Hello everyone. I am very happy to be here. Hmm, I've been working at the Ethereum Foundation for almost 5 years. I have been researching the fundamentals of Ethereum for seven years. Last year I led the scaling effort at the Ethereum Foundation, and now I also co-lead Ethereum’s governance process, the Okodas process.
And today I'm just here to share some thoughts. I am not here on behalf of the Ethereum Foundation. It's really more personal, hmm, about what I think is this new time period that cryptocurrency in general and Ethereum is in. And I think actually this conference has been absolutely wonderful so far, and I think it's symbolic of this new period of time. And what do I mean by that?
Well, but for that, let's first go back. Hmm go back. Hmm , 2014-2024, of course, where to start is a bit ambiguous. I chose the Ethereum yellow document, the Ethereum technical specifications, as the beginning of truly smart contracts. Um, smart smart contract blockchains, the idea of smart smart contract blockchains, could have started a year earlier or later.
Um, and I think that was the starting point of something very new. Like the first few years of blockchains, Bitcoin and CO, which were really just about cryptoassets, er, cryptocurrencies. And then with Ethereum came the idea that blockchains could be a fundamental infrastructure layer infrastructure layer . So the first 10 years of blockchain were really about building a technology stack technology stack that required a lot of zeros. I've listed a few here.
You can list a lot more, a lot more, like wallets, transaction supply chains, uh, all sorts of things. Uh, like you, you needed to build the entire tech stack from scratch, not just zero units. I-er zero units. I-er , I called it zero units, but I really enjoyed bringing all these individual ingredients to maturity. And what does 2024 mean?
Does this mean the work is finished? Of course, I know that work is ongoing. The Throne Foundation, many different organizations in the ecosystem continue to develop blockchain-based technologies. But what has changed is that blockchains are truly ready. And in particular, I would call it the CHP moment.
I think I also heard Tom Lee use essentially the same phrase. And it's an interesting mental model because unlike artificial intelligence, where there was really a single moment, a moment where the industry went from infrastructure to implementation, I think cryptocurrency went through a similar transition, but it wasn't one, um, single reason. It was a perfect storm of individual elements coming together at the same moment in time moment in time . First of all, as you know, I said that the technology stack has really become ready for really broad use. Secondly, of course, we are in the USA now.
Cryptocurrency is truly global, but the US is a very important location for financial use cases. And so the transition in the US regulatory environment from openly hostile to a very friendly environment, of course, happened right when the technology was ready. And then stablecoins, stablecoins really evolved slowly evolved slowly . They started a few years earlier, but at this difficult moment they really hit PMF not only for internal cryptocurrency use cases. So, taking all of this together, you really got the equivalent CHP moment for cryptocurrency.
So I would say that as of last year, cryptocurrency as a whole is in, let's say, a decade of adoption. And what does this mean for Ethereum? What role should Ethereum play in this, uh, this world? And to do this, I would first like to answer the question: what kind of world could happen that we don't want? And this is what I drew here.
So basically, this is the potential world that this cryptocurrency could end up in. Basically, you have all sorts of different systems: you have some general- purpose chains, some application chains, some chains focused on privacy, some on permissioned use cases, all of these are valid, useful, important use cases use cases . But essentially, in this world, they're all just independent of each other in, in, in, in their own separate corners, and then you have to essentially build separate connections between each, each one of them, right? So why is this bad? Well, for a number of reasons, but the two I would like to highlight here are, um, security, right?
So, essentially, in this world, we have seen that maintaining the security and performance of a blockchain is actually a non-trivial task. There have been many failures in the past, and here each chain must essentially provide its own security, and each user, institution or consumer, must think about the security model of each individual chain with which it interacts. But the more important reason why I think this is a bad outcome is the fragility of compatibility, the fragility of connections. Yes? Whenever you want to interact, you want to interact between two of these systems, you have to create an individual link, uh, you have to create a link to a pair of chains.
You must create a reference to a pair of assets for each use case. Uh, both this and these links are very vulnerable. We have seen many times that these links can fail. So what is Ethereum's response to this? What kind of world is Ethereum aiming for?
And I tried to outline it a little bit here. Of course, they all try to convey more intuitive understanding, but Ethereum's response is to say: look, setting up all these separate environments is great. This is exactly what we want to accept. Of course, this is where there is a need. You can have direct applications on Ethereum.
You can have general purpose chains on top. You can have, uh, even things like L3 being even things like L3 being explored. You can have privacy zones, permission zones. They can be at a basic level. They could be somewhere else.
What makes this different from the previous picture is that it previous picture is that it all happens on the basis of a single fundamental structure. All this happens on Ethereum. Um, why is that good? It's not just, you know, I'm an Ethereum fan. Of course, I want all of this to be on Ethereum.
But why do I think this is an objectively better world, right? And just to remind you, usually when new technologies are introduced , standards are set, they usually remain unchanged for many decades. So why is it important to have a sense of what the future of financial technology will look like for the next few decades next few decades ? Well, it goes back to basically the same, um, points I just talked about. I've laid them out here in the text, but mainly the first two, the first being the most important: trustless compatibility on bridges.
So what that means here is , because all these chains are going back to Ethereum L1, you can establish a connection between any pair of any chains, any pair of execution systems; again, these could be L1 applications, any pair of assets, any type of use case. You can establish a completely trustless connection if that is the only way. Now, I want to be completely transparent: the Ethereum ecosystem doesn’t look like this today, does it? It is still an aspiration. Um, and I will say that in this era of implementation that we live in now, making that promise a reality is really an absolute priority.
This should be an absolute priority. But only by being at the top of the equity chain do you have the potential to get to that place, and it's clearly a much better place to tightly integrate these systems. Uh, the second important thing is security guarantees. Uh, Ethereum is famous. Um, um, you know, if people have to name one thing about Ethereum, it's often perfect uptime, um, perfect reliability, um, high security.
And that was basically the promise of L2 from the beginning, basically, by basing the whole system on Ethereum L1, you can extend the security guarantees of Ethereum to all these places, and then of course there are other, um, um, additional benefits, right, like me? Right? It's like you still have the same full customization capability. There is sometimes this misconception that because everything is rooted in Ethereum everything is rooted in Ethereum , it must have exactly the same properties in every single place, right? As in the case of you, you need to be completely flawless completely flawless .
Of course, you can mix and match what you need for your system. You can create privacy, you can do whatever you need for your system. You can do this on top of Ethereum. And I think that's top of Ethereum. And I think that's actually very important.
Uh, Ethereum L1 as a single point of entry means that as a user you really only need to understand Ethereum and everything else comes from there. And for example, if you want to put some asset on the blockchain, all you have to do is talk to Ethereum, you put your asset on Ethereum, and from there it will just propagate to wherever it needs to be, wherever it wants to be. And of course, if you want to set limits set limits , that's also possible. So, overall, I really think this is a much better outcome. Last but not least, I would like to mention this here.
ETH hasn't gotten that much love in recent months, but in fact, in this world, ETH's role is very, uh world, ETH's role is very, uh , fundamental because it's the only natural asset in the on-chain economy. So this is where we're trying to go trying to go , where Ethereum is trying to go, how is Ethereum trying to get there? And here I would just like to point out one specific aspect, one specific element of how Ethereum is trying to approach this. And I quoted, uh, it's from Vitalik's tweet, maybe a week or two ago. Er a week or two ago.
Er , the quote suggests that the Ethereum Foundation is not the center of Ethereum, but rather the Ethereum Foundation—it is one node with a specific purpose alongside other nodes. And I think I'd just like to give a little bit of background. Of course, again , I'm not speaking on behalf of Vitalik, I'm not speaking on behalf of the Ethereum Foundation, but because I think people have n't fully understood n't fully understood what the backstory of this decision really is. I think, as I said, for the last 18 months we've been in this period of maybe no new implementation, and that really has fundamentally different challenges for the ecosystem and also for the role of ecosystem steward than the Ethereum Foundation has historically. So you've seen a lot of changes in the Ethereum Foundation over the last year, um, in different directions.
And as of this year, as of the last few months, the Ethereum Foundation has made a decision about how it wants to approach this period and what role it wants to play in it. And this is essentially a doubling of Ethereum's approach, Ethereum's approach to work. And this, in particular, instead of bringing everything back to one entity that owns the ecosystem, is actually about embracing decentralization and creating multiple ecosystem stewards, multiple nodes, that can help bring Ethereum together into this future. And so, maybe over the next few weeks and months, you'll hear continuations, you know, changes, announcements, all sorts of things like that. Keep this in mind as a prism that Ethereum is truly getting ready, and not just lagging behind reality, like, "Oh, we're in the implementation era now ."
The point is that no, no, the implementation is already here; let's set up the Ethereum ecosystem so that it can truly win in this new time period. Um, and where does that leave the Ethereum Foundation that leave the Ethereum Foundation ? Well, I mean, of course, that it will always be the most important node in this multi-node ecosystem and will always be the guardian of Ethereum's values. And I would like to, maybe my last full slides before the conclusion, um, focus on talking a little bit about the values of Ethereum, because I think that's sometimes a little bit misunderstood. I've heard something like...
a like... a characterization of this characterization of this , maybe Ethereum is too, I don't know, too old-fashioned, too ideological too ideological , too focused on its values. And I actually think I'm here, at least, maybe I'm biased, but I'm here to tell you that it's the opposite. I really, really deeply believe that the values of Ethereum are deeply synergistic with this vision that I've been trying to describe to you, um, for the last 10 minutes. Hmm, and what do I mean by that?
I...I chose two really important values that I would like to talk about briefly because I think they illustrate this point very well. The first is security, and, um, I already talked about this a little earlier. For example, these are things like 100% things like 100% uptime through redundancy, sometimes painful redundancy, right? I...
I...moderated this whole cordf process; we have about 10 different Ethereum clients. It's not always that simple, but that's why Ethereum has this promise that no other blockchain can, in that way, ahem, deliver. And maybe we're already moving on to the third point, especially, especially in the coming years, right? I think that, um, there's almost a consensus now that the next few years are going to be, perhaps, the most challenging in the history of cybersecurity the history of cybersecurity , precisely because of this wave of AI capabilities , but the systems are not yet protected by those same capabilities.
So there will be a period during which it will feel like an arms race until we reach a new equilibrium, and Ethereum will be best positioned of all blockchains to safely navigate this period. Hmm, and then the second big, big, hmm, topic right now, hmm, not related to artificial intelligence, there are other big topics besides AI, these days, hmm, quantum, I also wanted to briefly mention that. This is another example of how Ethereum's insistence on these boring, tedious, very, very deep belief topics is also paying off. Some of you may remember, I think it was, um, a year and a half ago or so, when Justin Drake first announced the Ethereum middle chain, um, that's what it was called back then, and people were a little confused, like the focus was on post-quantum communication back then, it wasn't a big topic back then. Why is Ethereum so exciting?
Well, Ethereum is very exciting because you need these topics, often these, like, big technological shifts, they take time. And now it turns out that every other chain is struggling, like, "What's the answer to post-quantum communication?" It turns out that this is difficult; It's not that simple. Ethereum has a clear plan, Ethereum is working on this plan is working on this plan , we have a schedule, hmm, we will make it. I think there is any other chain that I am completely confident in.
I think many of them will succeed, but they will all have to struggle. Ethereum is doing it right, and I think this is what Ethereum insists on doing right over and over again. Sometimes in the short term it looks a little confusing, and then I think over time it makes sense, like why Ethereum values exactly what it wants to be the substrate, the fundamental layer of the entire blockchain, why this is really the right and only responsible approach. And then another thing I would like to mention, maybe a little less important than SEC security, is neutrality. Neutrality is a somewhat strange topic.
We also often talk about credible neutrality, which I think just doubles down on the concept. And these are things like resisting censorship, right? Resisting censorship is like security. It comes from this, from this, from this, from, you know, very cypher- you know, very cypher- punk, you know? We want to make sure that even if World War II is going on and there are there are rogue states and all the powers in the world are trying to shut me up, shut me up, I can still talk freely about Ethereum, it's, you know, kind of a wild dream.
But why is this also practically important? Well, I mean, talk to any financial institutions and ask them, "Hey, do you want to maybe put all your business flows on the blockchain?" Well, one thing they really don't want is for them to have some time-critical flow, and suddenly, for some reason, for minutes, hours, days, they can't actually interact with the system, right? And the system goes off the rails and goes wrong, and they actually have no way to intervene. This is just a bad start, right bad start, right ?
And like, there's this kind of leap of faith if you move to these, um, these, uh, on-chain these, uh, on-chain systems, where basically everything is based on rules. You can't just go, edit the database, and fix the error. You really need properties like censorship resistance, and suddenly it's not so cyberpunk anymore. Suddenly, this is actually very useful. Uh, and the other thing sounds, perhaps a little strange, strategic reliability.
What do I mean? Well, uh, it goes back to this vision again of to this vision again of no one controlling Ethereum. Well, well controlling Ethereum. Well, well , why is this also practically important? Well practically important?
Well , uh, the other day I read an article about Amazon and how it's very, very important to them, for example. They have this philosophy: never be downstream from some central point, a technological point. For example, you know, Nvidia, GPUs, they created their own Tranium stack. Uh, before that, the fall of AMD and, uh, Intel with processors, they created their own, uh, there are also. Now they are building their own satellites.
Essentially, whenever there 's a risk that they might be dependent on some central point of control that's upstream , they're essentially taking the very expensive option of creating an alternative, trying to, you know, this old principle of "commercialize your compliments." So again, a very cyberpunk value. But, like with Ethereum, I would call this an Amazon test, right? Like, for example, for a boring big tech company like Amazon, would it be convenient for them to put all their business flows, their economic flows, on a centralized platform like Ethereum, where they would essentially be vulnerable to Ethereum's behavior, right ? And the answer, if the answer is yes, if Ethereum is neutral enough for such entities to have such capabilities, and at the same time, as an individual in a country where that's suppressed, when the individual and Amazon can be confident that Ethereum can never outperform them, that Ethereum will always have the same properties, the same guarantees, Ethereum is essentially useful across the spectrum.
And so I truly believe, I deeply believe, that principled equals practical for Ethereum. And so, as a final slide to leave you. So, we are now, I think, in the decade of cryptocurrency adoption, and Ethereum's plan is pretty simple. First of all, maybe I wasn't, so I didn't focus on that here in this talk, but I continued to work on the fundamental infrastructure, like infrastructure, like post-quantum updates, others. Er, Ethereum has always been a leader in this direction.
Keep up this work. This is extremely important. But secondly, really focus on building Ethereum as this shared settlement layer with ETH as the native asset. And I actually think, you know, maybe it's me personally. I really think the best time for ETH is, uh, still ahead.
And then, the other two, the third, again , about this, in the near future, will create additional ecosystem stewards that will really help decentralize the ecosystem so that everyone can handle this future and help Ethereum succeed in this together. And the last thing is to double down, completely double down on the values that make Ethereum unique, but also double down on the efforts to leverage those values. These values are the unique potential of Ethereum. But now we also have to make sure have to make sure , and this is, for example, this example of interaction. We must ensure must ensure that the promise of these values is fulfilled everywhere and in full.
And I think if we stick to this four-step plan, you know, point-point plan, you know, point-point -point profit, I really think Ethereum is going to be in a great position. And I think not just Ethereum, but I really think it's going to really matter to the world for decades to come , whether we're in a fragmented outcome or whether Ethereum can achieve what it set out to do. So I think we're in a great position. Perfectly. Thank you very much.
Automatic transcript — names and jargon may be misspelled.
