Vitalik Buterin, co-founder of Ethereum, believes that Ethereum’s success will result from three major technology “transitions” that need to happen almost simultaneously – Layer 2 scaling, wallet security, and privacy-preserving features.
On June 9 via his personal blog, Buterin to explain That the Ethereum blockchain “failed” without enough scaling infrastructure to make transactions cheap.
“Ethereum fails because each transaction costs $3.75 ($82.48 if we have another upside), and every product aimed at the mass market inevitably forgets the chain and adopts a centralized solution for everything,” he said.
The Three Transformations:https://t.co/rtewRnm2wK
– Vitalik.eth (@VitalikButerin) June 9, 2023
Another point of failure, according to Buterin, is related to smart contract wallets.
He explained that the move to smart contract wallets has caused some issues, due to the complexities on the user experience side of things when users control multiple addresses simultaneously.
In addition to wallets that secure crypto assets, Buterin explained that wallets will need to secure data in order to truly transition to a on-chain world with zero knowledge accumulation:
However, in the ZK world, this is no longer true: the wallet not only protects your authentication credentials, but also holds your data.
The last of Buterin’s three transformations – privacy – must come in the form of improving identity, reputation and social recovery systems.
“Without the third option, Ethereum fails because making all transactions (and POAPs, etc.) public to literally anyone who sees it is too much of a sacrifice of privacy for many users, and everyone else moves on to centralized solutions that at least hide your data to some degree,” he said.
The co-founder of Ethereum suggested that stealth addresses could be implemented to solve this problem.
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Buterin said it would be a “challenge” to investigate the three due to their “intensive coordination”.
He acknowledged that each of the three shifts “weakens” the “one user – one address” model, which in turn may complicate the way transactions are executed.
“If you want to pay someone, how are you going to get information about how they are being paid?”
He added, “If users have many assets stored in different places across different chains, how do they make major changes and social recovery?”
Buterin concluded by emphasizing the need to build an infrastructure that ultimately improves user experience:
“Despite the challenges, achieving scalability, wallet security and privacy for everyday users is critical to the future of Ethereum. It’s not just about technical feasibility but about physical accessibility for everyday users. We need to rise to this challenge.”
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