An Ethereum blockchain developer and a co-founder of the eponymous Foundation, Vitalik Buterin, visited Russia for the fourth time in late August. In Kazan, where authorities have announced an introduction of blockchain technolog, Buterin presented the president of Tatarstan, Rustam Minnikhanov, with a cryptocurrency wallet. In Moscow, Buterin signed an agreement with Vnesheconombank (VEB) to establish the bank’s own Blockchain Competence Center on the technological basis of the Moscow National University of Science and Technology “MISIS.” The VEB Chairman Sergey Gorkov called Buterin a “crypto-god”. During his visit, Buterin agreed to answer the Invest-foresight questions. The following are most interesting and notable answers of a famous programmer.
About Bitcoin
– In 2011, I learned about Bitcoin and began to write for a magazine called the Bitcoin Magazine and in the following six months became its co-founder. For each of my articles, I got paid 4 Bitcoins or $20. For 8.5 Bitcoins I bought a t-shirt. What did I like the most about Bitcoin? It gave people an opportunity to create their own new financial system and to interact directly with each other financially.
On invention of Ethereum technology
– After I became closely involved with the Bitcoin community for two years, I decided to leave the University to dedicate myself to this field full-time, and started traveling to see other projects associated with Bitcoin that people have already been doing. I traveled to the USA and Europe. Israel had at the time some very advanced projects, since they realized earlier that the blockchain wasn’t just a thing to be used strictly for cryptocurrency, but it was something more general, with at least several thousand applications. In Israel, the developers had already been building a Bitcoin-2.0 platform that supports all sorts of applications.
First, I started to work for one of their companies, and worked for a few weeks, when I realized that they have a limited approach to this technology. In essence, they made it similar to a Swiss knife: One protocol had twenty tools for twenty different types of transactions. One type of transaction was to issue currency, the second was just to register, the third would only allow to initiate a financial interaction, etc. The problem approach was that all what this blockchain could do was twenty operations, but what if a week later someone smarter would come up with transaction number twenty-one? From there, I came up with a second approach: Instead of making twenty types of transactions, I created a blockchain with a programming language that allows to have any application. I also wrote rules of this new language application.
On the digital economy
– I think that the economy of the 21st century will be mainly digital, and that information will become the 21st century’s oil.
About cryptocurrency mining
– It’s possible to treat cryptocurrency mining as a business. There is also an opinion that if a country gets at least 15% of the network, it would get some political advantage. It’s not really true. If you want to have greater influence on the future of the network, it’s not necessary to support mining, but to support the research and development of the new technologies.
About new perspective for the blockchain applications
– First of all its financial application, to improve methods of payments and different financial contracts (e.g., decentralized insurance, investments, crowd-funding); further, it’s possible improvement of the public registers. For example, a real estate register using the blockchain will allow you to sell a house in a matter of minutes, not weeks. It also will enhanced the Internet security of the consumer products, such things as the DNS and logistics to allow to see where a product is produced and to find out its quality, in short, it will provide the consumers with information related to identity of the product, provide financial contracts; and storage of databases.
About ICOs
– I understand why so many ICOs are being offered nowadays. It’s hard for people to monetize even the most useful skills. For example, fixing bugs in open source software projects. To us, $18 million helped to develop the platform. Today, however, there are lots of ICOs that offer new tokens without any benefits; programmers just want to make money. They have a choice: To continue working in a basement, or to buy a hundred Lamborghinis. Also, there is a second problem, even while you’re creating a decentralized platform, you are trying to use the ICO, which in its core is a super centralization. It’s another case when you have a great team, and people trust your team enough to say, “Here is $50 million. We trust you. Do what you want to do.
About crypto currency
– Crypto currency won’t replace fiat money one hundred percent, but in 20-40 years there will be a lot of different cryptocurrencies. Different companies will produce their own money to obtain customers’ loyalty. The Burger King in Russia started issuing its own whopper-coin. There might be currencies issued by cities. In 50 years a person will have a wallet with 10 different cryptocurrencies in it.
About the blockchain security
– There is a Silicon Valley saying: Move quickly and be ready to break stuff. The security of blockchain will be improving. Quantum computer represents a threat for a large share of the cryptography, but not to all those not using hash algorithms, or signatures that are too long. But, it’s also true that quantum computers threaten the entire financial system all over the Internet.
On the blockchain on a state level
– I believe in blockchain on a state level. The blockchain is only a part of the same trend towards an increasingly digital world. In 50 years, man will have more friends abroad than near his house.
About Metropolis
– Metropolis is the next software upgrade, the next hardfork for the Ethereum Protocol. The main change is the addition of a few new features to make the use of cryptography easier, and to make it easier to verify signatures. It also allows for easier, seamless interaction of Ethereum with other systems. Estonia has a program that allows a person to become the country’s digital resident. As part of this program, an ID card is issued and it can be used as an ID to interact with the government online; to open a bank account, for example. With this device people can also interact with the Ethereum blockchain.
Advice for startups
– Mainstream hype of cryptocurrencies has reached the ceiling. Vladimir Putin knows what a blockchain is; if it is not the ceiling, what is? There is a need to move from hype to achieving some real results.
Recorded by Nataliya Kuznetsova