Vitalik Buterin Details 3 Important Transitions For Ethereum To Succeed

Ethereum (ETH) co-founder and crypto pioneer Vitalik Buterin has recently made a statement regarding his vision for the future development of the renowned blockchain network. According to Buterin, Ethereum needs three features in order to have real staying power in the world. They are:

• Layer-2 scaling
• Wallet security
• More robust privacy features

Buterin detailed why these three major technical "transitions" were so crucial to Ethereum in a blog post on 9 June.

1. Scaling Up To Mass-Market Use

The Ethereum co-founder's blog also noted how these developments would need to happen almost simultaneously and that the Ethereum blockchain would fail outright without a satisfactory scaling solution. In other words, if the Ethereum network really wants to stay competitive and become the worldwide computing of choice, transactions must become — and remain — affordable for users.

"Ethereum fails because each transaction costs $3.75 ($82.48 if we have another bull run), and every product aiming for the mass market inevitably forgets about the chain and adopts centralised workarounds for everything," Buterin wrote in his personal blog.

2. More Secure Wallets

Buterin explained the problems with the smart contract wallets currently used by Ethereum, noting that they were especially complicated for users controlling multiple addresses. He opined that wallets on Ethereum would have to secure both crypto assets and user data in order to be useful in an on-chain world with zero-knowledge (ZK) rollups. 

Vitalik writes, "In a ZK world, however…the wallet is not just protecting authentication credentials, it's also holding your data."

In a zero-knowledge protocol, one party (the prover) is able to prove to another party (the verifier) that some particular information is true without revealing other data apart from the truth of that specific piece of information. If your ETH wallet is being used in ZK blockchain applications, then it also needs high security to avoid revealing any other data other than what is strictly required for the ZK protocol.

3. Better Privacy Controls

Improved privacy on Ethereum will, according to Buterin, come in the form of increased identity, reputation and social recovery systems. Without the latter, he argues, "Ethereum fails because having all transactions (and POAPs, etc.) available publicly for literally anyone to see is far too high a privacy sacrifice for many users, and everyone moves onto centralised solutions that at least somewhat hide your data."

Contrary to the uninformed popular opinion, blockchain transactions are not anonymous but rather pseudonymous, as transaction history can still be traced by particular addresses. As a solution, Buterin proposes that stealth addresses (special one-time addresses generated to anonymise transactions) could be implemented, but he says that achieving improved privacy on Ethereum by all three factors would be "challenging" because of the "intense coordination" involved in balancing them.

Ethereum is based on a "one user, one address" model, which keeps things simple. If extra privacy controls are not implemented thoughtfully, then it may become difficult to be sure that you are paying the right person on the network. And much like the issues with improving wallet security, tighter privacy controls could complicate things for users managing multiple addresses.

Prioritising User Experience

Vitalik Buterin's blog ultimately concludes with his commitment to improving the user experience of everyone engaged with the Ethereum network:

"Despite the challenges, achieving scalability, wallet security, and privacy for regular users is crucial for Ethereum's future. It is not just about technical feasibility but about actual accessibility for regular users. We need to rise to meet this challenge."

So far, Ethereum may be crypto's biggest success story. Although it lags behind Bitcoin (BTC) by market cap, all the major innovations related to cryptocurrency — smart contracts, dApps, DeFi — are based on or inspired by Ethereum. If there is any blockchain project that stands a chance of mass adoption, it is Ethereum. If the co-founder's list of problems shows that there is still progress to be made, it also demonstrates a commitment to the evolution of Ethereum into a cheaper, secure and accessible platform for everyone.

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