Home / Coin Payment / Multimillionaire 25-year-old crypto king Vitalik Buterin speaks to the Star about the future of Ethereum

Multimillionaire 25-year-old crypto king Vitalik Buterin speaks to the Star about the future of Ethereum

Vitalik Buterin, the 25-year-old co-founder of bitcoin rival Ethereum, is something of a pioneer in the cryptocurrency world. Fortune Magazine ranked the "skinny visionary" 22nd on its latest "40 Under 40" list.

In 2014, Buterin was awarded $ 100,000 Peter Thiel Fellowship for his work in developing the Ethereum platform and associated digital currency that lets developers create decentralized blockchain applications.

Born in Moscow and raised in Toronto, the researcher, programmer and writer currently has an estimated net worth somewhere between $ 50 million and $ 150 million, with most of his wealth in the form of Ether.

He spoke during the Blockchain Futurist Conference at the Ports last week and talked to the Star about the cryptocurrency journey.

Does the industry need a better job than explaining risks and potential public benefits?

Vitalik Buterin: One of the big things that needs to be communicated is the fact that five years ago the blockchain was just about bitcoin, but now it's much bigger than just bitcoin. It's split off into separate spaces that have a lot of different visions.

For bitcoin, the idea is that you have decentralized cryptocurrency running on the block and protected by corporate and state control that you're going to deflate on you and not be going to get confiscated. The blockchain is just a tool to make that specific thing possible.

That’s the bitcoin side. For Ethereum what we care about taking blockchain technology behind bitcoin that makes decentralized cryptocurrency possible and making it more general purpose that other things can be decentralized in the same way.

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What other things?

VB: One of the earliest examples of decentralized things happening on Ethereum that is not a currency is DMS, which is a decentralized alternative to the domain name system – basically decentralizing the URL [web address] phone book.

Another example is this project called OpenCerts. They are the ones who have to be able to verify someone's certificate if they want to verify someone's certificate.

A third example is the DAO [decentralized autonomous organization, a form of a smart contract where the bylaws of an the decentralized organization are embedded into code, bitcoin and Ethereum]. The idea is that you are dealing with the different types of organizations' application systems.

Another important space is enterprise watching. The idea says let's use special purpose blockchain versions – sometimes called private blockchains – that are only half decentralized. You might have smaller industry consortiums that allow different companies to work together and interoperate on a more open playing field.

It’s less radical than let's replace everything and more, but it’s the kind of fish that gets institutions on board more easily.

Is that the path of least resistance?

VB: It depends. Historically there have been times when both paths have been successful. I go and talk to companies and governments.

What institutions?

VB: Microsoft would be an example. In some cases, banks. I am not aware of Canadian banks that are doing active applications on blockchains. I know that historically RBC has had some interest.

What is the role of government? Is there a place for regulation?

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VB: Governments have a role and one of the roles is regulation. The usual concerns are about cryptocurrency exchanges where the basic idea is to do fundraising for a new project by directly selling tokens on the blockchains. There are debates whether specific kinds of ICOs [initial coin offerings] are legally categorized as securities.

So the regulators are grappling with the issue.

VB: The regulators are definitely grappling. They are undecided in many ways. The other area is governments as users of the technology. There has been an exploration of central banks issuing digital currencies and using blockchains for different kinds of government records.

What are the roadblocks to more widespread adoption of cryptocurrencies?

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VB: Scalability is a big bottleneck because the Ethereum blockchain is almost full. If you are a bigger organization, the calculus is that if we join, it will be more than full competition. It's already expensive and it will be even five times more expensive because of us. There is pressure to keep people from joining, but improvements in scalability can do a lot in improving that.

How do you improve scalability?

VB: Every computer has to verify every transaction. If we can move to networks where every computer verifies only a small portion of transactions then it can be done better.

Can that be done without sacrificing security?

VB: There would be a sacrifice but it would be fairly modest.

Would scalability bring costs down?

VB: By a lot – by a factor of over 100 for every transaction.

Would that be enough to trigger mainstream adoption?

VB: Scaleability is not the only problem. There are still challenges with usability, with security account and with privacy that are improving. It is also a technical point of view, but the tech is there – how do you turn it into something people will use?

Are the risks being reduced?

VB: There has been a lot of work in tracking. Instead of having a wallet which you hold in a cryptocurrency app with the app being controlled by one computer key – which is risky – you have a smart phone using multiple complicated mechanisms, using multiple keys so a lot of things would have to be hacked at the same time for you to lose your account. There is a fear that the price will drop to zero, but that’s not a technical issue. I believe people will gain confidence over time.

The main thing that is driving a lot of people to be spooked about the block is not cybercurrency and it would be better for the space if [price] peaks and drops were milder. It’s not something we can control.

It is important to remember that there are ways to use and benefit from the block that we don't expose you to those risks. If, for example, you are trying to identify certifications, you need only enough cryptocurrency to pay transaction fees – basically a couple of dollars.

Michael Lewis is a Toronto-based reporter covering business. Follow him on Twitter: @MLewisStar

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