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Vitalik Buterin was co-founder of Ethereum in 2015 at the age of 21. John Phillips / Getty Images for TechCrunch
Bitcoin and blockchain are two of the most interesting order words of the technology this year. (Guess what is the number 1 question of Americans on Google in 2018?) For most people, the blockchain refers to Bitcoin in the same way that banks refer to dollars, which explains why the recent arrest of Bitcoin and similar cryptocurrencies have pushed many blockchain believers out of space.
But the inventor of Ethereum, the third largest cryptocurrency after Bitcoin and XRP, Vitalik Buterin, does not believe that losing confidence in blockchain due to cryptocurrencies is a smart move. This week, the 24-year-old entrepreneur tweeted to explain why he thinks the blockchain is here to stay and what it is really necessary to know about this technology.
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Vitalik began the discussion by addressing the most urgent issue concerning many blockchain believers, including Bitcoin miners: the cost of confirming a transaction on the network. Vitalik has argued that the current high cost computational system management will decrease significantly as more people use it. "As the blockchain scalability improves and improves, UX (user experience) improves and rates decrease accordingly," he wrote. "This will become an ever greater part of the story".
He then underlined a common misunderstanding about the blockchain when it comes to its non-financial applications: Blockchain is just an extension of the cryptographic technology we already use in everyday communications, such as electronic signatures on digital files.
But blockchain is actually much more powerful than the encryption technology that exists in protecting digital transactions due to a revolutionary function.
"A little appreciated way to view blockchain is like an" extension of cryptography that does different things. "Encryption allows you to encrypt data, show that data has been signed by someone, etc. Blockchain, on the other hand , allows you to prove that a given was not published, "explained Vitalik.
A recent example that mentioned is an app that can check if a digitally signed university degree has been revoked or not. "A degree is certified only with a digital signature, but revocations are put in place [a blockchain]. With the cryptography alone it is not possible to check that the revocation is not * signed; but with a blockchain [you can], "he wrote.
Vitalik has continued to propose some more similar use cases, including verification of the integrity of bids during an auction and the verification of revocations in "self-sufficient identity" systems.
The main point is that people should look at the blockchain beyond its applications in digital currencies and should not be discouraged by the dramatic changes in the dollar value of cryptocurrencies. As Vitalik co-founder Joseph Lubin recently stated in Observer, today's blockchain is a bit like the Internet in the 90s; there was a lot of "boom and bust" early on, but eventually technology evolved into an inseparable company infrastructure.
"Computers have become a trillion times less expensive per computing unit in the last 70 years, human labor has been two to ten times more expensive, so sustaining high technical costs to reduce social costs is sometimes a great deal ", Vitalik concluded. "Non-financial applications have an advantage over financial ones in an important sense: there is less at stake if they break, so there are fewer reasons to worry about having them quickly enough so they could be the first widely distributed applications, especially in institutional contexts ".
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