure transaction and operation privacy, allowing different authentication methods and account types to work without compromising user privacy.

While promoting wider adoption of account abstraction, it is also necessary to consider how to address the issues of MEV to ensure fairness, security, and healthy development of the system.

Therefore, Vitalik believes that the promotion and popularization of account abstraction require joint efforts from all roles in the ecosystem, with the overall goal being to make the on-chain experience consistent with the experience of centralized services.

Scaling, Layer 2, and Privacy

With the emergence of Layer 2 solutions and the advancement of Ethereum’s own technology, scaling issues have been partially resolved. However, Vitalik believes the following challenges still exist:

• How to ensure the security and decentralization of the proof system when L2 transactions are packaged and submitted to L1?
• Most transaction sorters in L2’s technical components are centralized, which may pose potential risks.
• L2 has different technology choices and development directions. How to build wallets and addresses across different Layer 2 solutions to provide users with a better experience?
• Data related to transaction records needs space for storage. How to solve the data availability problem?

Due to time constraints, Vitalik did not provide a very detailed answer to the above questions. Instead, he highlighted all the problems that current scalability faces.

Interestingly, Vitalik also admitted in his speech that there are too many L2 solutions in the market right now, and it’s not necessary to jump straight into rollups when it comes to scalability.

He also gave some personal suggestions:

1. Projects should clearly define their needs in terms of security and scalability, at what level they are, and then decide whether or not to go for rollups.

For example, scenarios involving account key storage, high-value financial assets, etc., require high security, while games or non-financial applications may have higher scalability requirements.

2. Clearly understand the difference between Validium and Rollup and choose accordingly.

Validium is a Layer 2 scaling solution. It stores data off-chain but validates on-chain. This means it can handle a large number of transactions but may sacrifice some decentralization and security – particularly suitable for gaming scenarios, for example;

Unlike Validium, Rollup (especially zk-Rollup) keeps the data on-chain, which may not be favorable in terms of privacy or efficiency. However, if you want reliability or more security, you may choose zk-Rollup.

Based on the diagrams shown by Vitalik on site, for many projects, it may be reasonable to choose Validium for now, as it provides a solution that ensures transaction validity while achieving off-chain data availability.

But as the data space of Blob (used to compress large amounts of data into smaller “blobs” for more efficient storage in Ethereum) expands, projects can shift towards using Rollup, as Rollup provides more security and reliability by maintaining on-chain data availability.

Finally, Vitalik also mentioned three types of privacy issues currently faced by the Ethereum ecosystem:

• coin transfers: privacy issues during cryptocurrency transfers. For example, although many blockchain transactions are public and transparent, there is still a demand and technology aimed at making these transactions more private to protect users’ financial data.
• guardians: as mentioned earlier in the social recovery, guardians are authorized by users to make certain decisions or perform certain actions. The privacy of guardians may be related to their identity, controlled assets, or the operations they execute.
• identity/reputation and similar apps: on the blockchain, identity and reputation systems can help verify the authenticity and credibility of users or entities. However, these systems may also involve privacy issues as they may require the collection and display of sensitive personal information.

Conclusion

At the end of the speech, Vitalik summarized the overall idea for the future development of Ethereum:

• Maintain stability, solve cautiously: Maintaining the robustness of the Ethereum base layer is a prerequisite. Based on this, we can carefully expand other capabilities, such as scalability, user experience, and privacy.
• Find a balance between user experience and decentralization: Making Ethereum “user-friendly” for regular users is necessary, but in this process, we should not lose the benefits of decentralization.
• Technology and ecosystem are equally important: Technological development guides the direction, but how to implement and promote it still requires the joint effort of the entire ecosystem.

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