Exclusive Interview with Vitalik Buterin: Ethereum, Bitcoin, ICO & More
On April 11, Vitalik Buterin, co-creator and inventor of Ethereum, a decentralized mining network and software development platform, flew to Moscow for an open lecture at Digital October Center, which is on a strategic mission to facilitate development and adoption of the Blockchain technology. The lecture was organized with the support from Wavesplatfrom prior to the upcoming international Blockchain event “Genesis Moscow Conference”.
Before the meetup, the Blockchain industry star and investors’ favorite boy spent some time chatting with the Cointelegraph about ICOs, ways to free the industry from scammers, regulations of cryptocurrencies, and other issues.
Why don’t we just gather up into consortium?
It now seems that gathering up into consortiums is trendy. There hasn’t been a week with no announcement about some global financial company or tech giant joining some sort of consortium or establishing one of its own. It is certainly a good thing, as more things can be done and faster with joined resources.
However, there are certain concerns about their efficiency. Buterin points out:
“I think that in general consortiums are a good way to build a partnership between large companies. In theory, they can be quite beneficial for one simple reason the main purpose of Blockchain applications is to create a decentralized system which is free from an absolute control by only one entity. So, it doesn’t really make much sense for one company to work with Blockchain, however, if a number of companies establish a partnership, results won’t take long to wait.”
In his opinion, this is one of the advantages of consortiums. Another advantage lays in that companies certainly contribute to the development of technology in general, not only a specific use-case, and it is very important.
“Some consortiums are created just because it seems to be trendy, and there is a risk to spend a few million dollars and come up with a technology which is much worse than the one built by a group of hackers who sit somewhere in the basement,” remarks Buterin. “There are advantages but there are risks as well.”
Blockchain inspires, R3 couldn’t resist
Lately, there has been much criticizing going the R3 direction triggered by their sudden realization of not needing Blockchain after all. Yes, sometimes it happens, you want something so badly you direct all of your efforts on making it happen, agitating a bunch of world’s largest institutions to make the party bigger and merrier. And that’s okay if eventually, you realize that you can survive without something you’ve been chasing so blindly.
Was it the Dalai Lama who said that sometimes not having something is a wonderful stroke of luck? Blockchain or Blockchain-inspired – who actually cares? Now that R3 has redirected their energy on realizing the benefits of distributed ledger technology, we will just let folks do the things they have gathered for.
“Actually what everyone is saying about R3 is a little bit too harsh, that they spent 18 months working with Blockchain, realized that it is useless, decided to drop it and move on. Actually, I have been communicating with people from R3 during all this time and from the very first day they were very frank saying that they are working on a Blockchain-inspired technology. I believe that the recent change in their strategy was simply misinterpreted. The question here is different – whether this Blockchain-inspired technology is going to be useful. Obviously, they have brilliant people in their team, who have been communicating a lot with banks and understand very well what banks really need and look for. There is a chance they will achieve what they are aiming at.”
Buterin shares a famous quote by Henry Ford ‘If I had asked people what they wanted, they would have said faster horses’, and continues: “It is maybe not always helpful to ask people what they really want. Besides, we can always take smaller steps moving towards progress, but we can’t call it a technological revolution. My opinion is that R3 is not going to start a technological revolution.”
Many people say that Blockchain is a technology way ahead of its time and that it is bringing too radical changes. Buterin sees that what the community is now doing might be risky, but if everything goes well, the results will be fantastic.
Plans for improving Ethereum
Quite recently Buterin announced that Ethereum is ready to transition to the proof of stake protocol, at the open lecture in Digital October, he confirmed that the transition will start soon, but not necessarily will be completed soon, as there is still a lot of work to be done.
He also shares general plans concerning further development of Ethereum:
“There are a few perspectives. First of all, we will keep developing the technology and solving pressing challenges, some of them we already started working on, but there is still a lot to be done, including scaling, confidentiality, security issues. These issues need to be solved to ensure further development of the protocol and the whole ecosystem. Besides, we are focusing on the expansion of the system – to make sure that more projects are building on top of Ethereum, more companies and users working with the platform, exploring new use cases.”
ICO is a brilliant model but needs improvements
Cointelegraph was also curious to hear Buterin’s opinion concerning the first wave of ICOs and the ways to ensure the cleanliness in the space from all sorts of scams.
Buterin says to Cointelegraph:
“ICO as a model has a number of huge advantages. For instance, through ICO we can democratize participation in the projects from the very beginning. This model is a perfect way to give everyone an opportunity to contribute to the development of the project from the very early stages. We definitely need to work hard to improve this space. There are a lot of projects nowadays launching their ICOs, some of them are really brilliant and promising, some simply will not kick off, but there are also this kind of ICOs where people are trying to raise funds with one simple goal – to escape with these funds. Sometimes it’s really hard to see the scams among ICOs.”
Buterin thinks that smart contracts could actually solve some of the problems in this space. For instance, in his opinion, the money invested in the ICO should not go directly to the team behind ICO, instead, it should be forwarded to the smart contract controlled by a number of people, assigned as trusted entities.
Funds should be forwarded to the team only upon authorization given only when it was proved that the project is indeed under development.
“This model has a potential to significantly decrease a number of scams among ICOs. It could be brilliant to have some independent organizations or analysts who would evaluate projects and give recommendations concerning investment prospects. The solution will be found through this kind of approaches. It is important to keep in mind that due to an increasing number of scams, really good projects often get a negative feedback from the community only because people get suspicious and think that all ICOs are scams.”
Bitcoin can mature without ETF
It is never boring in the cryptocurrency community, would you agree? We have lived through all kinds of dramas. The recent decision of the Securities Exchange Commission to deny the proposal for Bitcoin ETF triggered another one. But we didn’t stay disappointed for long. Bitcoin price might have plunged following the decision but it soon recovered, so as our broken hearts.
“Indeed the proposal for Bitcoin ETF was recently declined in the US, but I know that in other countries there are a few Bitcoin ETFs, there is even one in the US, however, it operates under special conditions. I am certain that in the short term cryptocurrencies are able to grow and mature even without these funds. Those who want to take part in the cryptocurrency industry will do it without any ETFs. The fact that the proposal was declined doesn’t actually make any harm to Bitcoin.”
Good for Bitcoin – good for altcoins
A few industry experts recently pointed out to an interesting trend – when the Bitcoin price declines, people don’t rush to back to traditional currencies, they rather invest into alternative coins, therefore staying within the cryptocurrency space.
“This is happening because people start realizing that cryptocurrencies actually have the future. Besides, people understand that there is a problem specific for Bitcoin, which significantly slows down the system. If this problem persists, it will only harm Bitcoin and not other cryptocurrencies. The market understands that what affects Bitcoin would not necessarily affect other cryptocurrencies.”
However, in general, Buterin agrees that what’s good for Bitcoin, good for other cryptocurrencies, and maturation and wider adoption of Bitcoin have only positive implications for altcoins. “There is certainly some degree of competition between cryptocurrencies, however, I think that cooperation is getting more important than competition,” he says.
Speaking of the relationship between Bitcoin and Ethereum, Buterin says that these two have stopped competing long time ago:
“Well, Bitcoin and Ethereum are doing different things. Bitcoin is a digital currency, and the protocol is written to sustain this cryptocurrency. Clearly, Ethereum platform has ETH, it is also a digital currency, but it exists to sustain the protocol. The protocol was written for a vast amount of applications, both in the area of payments and going far beyond payments.”
Generally, Buterin seems to be optimistic about the current state of cryptocurrency industry, and the fact that regulators are showing more and more interest in this phenomenon of digital money, which at first seemed to them all bizarre.
“There are advanced governments all around the world. Central Banks in Estonia, UK, Russia are testing cryptocurrencies and their potential. Actually, people interested in cryptocurrencies are everywhere, but another question here is how to convince others to start learning about it at least, and then make them understand that this thing should be allowed and not forbidden. At this point, it all looks bright I think, we will see what happens next.”
Blockchain Weekend arranged by Digital October in Moscow has established itself as a practical course in which you can immerse yourself in the world of Blockchain technology, not just by listening to the lectures but also by upgrading your skills, and of course talking directly to the industry professionals. On May 26th, 2017, Digital October with support from Wavesplatform is to hold the first international Blockchain conference in Russia “Genesis Moscow Conference” with top-notch speakers and true legends of the Blockchain community. You can pre-order now.