Ethereum co-founder Vitalik Buterin believes that Ethereum’s success will come down to three major technical “transitions” that need to happen almost simultaneously: Layer 2 scaling, wallet security, and privacy-preserving features.
In a June 9 post via his personal blog, Buterin explained that the Ethereum blockchain “fails” utterly without an infrastructure of sufficient scale to make transactions cheaper.
“Ethereum fails because each transaction costs $3.75 ($82.48 if we get another bull run), and every product that targets the mass market inevitably forgets about the chain and adopts centralized solutions for everything,” he said.
The three transitions:https://t.co/rtewRnm2wK
— vitalik.eth (@VitalikButerin) June 9, 2023
Another point of failure, according to Buterin, relates to smart contract wallets.
He explained that the move to smart contract wallets has caused some problems, due to the complexities on the user experience side when users take control of multiple addresses at once.
In addition to wallets securing crypto assets, Buterin explained that wallets would need to protect data to make a real transition to an on-chain world with zero-knowledge accruals:
“However, in a ZK world, this is no longer true: the wallet not only protects the authentication credentials, but also stores your data.”
The last of Buterin’s three transitions, privacy, should come in the form of improved identity, reputation and social reclamation systems.
“Without the third party, Ethereum fails because making all transactions (and POAP etc.) publicly available for literally anyone to see is too high a privacy sacrifice for many users, and they all move to centralized solutions that at least hide a bit your data”. he said.
The Ethereum co-founder suggested that stealth addresses could be implemented to solve this problem.
Related: Vitalik Buterin Reveals 3 ‘Huge’ Opportunities for Crypto in 2023
Buterin said achieving all three will be “challenging” because of the “intense coordination” between them.
He admitted that each of the three transitions “weakens” the “one user, one address” model, which, in turn, can complicate the way transactions are executed.
“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?” he added.
Buterin concluded by emphasizing the need to build an infrastructure that ultimately improves the user experience:
“Despite the challenges, achieving scalability, wallet security, and privacy for regular users is crucial to the future of Ethereum. It’s not just about technical feasibility, but about actual accessibility for regular users. We need to rise up to meet this challenge.”
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