Reading 3 min Views 3 Published Updated
Ethereum co-founder Vitalik Buterin believes that the success of Ethereum will depend on three major technical “transitions” that must occur almost simultaneously: layer 2 scaling, wallet security, and privacy-preserving features.
In a June 9 post on his personal blog, Buterin explained that the Ethereum blockchain is frankly “failing” without sufficient scaling infrastructure to make transactions cheap.
“Ethereum is failing because each transaction costs $3.75 ($82.48 if we have another bull run) and every product aimed at the mass market inevitably forgets about the chain and adopts centralized workarounds for everything. “, – he said.
The Three Transitions: https://t.co/rtewRnm2wK
— vitalik.eth (@VitalikButerin) June 9, 2023
Another point of failure, according to Buterin, has to do with wallet security in relation to wallets with smart contracts.
He explained that the switch to smart contract wallets has made it more difficult for users who want to get the same address in Ethereum and different layers 2.
Buterin said this issue applies to both the Ethereum Virtual Machine (EVM) and non-equivalent layer 2:
“Even when you can have hash equivalence, the ability to change ownership of wallets through key changes creates other non-intuitive consequences.”
In addition to wallets protecting crypto assets, Buterin explained that wallets will need to secure data in order to truly move into a zero-knowledge networked world:
“However, in the ZK world, this is no longer the case: the wallet not only protects the authentication credentials, but also stores your data.”
The last of Buterin’s three transitions – privacy – will have to come in the form of improved identity, reputation and social recovery systems.
“Without a third, Ethereum fails because having all transactions (and POAP etc) available publicly to literally anyone is too high a privacy sacrifice for many users and everyone is moving to centralized solutions that at least partly hide your data”. He said.
The co-founder of Ethereum suggested that hidden addresses could be implemented to solve this problem.
RELATED: Vitalik Buterin Reveals 3 ‘Huge’ Crypto Opportunities in 2023
Buterin said achieving all three goals would be “difficult” due to “intense coordination” between them.
He acknowledged that each of the three transitions “weakens” the one-user-one-address model, which in turn can complicate the way transactions are carried out.
“If you want to pay someone, how do you get information on how to pay them?”
“If users have many assets stored in different locations on different networks, how do they make key changes and social recovery?” he added.
Buterin concluded by emphasizing the need to create an infrastructure that will ultimately improve the user experience:
“Despite the challenges, achieving scalability, wallet security, and privacy for regular users is critical to the future of Ethereum. It is not only about technical feasibility, but also about actual accessibility for ordinary users. We need to rise up to meet this challenge.”