Ethereum co-founder Vitalik Buterin said the original visions of Web3 have “faded somewhat into the background” with many projects shifting away from the core idea of decentralization.
In a blog post titled “Make Ethereum Cypherpunk Again” published today, Buterin wrote that there is a large ideological rift “where significant parts of the non-blockchain decentralization community see the crypto world as a distraction, and not as a kindred spirit and a powerful ally.”
He noted that the term Web3 was originally coined by Ethereum cofounder Gavin Wood. “Rather than seeing it, as I initially did, as ‘Bitcoin plus smart contracts,’ Gavin thought about it more broadly as one of a set of technologies that could together form the base layer of a more open internet stack.”
Buterin said that people use cryptocurrency to send and save money in many countries, but they often do this through centralized means, “either through internal transfers on centralized exchange accounts or by trading USDT on Tron.”
Rise in transaction fees
Buterin pointed out that the “number one culprit” he would blame as the root cause of the shift is the rise in transaction fees.
“When the cost of writing to the chain is $0.001, or even $0.1, you could imagine people making all kinds of applications that use blockchains in various ways, including non-financial ways,” he wrote.
But when transaction fees go to over $100, “degen gamblers” would remain willing or become even more willing to play, he added.
When degen gamblers — often considered high-risk traders — become the largest group using the chain on a large scale, “this adjusts the public perception and the crypto space’s internal culture,” he said.
Positive developments
While Buterin pointed out the existing issues in the community, he also outlined the positive developments within Ethereum in 2023. He wrote that advancements in scaling solutions like rollups, second-generation privacy solutions, and the emergence of account abstraction and light clients could offer hope for a revival of the decentralized ethos.
Buterin said that there is a growing awareness that unchecked centralization and over-financialization cannot be what crypto is about. Such increasing realization and the key technologies mentioned above “together present us with an opportunity to take things in a different direction,” Buterin wrote.
Zero-knowledge proofs
Zero-knowledge proofs and their increasing developer-friendliness open new possibilities for consumer applications and privacy-preserving technologies, according to Buterin.
Buterin envisions a future where Ethereum becomes a hub for a range of applications — from decentralized social media to secure, anonymous voting systems.
“These technologies are most widely adopted as ways of improving Ethereum’s scalability, as ZK rollups, but they are also very useful for privacy,” he continued.
“In particular, the programmability of zero-knowledge proofs means that we can get past the false binary of ‘anonymous but risky’ vs ‘KYC’d therefore safe,’ and get privacy and many kinds of authentication and verification at the same time,” he added.
Reiterating core values
Buterin also urged the Ethereum community to follow the core values — open global participation, decentralization, censorship resistance, auditability, credible neutrality, cooperative mindset and tool building.
“It is very possible to build things within the crypto ecosystem that do not follow these values,” he said. “One can build a system that one calls a ‘layer 2,’ but which is actually a highly centralized system secured by a multisig, with no plans to ever switch to something more secure.”
“Resisting these pressures is hard, but if we do not do so, then we risk losing the unique value of the crypto ecosystem, and recreating a clone of the existing web2 ecosystem with extra inefficiencies and extra steps,” he added.
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