ethereum co-founder Vitalik Buterin shared his thoughts on the changing landscape of the crypto ecosystem on December 29, primarily focusing on ethereum's role in shaping a more open and decentralized Internet in a eth.limo/general/2023/12/28/cypherpunk.html”>blog post titled “Making ethereum Cypherpunk Again.”
Since its inception, ethereum has gone beyond being a mere extension of bitcoin with smart contracts. Buterin recalls his earliest memories of using bitcoin at Berlin's bitcoin Kiez and at PorcFest, a libertarian gathering, highlighting the intertwined nature of technological and social aspects in the world of cryptocurrencies. These experiences emphasize the broader vision of cryptocurrencies: fostering a free and open society where technology, social and economic elements interact harmoniously.
The initial concept of “web3,” coined by ethereum co-founder Gavin Wood, envisioned ethereum as a fundamental component of a more open Internet stack. This vision aimed to overcome the limitations of the free and open source software movement of the 1980s and 1990s, which did not take into account the collaborative and centralized nature of modern Internet applications. ethereum, along with technologies such as peer-to-peer messaging and decentralized file storage, was seen as a shared, decentralized hard drive, crucial to extending the spirit of open source to today's interconnected world. For Buterin, the following table describes the main benefits of decentralized technologies.
However, Buterin sees a shift in focus since around 2017, with less emphasis on consumer crypto payments and non-financial applications. This shift is partly attributed to rising transaction fees on the ethereum network, which have ruled out more minor, non-financial uses in favor of financial applications dominated by speculative activities. According to Buterin, this change has caused a misalignment with the original vision of ethereum and the broader crypto space.
Looking ahead to 2024, Buterin highlights several positive developments in ethereum technology that could return the platform to its founding principles. These include advances in rollups, second-generation privacy solutions, account abstraction, thin clients, and zero-knowledge proofs. These technologies address the challenge of scalability and embody the values of decentralization, censorship resistance, and open participation.
As part of a broader technological vision, Buterin says, ethereum continues to develop its original components and “sister technologies,” such as decentralized messaging and decentralized storage. The introduction of zero-knowledge proofs adds a new dimension, enabling privacy and authentication simultaneously. For example, Buterin points out how Zupass, a zero-knowledge-based system, successfully implemented anonymous voting, demonstrating the potential of ethereum-based technologies to achieve privacy without sacrificing security.
“We can begin to see the contours of what an ethereum-style cypherpunk world would look like, at least on a purely technical level.
We can hold our assets in eth and ERC20 tokens, as well as all types of NFTs, and use privacy systems based on stealth addresses and Privacy Pools technology to preserve our privacy while blocking the ability of known bad actors to benefit. from the same set of anonymity.”
Buterin also emphasizes ethereum's role in developing a decentralized technological protocol stack, which competes with traditional centralized systems. This stack includes banking, social media, and identity verification alternatives, highlighting ethereum's commitment to creating tools that interoperate with a broader ecosystem rather than creating isolated empires.
According to Buterin, ethereum's social layer is equally crucial. He recognizes the need for a balance between incentive-driven and community-oriented approaches. Large-scale public goods financing and cooperative efforts within the ethereum ecosystem are steps toward this balance, but there is much room for growth and improvement.
“There is a unique combination of valuing a warm and cohesive community, but at the same time remembering that what feels “warm and cohesive” from the inside can easily seem “oppressive and exclusive” from the outside, and valuing strict norms of neutrality. “Open source and censorship resistance as a way to protect against the risks of going too far by being community-driven.”
Ultimately, Buterin envisions ethereum as a platform that excels technically and economically and fosters a strong, values-driven community. Buterin closes his publication by stating:
“If you can make this combination work well, you will in turn be in the best possible position to realize your vision economically and technically.”
Buterin believes that integrating technical innovation with social and ethical principles could lead ethereum to realize its original vision of a decentralized, open and equitable digital world.
