Ethereum’s Vitalik Buterin Speaks About Blockchain, its Future, and Cryptoeconomics

Yesterday’s Conversations With Tyler podcast hosted the Founder and the chief scientist of the Ethereum Foundation, Vitalik Buterin.

In the hour-long interview, Buterin talked about a wide variety of subjects connected to the blockchain technology in general, the future of the industry, and the cryptoeconomics and their very meaning.

In his starting disclosure, he defined the term cryptoeconomics, marking it as the economics with particular constraints and additions from fields that came from the cryptocurrency space  — “cryptography, information theory, math, and distributed systems, with all of the research around consensus algorithms, hash functions, signatures, zero-knowledge proofs, and what we know about all of those primitives.”

Talking about the same subject, Buterin explained in simplicity: “Basically we’re trying to figure out, given these constraints and given these building blocks, what kind of systems and what kind of mechanisms can we design to achieve the properties that we want? And under what kinds of assumptions do those properties hold?”

The founder of Ethereum went on to explain his vision of the blockchain technology. One of his analogies is the idea of a “world computer,” as the blockchain functions just like that.

It has a hard drive on which it stores what all the accounts are, and what the code and the memory of all these smart contracts are.

Blockchain accepts incoming instructions , which are signed and sent by a bunch of different users , and processes them according to a set of rules.

“On a blockchain, you can ultimately build anything that you can build on top of a computer,” Buterin explained. “From a computer science theoretical point of view, in terms of what it provides, you can think about it as being a computer.”

He also addressed the burning issue of the hyperinflation of cryptocurrency tokens issued through ICOs by stating that although it is costless to produce a new token, it isn’t costless to issue a cryptocurrency which investors recognize as valuable.

“It is possible to join the club (of valued cryptocurrencies),” Buterin declared. “But joining the club requires that you undertake some kind of costly signaling expenditure — in some ways burn capital, burn resources, or consume something unique — which is just difficult enough that it prevents people from doing it willy-nilly to the point where all the cryptocurrency hyperinflates.”

One of the main topics of the interview was the decentralization and its various aspects. Buterin differentiated the two; the architectural decentralisation, which already exists in large parts of Amazon AWS, and lots of military hardware, and political decentralization. Both of those are looking to be achieved, according to Buterin, via blockchain.

“The architectural side —  it’s not run on one piece of hardware, and, politically, it’s not run by one single person or small cabal of people at the same time,” he explained.

Towards the conversation’s ending, Vitalik talked about Ethereum and its future possibilities, while explaining the capacities of the network.

“Ethereum’s blockchain capacity right now is about 15 transactions per second,” he stated the known fact. “If you even consider something like putting all of the Uber rides on the blockchain, that’s 12 transactions per second already. If you talk about moving PayPal over, that gets into the hundreds, and then anything more complex starts moving into the many thousands.”

With this final quote, Vitalik Buterin supremely illustrated how tall is the mountain that blockchain technology has to climb to be able to comply with all the needs of the modern society.