3 transitions Ethereum needs to make: Vitalik Buterin

Ethereum co-founder Vitalik Buterin believes that Ethereum still requires “three major technical transitions” to fully mature as a tech stack, and anything less will fall short.

In a blog post on Friday, the developer outlined what it takes to implement each of its ideal enhancements, which could include “deep app and wallet changes.”

Scaling, security and privacy

According to Buterin, Ethereum’s three transitions include layer 2 scaling (rollups), enhanced wallet security (smart contract wallets), and enhanced privacy, both for standard funds transfer and other Ethereum applications.

“You can only choose 3 out of 3,” the developer wrote. The failure of just one of these transitions would mean a failure of the entire protocol, as users are incentivized to adopt cheaper “centralized workarounds” that are more reliable and “hide their data in some way”.

However, the transitions will be difficult: for example, the adoption of layer 2 protocols and stealth addresses will encourage users to use many more blockchain addresses, dismantling the “one user ~ = one address mental model” with the that the ecosystem has become familiar with. . For Buterin, this raises the following questions:

“If you want to pay someone, how will you get the information on how to pay them?…If users have a lot of assets stored in different places across different chains, how do they do key changes and social recovery?”

Each transition will also require updated secondary infrastructure. “Using ENS is expensive,” Buterin wrote, referring to the Ethereum Name Service – a system for applying human-readable names to blockchain addresses.

During a bull market, Buterin estimated that the fees to register a domain name could climb back above $100. Fortunately, ENS has been developing tools to make their system work on L2, which will allow for the “almost free” domain registration needed for “people to actually use ENS.”

“Radical reforms of the kind we need are indeed possible,” Buterin wrote, “but there are many more application-layer reforms that will need to be made.

Basic Ethereum Use Cases

In December 2022, Vitalik reflected on feasible use cases for Ethereum, stating that “money” remains the most important application ever discovered for blockchain.

However, others, such as decentralized finance (DeFi), remain relevant as long as they stick to over-collateralized simple lending products and do not inflate into an “overcapitalized monster” that relies on unsustainable forms of agriculture. performance”.

Some ideas, however, are not realistic:

“Industrial supply chain applications haven’t gone anywhere,” he wrote at the time. “Amazon decentralized on the blockchain hasn’t happened.”