ETHEREUM TO CREATE A NEW BLOCKCHAIN ARCHITECTURE THAT’S DESIGNED TO BE GENERAL-PURPOSE: VITALIK
Vitalik Buterin’s invention Ethereum is creating news as its crypto currency “Ether” achieves the fastest price appreciation from $10 to $50 in a matter of a month with current valuation of over $4 billion amidst much controversy around Bitcoin and its ongoing price decline.Vitalik Buterin reveals the mystery behind Ether’s giddying price rise in an interview to Arifa Khan (Part 2).
Arifa Khan: What are your takeaways from Blockchain India Summit Dec 2016 and what are you looking to achieve in future?
Vitalik Buterin : I think the first trip to India went very well; and it looks like there is a lot of excitement and potential for future applications. The community is definitely still newer, and more focused on currency applications than some of the other things that other ethereum communities are trying to build, though I expect that it will rapidly mature. I am looking forward to engaging with multiple stakeholders in India in May 2017.
Arifa Khan: What is the reason behind the recent trend buckling and gravity-defying Ether price movement? In your view, what differentiates Ethereum most from all other alt coins?
Vitalik Buterin : The main difference is that whereas “altcoins” generally focus on payments, and on making small changes to the Bitcoin code base to try to improve some specific aspect, Ethereum focuses on creating a new blockchain architecture that’s designed to be general-purpose, so that you can use it for any applications that might benefit from being on a blockchain. The community is very diverse, including researchers, developers and many others, all with a strong focus on making the technology better and as scalable and safe as it needs to be to achieve mainstream adoption.
Arifa Khan: How long do you give Ethereum to achieve the original goals of a decentralised general purpose world computer that you had envisioned it to be in 2014?
Vitalik Buterin: I think it’s ready for some applications already, but will still take quite a bit of time to achieve its full potential. Right now there are still technological limitations that prevent the platform from being used for many large-scale mainstream applications, but once things like sharding, zero knowledge proofs and proof of stake are in place, it will be ready for much more.
Arifa Khan: What are some of the important problems you are attempting to solve in DLT? How are you going about it?
Vitalik Buterin : Technologically we have identified four major challenges with current Ethereum technology:
Scalability: currently, the Ethereum blockchain can process ~15 transactions per second, but it requires somewhere above 100,000 TPS. Current incremental approaches to scaling blockchains cannot work; they all hit the fundamental barrier that because every node in a blockchain must process every transaction, the network cannot process more transactions than a single node. We have an approach that we call “sharding” that essentially randomly selects nodes to process different transactions in parallel, allowing the network to become more powerful the more nodes there are, but this still will take years to complete
Privacy: all data on a blockchain is completely public, and this is unsuitable for many applications. Our approach is to use cryptographic technologies such as zero-knowledge proofs, ring signatures and partially homomocrphic encryption to create second-layer systems that allow many kinds of applications to preserve privacy on top of a fully transparent base layer
Latency: currently, operations on Ethereum take ~14 seconds to confirm; this is fine for many applications but in many cases (eg. retail payments, IoT) it’s not fast enough
User interface security: this consists of two parts, where one is making sure users can access their accounts in ways that are secure against them losing access due to private key loss or theft, and the second is minimizing smart contract bugs.
Arifa Khan: Will Bitcoin code remain the same or will new features be adopted that will unrecognisably change the underlying algorithms?
Vitalik Buterin : I think features are going to be adopted, but the process will be slow; Bitcoin’s politics are such that little can happen quickly, and there are so many constituencies with strong beliefs for large changes that make tradeoffs to be feasible. If we are thinking of bitcoin as “digital gold”, this may well be a good thing; gold is meant to be stable, hard to change and boring. However, these governance properties will also make it very difficult for bitcoin to enter other areas, like applications.
Arifa Khan: Crypto economies with decentralised Apps building their own circular economies – do you think this is fad or the future?
Decentralized society and economy is best built from the bottom up, not trying to make a coordinated effort to do the whole thing at once but rather creating services that offer people the capacity for self-governance in various aspects of their lives (including companies, nonprofits, clubs, services like decentralized airbnb, etc), making things that are useful and empowering to people at each step, and then go from there. I think over the next couple of years we will see some efforts making serious headway.
(Part 1 of the interview can be seen here: http://www.dailypioneer.com/business/ethereum-as-a- platform-has-many-things-that- are-unique-about-it–vitalik- buterin.html. Ms. Arifa Khan is Ethereum Foundation’s India Partner)