Bitpush Exclusive Interview with Vitalik Buterin: From Ethereum 2.0 to Eternal Life
While the rollout of ETH 2.0 has taken longer than expected, Ethereum founder Vitalik Buterin is excited by the progress so far. He expressed confidence that decentralized finance will contribute to the next bull market, but added that the frenzy surrounding the space isn’t without its problems.
In an exclusive one hour interview with BitpushNews, Vitalik referred to blockchain as an evolutionary force in today’s society. While the internet completely revolutionized the way the world functioned, Buterin believes that blockchain will build upon existing structures and improve upon them.
Blockchain enables individuals to trust the system rather than a centralized authority like a bank, which has the potential to change the way society functions. He concludes that interpreting perceptions and separating fact from fiction is difficult, even with the help of blockchain.
He agreed that the rise of DeFi could spur the next great bull market in crypto history, but cautioned about buying into the most popular DeFi applications. Citing, yield-farming — which takes your asset lending and then gives you high interest rates — Buterin said that high interest rates are not sustainable.
Moving on, Buterin spoke on crypto tokens’ intrinsic value and shared his thoughts on Silicon Valley’s role in the next tech revolution.
The 26-year-old entrepreneur is on the hunt for eternal life and is adamant that technology can add a lot to humanity even as the world faces a challenge as daunting as the coronavirus pandemic.
Evolution, Not Revolution
BitpushNews: From a technology point of view, the internet completely changed this planet in every aspect of human life. You once said everything you can do with blockchain, you can already do with the internet if you can find people you trust, so from the internet to blockchain the value added is trust, it’s an evolutionary, not a revolutionary change, right?
Vitalik Buterin: I definitely think it’s an evolution, and will be combined with existing things. The blockchain can add trust. They can let people cooperate in groups that are larger, more international than before, and don’t have to go through intermediaries. A lot of things blockchain can do, for example, decentralized organization. If five people say: ‘hey, we are going to create this organization, and manage some resources, and here is the contract, those are the rules’. That is something that you cannot do with the internet, but can do with blockchain.
BitpushNews: I do agree with you that trust is the most needed commodity in the current world. You once said it is a potentially new frontier for information warfare, but here it comes, we already have it. With social media and big money behind it, it’s more difficult than ever to find the truth from lies, perception from reality. Twitter tries to do some fact-checking. Facebook is under pressure to do the same, so how do you understand it? How could blockchain do something?
Vitalik Buterin: The challenge with blockchain is that the blockchain technology by itself doesn’t solve all problems. Blockchain doesn’t really know what happens to the real world because blockchain is just math. I think what blockchain can do is use its smart contract to create structures, create incentives for people trying to do these things. Although figuring out the truth, understanding what will happen is still something that requires human impact, but that human input has to be combined together with some mechanism. I think in some cases, blockchain can provide that. Like the prediction market, within some protocol running on blockchain, it’s one example that you can get more reliability and more accuracy than from a centralized system.
BitpushNews: Do you think information warfare is a problem?
Vitalik Buterin: People’s minds are basically the next major frontier of battle. Before we have land, water, air, but if we find a battle inside people’s minds, you don’t have to fill any bullets, it’s potentially much more effective. I definitely think there will be a lot of different actors, like some political movements, governments, companies, individuals, they constantly try to sell different people and different things. It’s very hard for some people to survive in this environment, one of the things we should be working on is building a better tool to help people to survive these things.
BitpushNews: How to find the truth? Do you think artificial intelligence (AI) can help?
Vitalik Buterin: That’s challenging. I think there is something that AI can do, but the problem is that AI is only as good as the data it gets and things people tell AI to optimize for. I think AI doesn’t let us escape limitations that people are creating. In general, trying to completely escape the limitations of people is very hard, the easier thing to do is try to create different structures that allow people to correct each other’s errors. There are a lot of cases where blockchain can work this way, like the market works that way. The discussion on the internet can work that way if they are working well though they don’t always, so it can happen sometimes, there is a lot we can do to make it happen more.
BitpushNews: Do you think Silicon Valley is still the center of cutting-edge technology?
Vitalik Buterin: Less and less. Silicon Valley is at the center of companies like Google, Facebook, etc. but for the cryptocurrency industry, Silicon Valley is only a small part of it. I think in the next tech revolution, Silicon Valley will only be a small part of it. A lot of ideas, culture that started in Silicon Valley can still help people be successful and will continue to survive, but those ideas and culture will separate from Silicon Valley the place. The tech revolution will happen not at one single place, but it will happen in a more distributed, decentralized way.
BitpushNews: How do you compare yourself with pioneers in Silicon Valley?
Vitalik Buterin: I feel I am different from all of those people. Silicon Valley companies are more centralized. The kinds of things you have to do to create a successful company is different for that reason. You have to have a good idea about products, be able to run the organization which contains a lot of people, you have to be a general of a good army, give people orders, quickly change strategies, all things like these. Blockchain is different, the success of blockchain depends less on the company, more on community. As to the leadership, it is also different, the leadership in blockchain is less about commanding people, more about inspiring people. It’s less about changing strategy very quickly, more about thinking more broadly, trying to understand bigger patterns, ideas that can motivate people.
BitpushNews: In other words, It is an ability to see the consensus and reach the consensus, right?
Vitalik Buterin: Exactly.
BitpushNews: You said the difference between you and Mark Zuckerberg is that you presume you could be a potential adversary to the system, what does this mean?
Vitalik Buterin: Basically I think the model behind Facebook is like this: Facebook is a company in the middle, Mark Zuckerberg controls Facebook, the system works because these people are good and he will continue doing everything to keep it good. Blockchain and Ethereum are different. Ethereum is designed as a system where to understand why it works and why it is secure. You don’t even have to trust people behind it. You just need to trust the algorithm, the code, everything is open source. you basically have to just trust the Ethereum system works. For example, the gas limit changed a few days ago, I was not involved in that decision at all. It was Ethereum miners, even with the decisions around the protocol changing, it doesn’t have much to do with myself. The system is much less dependent on myself than it was four years ago. I even like that way.
BitpushNews: Ethereum 2.0 is the focus of industry, people all over the crypto world are talking about it and looking forward to it. Are you satisfied with the progress so far?
Vitalik Buterin: The progress has been going definitely very well, especially in the last few months. We just saw Altona test network get ready. It is the first major test network that has a final version of Ethereum 2.0 POS protocol and has 4 different clients running on it. So it seems to be going very well so far, if everything goes well we will be quite close to the ETH 2.0 launching.
BitpushNews: You once said “blockchain is a weird subject between an open-source project, a corporation, a country, and a language,” so with the world of stake, is the ETH 2.0 more like a corporation?
Vitalik Buterin: One of the misconceptions people have is they see Proof of Stake as a government mechanism, a kind of voting that the stakers control the network. I don’t think that is really true. Miners or stakers keep the network running, they defend it, but they don’t actually have that much power over making decisions. The phrase I used to say is the miners or stakers are military, not government. For example, if we look at the current Ethereum miners have a little bit of control, like set the gas limit — recently they increased it from ten million to twelve million — But in general, miners are not very powerful.
BitpushNews: For ETH 2.0, has the underlying philosophy changed?
Vitalik Buterin: It depends, the philosophy behind what secures the blockchain has changed. POW (Proof of Work) and POS (Proof of Stake) have different philosophies. It’s the change that most people in the ETH community are expecting from day one. Even at the beginning of 2014 we started talking about POS and how we intend to switch to POS at some point in the future. So most people were expecting the switch from almost the beginning. POS gives you the same level of security but a higher level of efficiency.
BitpushNews: Right now as DeFi is getting more and more popular, what will DeFi bring to the world in your eyes?
Vitalik Buterin: Blockchain can make it easier for people to make payments, send money, and try to extend that to more things than just cryptocurrency. For example, the first major application that you can call DeFi would be Stablecoins, people have benefited from having a cryptocurrency in a decentralized, isolated blockchain without the cost of price being volatile.
Vitalik Buterin: I think in general, I expect most of the value in DeFi come from continuing to work on making it easy for people to do simple things, lile people should be able to save money, make investments, trade between different assets, if they want to create a company or create a smart contract on a blockchain, they can directly use some of these tools. But most of that can be done by undertaking extremely simple stuff we have in the beginning and continue to work on it.
Vitalik Buterin: The thing that I am most excited about over the next five years is not many people creating applications, but just taking the existing things and continuing to make it much better. Regular e-commerce websites could start to accept stablecoins, could even start processing refunds with Stablecoins. [I’m excited] For those things to continue to get easier and to work more efficiently, at much more scale in five years than where it is today.
BitpushNews: Will the next bull market build on DeFi’s development?
Vitalik Buterin: I don’t know, maybe. I think there are lots of things booming right now. There are definitely more and more people using blockchain in general and there are more people starting to use DeFi, more enterprises starting to build applications. So all these things are happening at the same time. If we do have a bull market, I think DeFi can contribute to it, but it’s also important to be careful about Defi applications. Some applications people are getting excited about right now — for example, the so-called yield farming which takes your asset lending then you get high interest rates. But the problem is a lot of interest rates are not sustainable. The reason why Compounds has very high-interest rates is that Compounds has promotion where they give you Compounds tokens if you lend your assets. What that basically means is right now they are paying people to use their products. In the long term they are not very sustainable.
Vitalik Buterin: In the long term, I don’t see a reason why DeFi interest rates are higher than in traditional finance. Focusing on high interest rate is not the right path. I definitely expect DeFi will become more boring, more stable and more useful in two or four years than it is today.
Vitalik Buterin: I think Stablecoins can be very valuable to poor people because they can buy assets in an open permission global system where anyone can contribute. In order to participate in holding transfer coin you just need to have a private key, so Stablecoins will be very good there.
BitpushNews: Do you think Facebook’s Libra will be able to help people around the world?
Vitalik Buterin: Libra is a challenge, the challenge of Libra is basically that they are trying to be something in the middle between decentralized system and centralized system. The problem I think is the centralized aspect of it will make people not trust it, make it difficult for it to get global adoption.
Vitalik Buterin: In general, especially in 2020 with the centralized platform, there is a lot of distrust of different companies, countries, and people distrust each other, so if you create a system that seems to people controlled by America, or controlled by China, then that will make it difficult to get adopted. I feel like Libra was kind of trying to be someone in the middle and get some more efficiency benefits being centralized, the benefits of integrating with traditional finance more closely, but at the same time not being controlled by one company, but I don’t think they were very successful at this.
BitpushNews: How will ETH 2.0 affect DeFi’s development?
Vitalik Buterin: I think it is very important for DeFi. All Ethereum applications really need feasibility, and right now a lot of people really want to use the Ethereum chain. At same time this means the transaction fee going up, and right now I think the transaction fee is too expensive, even for most DeFi use cases. So even right now we are seeing people looking at migrating to a layer-2 scale migrating sprout ups, and I definitely think ETH 2.0 will be very important at removing that pressure.
BitpushNews: Right now more and more institutional investors, big guys in Wall Street like Grayscale, Fidelity joined the crypto market, J.P. Morgan even has its own coin. Do you think we are going to see a mass adoption of blockchain and cryptocurrency in the near future or even sooner than we expected?
Vitalik Buterin: I think there is definitely a possibility we’ll see it soon, the adoption will happen sooner than people expected. I do expect the scalability needs to be solved soon. Existing institutions definitely move slowly, but general people will adopt it very quickly.
BitpushNews: But some still argue that the coin has no intrinsic value, how do you define “value” through the lens of blockchain?
Vitalik Buterin: I think the challenge with this system is that blockchain and cryptocurrency are completely virtual. The only reason why they have value is because people expect they have value. Sometimes cryptocurrencies suddenly increase or decrease price and people don’t know why. Alternatively, in the long term I think the system is valuable because it is useful to people. For example, Bitcoin is useful for people to store and transfer money. In the Ethereum case, the question is actually easier. First of all, Ether can be valuable for the same reason as Bitcoin is valubale. Second, the Ethereum blockchain is useful for a lot of different things, it’s useful for building many kinds of applications, there is a lot of value you can get from just sending transactions on the Ethereum blockchain. Right now Ethereum blockchain transaction fee is about one million dollars every two days, so if people are willing to pay this amount of money to use the Ethereum blockchain, that means they find blockchain is really valuable to them. So the asset on the blockchain definitely also benefits from the value of blockchain itself.
BitpushNews: You tweeted on Jun 12: “What we expected: cryptocurrency would normalize and become more like the stock market. What happened: the outside world went crazy and the stock market became more like cryptocurrency.” Do you think it has anything to do with value? Why do you think this happened?
Vitalik Buterin: Understanding what is valuable, how does it happen, how much vlaue something has, these are kind of very complicated information economies. It’s definitely very difficult. I think that is a big part of why people are struggling to understand how valuable different things are. But if you look outside of cryptocurrency, if you look at companies like Facebook, Twitter, Tencent, they don’t really have many valuable physcial objects. They have offices that maybe cost like ten million dollars, they have employees. However, these companies are worth billions of dollars. Do they really have this kind of value?
BitpushNews: But they provide services?
Vitalik Buterin: Yes, they do, but the question is how do you measure the service they provide. How do you measure how likely people are to move from one company to a different company two years from now. The fact of value does not correspond to anything physical. It’s about services, information and all these kinds of things. It’s all these things that cause challenges. Cryptocurrencies are completely virtual, all they do is provide services and that’s being able to use blockchain and cryptocurrency, but the rest of the economy is also moving in the same direction.
BitpushNews: Ether (ETH) price dropped a lot since the record high in 2018, sometimes it is nearly one-tenth of its record high, is this a big concern for you?
Vitalik Buterin: I think Ether price has been fine recently. It definitely dropped after the big bull market in 2018. It becomes more stable in 2019 and 2020. I don’t know if the price will go back to the record high, if there is a bull market, there will be a boom.
BitpushNews: What does Ether price mean to you? How important is the price to you?
Vitalik Buterin: I think it is important to the community, because a lot of Ethereum projects and the funding of the project, they are holding the ETH for themselves. If the price goes up it will help boost the funding. Besides, a lot of people in the ecosystem are holding ETH, so it’s definitely important to the people in the community. At the same time, I do think that the Ethereum ecosystem can survive at the price of thousand dollars or hundred dollars.
BitpushNews: As a young entrepreneur, founder of Ethereum, what is the biggest misconception about you?
Vitalik Buterin: I think a lot of people overestimate how much power I have. They think I still have a lot of control over Ethereum, that’s not true.
People see I proposed the Proof of Stake, POS happening, and they conclude I can control Ethereum. But the thing is I would not propose something if I know the community would not accept it. The fact that I am proposing something generally means that’s something I know the community wants, even if I didn’t propose it, someone else will likely to propose at some point anyway.
BitpushNews: You have been longing for eternal life since 6-years-old. In a recent tweet you wrote: “I’m predicting a shift in attention toward biotech. The “final boss”: massively extending healthy life-span and ending aging entirely.” It’s interesting, do you really believe that?
Vitalik Buterin: Yeah, I do. why not? Life is great, why shouldn’t we want to live longer?
BitpushNews: Yes, but there is a saying that ‘no death, no new life.’
Vitalik Buterin: I don’t think so. I think we can keep having new lives. I think the resource is not that limited. Every new person added to the world on one hand, they consume some resources, but on the other hand, they could be that person who creates some new invention to make resources consumed more efficiently. So in general, taken all together I think we will bring it better, if the earth gets completely out of resources, we can live in other star systems. I think humanity has a lot of spaces to expand.
BitpushNews: But do you think the COVID-19 lets you rethink the human being’s vulnerability and technology’s power?
Vitalik Buterin: I think the coronavirus made me more confident that we can solve aging. Especially in western culture, there is an idea that the most important thing human being should do is not do bad things, making sure crimes don’t happen, making sure governments don’t oppress people. What the coronavirus shows is that that’s not enough. If you just take away humans doing bad things, we still have the virus, the virus still infects, kills people. The way to prevent something like a virus from happening is not people doing less bad things, but doing more good things. We should prevent the virus by working hard to understand the diseases, research what things spread or don’t spread the virus, find what things we should do. The cure for the virus is technological progress.
Vitalik Buterin: For solving aging, it’s exactly the same situation, tech progress is good, basically, it is the only thing that can save us. That’s a lesson I think that a lot of people are kind of forgetting. In the last ten or twenty years in the U.S, a lot of science fiction writers tell people how technology is bad, tech could lead to dictators being more powerful, making people destroy each other. Sometimes that’s true, it’s important to have those lessons. But at the same time, if those lessons are the only thing people see about technology, it’s a big problem. This is a problem that China has less, in one of the biggest movies in China recently, “The wandering Earth,” we see that technology is great, it can save humanity. The coronavirus is going to bring more people including Americans back to that mindset. In the long term that’s a very good thing.
BitpushNews: You are a very optimistic person, am I right?
Vitalik Buterin: Yes, I am.
BitpushNews: The last question, help me finish this sentence: “Vitalik Buterin is founder of Ethereum, a genuis, a young rich guy and…?”
Vitalik Buterin: I hope people think about me as someone who cares about important things like intellectual, social issues, someone who likes to think about big problems, someone who works together on solving things, and continues to make math, science, and technology better.
By Susan Feng and Mary Liu