Vitalik Buterin - Ideas for things worth building

[Applause] [Music] and to kind of continue this trend i think we're really doubling down on being able to focus on interesting important problems so without further ado i'd like to invite metallic on stage to talk about ideas for things worth building [Applause] okay hello everyone how are you today [Applause] [Laughter] [Applause] okay [Music] okay so [Music] great thank you so today um i what i wanted to talk about is uh a bit of a and of the intersection between um some of the things that are happening in the ethereum space on a like very from a very technological point of view um so there's a lot of exciting things happening in ethereum technology with uh scaling privacy um a lot a lot of other different topics and just some ideas for what can happen on the what kinds of things i think it might make sense to start building on the application layer now we sometimes think of technology and applications as being separate but i think it's actually very important to think about them together because improvements to technology can make new kinds of applications possible right they can make applications possible by making them cheaper sometimes they can make applications possible by creating new tools by making it safer to use the ethereum blockchain which can make applications more accessible and so what what are we going to see from our technology in the next few years and what does this mean for what kinds of things it makes sense for people to really start building today um so i feel like we've at least on the internet and on the reddit and the twitter and the bankless and the youth global and all of these lovely forums talked about the merge a lot so i'm not going to talk about the merge um but i mean it will happen apparently it might even happen on mexican independence day which is yeah but so switch to pero steak great what comes after the switch to proof of stake right um so one probably the biggest thing aside from the switch to proof of stake that ethereum developers are focusing on today and really have been focusing on for a long time is scalability right so who remembers last year when it cost five dollars to send a transaction who enjoyed paying five dollars to send a transaction one person did i did not right so this is a problem right there's not enough space in the ethereum blockchain today for all of the applications that people want to make and this means that ethereum is too expensive for people and this is a problem and we have to fix the problem right so now if you look at the charts then you know sure today sending a transaction is maybe a few times cheaper than it was last year because last year was a bull market and now the bull market is kind of over uh not a bull market right now um so but you know markets are random right they can go in random directions and so we don't want to kind of rely on markets being in one place or another place for transactions to be cheap we just we want transactions to just always be cheap right and the only way to make transactions reliably cheap in the long term is to increase the amount of space um on the chain right increase the amount of space that uh transactions can use now in uh 2020 um we like i published this document called the rollup centric roadmap and at the time i think the ethereum ecosystem was really starting to move in that direction already right and the basic idea is to like split up the ethereum ecosystem into layer one and layer two where the job of layer one is to be decentralized to be safe to be open to be censorship resistance to be permissionless and to really focus on providing these things and to become more stable and even try to become simpler over time and it's the job of lawyer two protocols to add scalability on top right and that was two years ago and two years ago like roll ups were mostly test networks and ideas but fast forward to today and today there's a lot of scalability projects that are live now right so polygon is uh sponsoring this and i mean polygon in its current form right it is a side chain and so you do have to trust it but polygon is also do you know they've been doing all of this excellent work on uh zero attic zero knowledge proofs and so you know they are going to also have a gaziki roll up which is uh really amazing right now um also arbitrarium done movie continuing to move forward lots of great work optimism i i hear people from the optimism team might even be here um so you know stark like stark net zk sync just all of these projects that are just so much more mature than they were two years ago now this um scaling through roadmaps is something that has started and it's going to continue right so over here i have these two charts um this is uh so the first chart is uh roll up data space per block right so this is how much space there is and there is going to be in the ethereum blockchain for uh people for rollups to uh to use uh to put transaction data so today the amount is fairly low it's basically roll-ups have to compete with all of the other ethereum applications for space and so today i think the amount of roll-up data on chain is like maybe somewhere between 10 and 50 kilobytes maybe a few days more maybe some days or less i don't know the exact number but like it's not far from that um after the merge the next big focus of the client teams is likely to be uh what we call proto dank charting um which is also called eip4844 and this just adds a much larger amount of space for projects to uh or a much larger amount of data on chain the rollups can use to store transactions and after prototype sharding we go up to full dink shorting right and that's a typo this this is one megabyte this should be 16 megabytes right so a huge amount of space going up by a lot now in the meantime um also of some work happening kind of more quietly but still importance which is reducing the amount of space required for every transaction on the roll up right so this is just some data for an erc20 transfer so in uc20 transfer on the roll up today 180 bytes um a few months ago optimism added like this basic form of compression that we call zero byte compression knocks it down to one fit it's about 150. um signature aggregation you can knock it down to 128 um you need erc 4337 for that better compression 75 and like i mean totally amazing depression 23 right so on top of all of this extra space the amount of the amount of space that every transaction needs is slowly kind of in the process of becoming and is going to become nine times cheaper so the conclusion of again of all of these things put together right is that i think we have a lot of good reasons to believe that the ethereum blockchain will be like much cheaper like more than 100 times cheaper like it will be do it like building and doing things will be more than 100 times maybe even a thousand times cheaper than it was last year so the question for people building applications right is what i think there's two questions one question is how can you help the transition and the second question is if things are going to be a hundred or a thousand times cheaper what will you be able to build that you cannot build today right so i in in some of the presentations at the hackathon i already saw i think people are already having like exactly the right kind of thoughts in that direction right so for example a lot of applications focusing on like points of sale and in-person payments and in-person in-person payments or actually something like they're probably or just payments in general right they're the earliest application of a blockchain right so who here remembers who here read the bitcoin white paper but he remembers the title of the bitcoin white paper bitcoin a peer-to-peer electronic cash system right electronic cash use it to pay people for stuff now this is something that like earlier on i think a lot of people really believed and a lot of people really tried hard to do right um so like there's like these big efforts to try to convince a lot of like stores and restaurants in one particular place to all accept bitcoin there are projects trying to like convince a lot of online merchants to accept bitcoin and i mean with ethereum i think this kind of continued at the beginning but then sometime like over the last over the next few years transaction fees just became way too high and i feel like the ecosystem kind of quietly mostly gave up on that right and i think in fairness that kind of makes sense right because if you remember in 2013 one of the biggest arguments that people used for why like you as someone in a store or like online store or physical store should accept bitcoin is the fees right paypal charges 29 cents plus 2.9 and even more if it's international credit cards charge even more and here's cryptocurrent bitcoin one cent transaction fees right so it worked in 2013 but then in 2017 instead of the transaction fee being one cent it was 50 and so it did not work anymore right but with scaling like we are looking at transaction fees going back down to one cent and you know maybe even lower so maybe it actually and no today we're not in 2013 today we're in 2022 and the the size of the ethereum community the size of the crypto space um also you know bitcoin people doing i think uh some similar work with uh with the lightning network as well um the size of the space the amount of developers that are there to that that can actually like build really good and user-friendly solutions you can there's just so much more right so it i think it actually makes sense to try to like do try to do in person payments and online payments again um so that's just one example right but the the question that you should ask is like what other applications are not possible today or are not possible in 2021 but they are possible in a world where uh transactions are a hundred times cheaper so that's one thing that we can build that as a developer you can look at right the other thing you can look at as a developer is how might you participate in this transition right so in um here if you look at the chart closely like there's a couple of these very specific technologies that i mentioned right so erc4337 um i'll i'll talk about it a bit later but it's a basic uh account abstraction it's this uh kind of pro standard on top of ethereum that gives wallet designers a lot more freedom to choose like basically how well let's do their authentication so you don't have to have one key you can have multiple keys you can have different signature algorithms you can have recovery you can do a lot of things and one of the nice things that you can do with it is a signature aggregation right so you can take a large number of signatures combine them into one signature and you just save a huge amount of data right um so this is something that can like make a big difference but it's something that people have to actually do um and this so it's and it's something that people have to implement while it's for there are already a couple of teams um trying to build wallets that support erc 4337 but you can build more right and you can join those teams um and you know you can build your own it's um i think an area where just there's still a lot more room for people to participate better compression for roll-ups right so like what's the difference between like where we are now 154 bytes and and going down to 75 and even going down to 23. like if you're part of a roll-up team or you know he wants to contribute to a rollup this is one of those um things that actually could be very valuable to contribute um software for nodes in a world that has some of these scalability upgrades right so when in the ethereum blockchain has a lot more data when it becomes more stale scalable you users are going to need to have like better software for being able to access and process all of this data and this will not be something that the blockchain the ethereum node will be able to do by itself right so like this extra software has to be built and someone there are a lot of good projects that are building it but this is also some a place where there could be more right so this is uh the first category of um i think what how to think about what you can build right the scaling transition is happening and will and will continue to happen how can you help the transition and once we have the transition what kinds of things that you cannot cannot build today will you be able to build a couple of years in the future those are the things that it makes sense to start building today um zero knowledge proves so zero knowledge proofs are this uh very powerful technology that has become very big in the ethereum ecosystem over the last five years right basically it's a way to cryptographically prove that like some statement about some piece of data is correct without revealing the information about like why that statement is true so you can say like for example that i have an ethereum address and that ethereum address has a valid proof of humanity profile but you don't have to reveal which proof of humanity profile you have right so you can kind of like you can get have applications that increase security by kind of adding these uh guarantees into the application but at the same time preserve privacy now privacy is actually only one use case of zika starks right the other use case of zk snarks that somehow the exact same technology gives us is scalability and uh for scalability zika snarks are already being used in zika roll-ups today right so polygon polygon hermes and zk roll up yay um come on clap for the sponsor they're here okay um the right now they're not the only one right so zeke sync doing amazing work uh scroll doing amazing work the ethereum foundations team with barry whitehead also i'm doing amazing works dark net with cairo also doing amazing work but so a lot of work that's happening on zka for scalability and zk for privacy now in from the point of view of an application developer right so my perspective on this is that the zk for snarks for scalability stuff that's like mostly protocol level and mostly infrastructure level right so it will happen in zika roll ups and you don't actually needs to worry too much about it um but it just will make everything that you do more secure and cheaper zika snarks for privacy are a bit different right because like as an application designer you have to think about your application's privacy um situation right the privacy needs of every application are different and there isn't like a way to magically provide privacy for everything right like there is that there are some pretty like fundamental technical reasons why you can't so like basically you can't hide all the data from everyone because in order to make a transaction with the data you have to have the data right that's like the the easiest way to think about it and so for every application you have this question of like well who is going to have the data and how are you going to use these proofs and like who has the right to make what changes to the to the data you know how are you encrypting things how are you hashing things and all of this now some interesting examples of this um privacy preserving proof of humanity is like a very simple one right and some like if you want to create an application like one very um simple example of this might be that like let's say you want uh people to be able to like sign like you want to be um you have some um some conference and you want people to be able to like sign up and buy tickets for a con to that conference but you wants to limit your ticket purchases to one per person right so but at the same time you also don't want to like reveal everyone's information publicly on chain how do you do all of those things at the same time well you can you you can make a zero knowledge proof that says in order to buy a ticket you have to provide a proof and that proof proves that you have a proof of humanity profile and at the same time it reveals this kind of extra secret called a nullifier and if you make two proofs with the same profile they're going to have the same nullifier right and so if you just the nullifier by itself does not reveal anything but it still stops you from using the same profile more than once so this is something i mean i i actually have a post on my blog i wrote i wrote this a couple of months about like some very specific ways about how you use this technology but it is powerful right and if you're building an application you probably do have privacy needs and it's important to think about those privacy needs and ziki snarks are just a very powerful technology for dealing with privacy issues um sometimes there are there are privacy solutions that are kind of simpler and you don't need zika snarks um so um one thing that i mentioned publicly about a week ago is a stealth addresses right so if you want to send someone an nft and they have a public address like you don't have to send it to their public address directly you can generate a stealth address and you can generate an address that they control but nobody aside from them knows that they control that address um and so like this is it's a little bit more low-tech but it's also another way to like just not leak a little bit less information out to the public so everyone can see um so privacy um another really important um category of applications is the ethereum identity ecosystem and this is actually one of my answers to the question of uh like what can you build when ethereum is cheaper that you cannot be that you cannot build one if your aim is expensive right so i think like i i've become convinced that like aside from money and financial applications things to do with identity are probably the second biggest category of applications on ethereum right and uh i think the reason for this is uh is pretty clear right because uh ethereum and like blockchains by themselves in order to interact with them at all you need to already have an identity right so who here has a uh an ethereum wallet okay who here has a pgp key see not that many people right so this is like one this is one of these kind of double-edged swords of of blockchains and crypto right so back in the 1990s there were like a lot of people that had these like very idealistic ideas right that we have encryption now and we can protect privacy and we can communicate with each other and we don't need to have corporations and governments like snoop on everything now so the but and then they created all of this like amazing software and everyone could generate their own key anyone could send messages encrypted so other people's keys but it just never really went very far right like this is a group of developers but if i ask this at a non-technical ethereum conference i feel you know there would still be a lot of people raising hands for an ethereum wallet but probably almost no one raising their hands for a pgp key right why well pgp keys they're like a very difficult network effect to start right you have one application and no one else is using the application and so you're only really going to use it if your friends are using it already and it's just very difficult to get off the ground now you know you could of course argue like hey you know we believe in freedom we believe in privacy we believe you know we believe in like these wonderful ideologies um and like try to kind of convince people that way but in you know it didn't go very far now instead we have watch ins right and with blockchains we have money and we have incentives and we have um you know people wanting to trade like three million dollar monkeys and you know these now of you know there are big downsides to these but like one of the upsides is that people definitely have incentives right and so it just created it did create this incentive for even like very normal people like just uh people who are not interested like you know don't aren't kind of like very deeply involved like interested in kind of ideology and like freedom and privacy are just more like regular people that just um you know wants to save money um not lose their money to um you know hyperinflation uh be able to send money internationally just like do very simple things and um or you know just to like do the like do these things they have you know you have to create a wallet and once you have that wallet you can use that wallet for so many other things right so one of my dreams here is that we can kind of use this this as a path to improving how identity works on the internet in general right so like one of the problems with identity on the internet as it exists today is that it it's like very centralized right like you you sign in with google sign in with facebook and sign in with twitter and you just have like one company that controls your account they see everything that you do they can they can control everything that you do now and you don't actually get that much in exchange right so like one argument that people sometimes make is that like oh it's good that if that a company controls your account because well if you like if you accidentally screw up you accidentally lose your key you can call customer service and the company will help you get you get your accounts back this is actually often not true right like in reality like i've talked to lots of people who have lost their accounts and it's actually very hard to get your accounts back um so what if instead we could use ethereum accounts and we can use ethereum accounts to log into services so and even log into centralized web 2 services so instead of sign in with google we have signed in with ethereum so this is something that the ethereum foundation actually started like you know pushing uh kind of pretty hard last year again you know gave a grants to spruce um and a lot of other people in the ethereum ecosystem are really kind of pushing on this and there's more and more applications that are starting to just let you sign in with an ethereum account and you know especially if you wants to target like people you know the ethereum ecosystem and the cr the the crypto community it's very convenient now how do you recover your accounts right let's say you have an ethereum account and either your account gets stolen or you lose your account today we're not very good at this right now there are backups and there are seed phrases and all of these things but you know what happens if your account gets stolen right it does it doesn't really help um and sometimes um you know people are careless with their backups sometimes like really you know really bad things still happen sometimes people are lazy so one of the ideas that i've been like a big fan of for a long time is this idea of social recovery well that's right basically the idea is that like you as a user would choose some number of uh recovery contacts this could be institutions it could be family it could be friends it could you know you you choose who they are um some it could even be other wallets that you control um and if you choose some number of them then like let's say for example you choose seven recovery contacts you might need four of them or you might want five of them to be able to recover your accounts if you lose your account right now it's a it's actually you can even make it privacy preserving like you can make it so that you don't reveal to the chain who your recovery contacts are um and your recovery contacts don't even have to know who each other are right so it's like actually pretty pretty strong against collusion um so this could be done and it can it could work quite well um but in order to do this you have to have an account that is a smart contract wallet right so like you can't use a regular account you have to use a smart contract wallet now how can we make it easy to use a smart contract wallet to access your funds well erc 4337 right this is a kind of protocol that sits on top of ethereum that's designed to make it really easy to do this so what do we have now right you have you're in ethereum account which is an account and that is like an identity um if he wants to recover your account you can make it be a smart contract wallet um if he wants to use your account you can sign in with it um now if you have generally in the centralized world you have a username right and in ethereum we have a username we have ens um you can prove things about your account right so you can prove that like if you wants to prove that you are like some actual real accounts and that you're not a spammer there's a lot of things that you can prove you can prove that your account just sent at least one transaction on ethereum um you can prove that you have like some proof of humanity profile you can prove that you have a pope you can prove that you have like some minimum balance you can prove that you participated in some event you can even zero knowledge prove all of these things right so between all of these different applications together i actually think that look we have a pretty powerful identity layer already on ethereum and all that we really need to do is just build better versions of all of these different pieces on the stack and like start getting them to talk to each other more and like really start connecting things together much more and this is also something that i think as a builder um you can absolutely participate in right so that's uh a few you know a few a few examples of things that you can build there's lots of other things that i think are important so public goods funding is um important and uh you know i think there's a lot of good ideas around like making better quadratic funding applications um better ways to do credit assignments to like figure out exactly like all of the different participants that are responsible for making some public good happen so not just the person who claims credit at the end but kind of the entire tree that led up to them um there are better ways to to do governance for dao's um also important um better kind of meta applications like applications that other applications can talk to right so i think there's this big long list of things that are worth making but i also think that you know it's another thing that's important to realize here right is that like the technology is making it easier to build these things in a way that was not true two years ago right like two years ago we did not have scalability and you cannot you could not practically do any of this um two years ago zero knowledge proof technology was just not as good it was much you know it was much more difficult to use and so two years ago it was just much more difficult to build anything privacy preserving um two years ago we did not have like many parts of this stack and when you only have like one part of the stack it's very difficult to do other things but when you have like some version of all parts of the stack that it becomes much easier to build even better versions of any part of the stack right so technology is improving and i think it's possible for you know any of you to help participate in making the this effort of making the technology better and more secure and you know more reliable cheaper and more accessible but also really start thinking about well what kinds of new applications will all of this and new technology make possible [Applause]