Vitalik at EDCON Montenegro: Opportunities and Challenges for Ethereum

At this year’s EDCON in Montenegro, Vitalik gave his usual keynote speech, outlining his thoughts on the blockchain industry and the development of Ethereum.

Although the content of this speech lacked very innovative narratives, we are still able to capture some subtle changes from Vitalik’s point of view.

Our editor also attended the conference, and we will briefly summarize and summarize Vitalik’s keynote speech to help you understand the latest developments and directions of Ethereum.

01, Ethereum’s status quo

Vitalik believes that although cryptocurrencies are more popular than a few years ago, users still do not use Ethereum well, but rely more on centralized exchanges.

Although centralized exchanges have zero fees, fast speed, recoverable accounts and other advantages, the FTX incident proves that centralized exchanges are not reliable.

Blockchain still needs to solve many problems before it can be widely used, including privacy, consensus algorithm security, smart contract security, and scalability.

At present, Ethereum has solved the problem of consensus algorithm security, and privacy, scalability, and smart contract security are still the future development direction.

02, problems and development direction

2.1 Scalability

Vitalik believes that the reason why users prefer to use centralized exchanges is because Ethereum’s scalability is insufficient, which leads to poor user experience of dApps.

However, at present, many plans are working hard to solve the problem of scalability, especially some rollup plans, which have made substantial progress.

In an article in November 22, Vitalik proposed milestones for rollups taking off the training wheels, measuring the maturity of rollups based on the dependence of rollups on the training wheels (such as trusted centralized entities providing trust or help for rollups maintenance), and dividing the development stages of rollups into three stages: stage 0 (full training wheels), stage 1 (limited training wheels), and stage 2 (no training wheels).

Currently, Polygon has entered stage 1, or the “limited training wheels” stage, while Optimism, Arbitrum, Scroll, Taiko, and zkSync are following closely behind and are very close to stage 1.

(Milestones for rollups:

In addition to the development of rollups themselves, Ethereum itself is constantly improving. For example, EIP-4844 will continue to bring huge storage space to Ethereum and further improve Ethereum’s scalability.

In the future, after sharding is added to rollups, Ethereum’s TPS can increase from 16 to 2w-10w transactions. There is also scaling of ENS, which can unify user accounts on different rollups, providing users with a better experience, and more.

2.2 Privacy

Privacy is still one of the biggest challenges facing Ethereum. In addition to regular token transactions, users’ ENS, POAPs, NFTs, and SBT are all publicly visible on the blockchain, with no privacy. Privacy is one of the basic human rights.

While advocating for the protection of ordinary users’ privacy, Vitalik also proposed the Proof of Innocence solution to prevent privacy from being abused in the hands of hackers and other bad actors, ultimately realizing the vision of “Privacy for the weak, transBlockingrency for the powerful”.

For ordinary users, Vitalik proposes to use a stealth address solution to protect user privacy, that is, the two parties generate a temporary address before the transaction to obtain privacy.

Compared to the Tornado Cash solution, the stealth address can not only trade ERC-20 tokens but also be used to trade other types of assets, achieving privacy in asset transactions such as NFTs.

To prevent privacy from being abused by hackers and other bad actors for capital transfer and money laundering, Vitalik proposes the Proof of Innocence solution based on zk-SNARK to improve Tornado Cash.

In this solution, the risk addresses are first aggregated to generate a merkle tree and published to IPFS. Before each user can conduct a transaction on Tornado Cash, they need to generate a Proof of Innocence to prove that they are not among the risk addresses. After verification, Tornado Cash completes the transaction, allowing users to prove their innocence without revealing their privacy, thus realizing the reasonable use of privacy.

2.3 Account Security

After the security issues of the consensus algorithm were initially resolved, corresponding solutions were also proposed for the security issues of smart contracts, such as formal verification and the Viper language. Therefore, Vitalik believes that the importance of account security has surpassed that of smart contract security.

For account security, Vitalik still advocates for multi-signature and social recovery solutions. In addition, Vitalik also mentioned the use of zk-SNARK in social recovery, which is to hide relevant data of social recovery with zk-SNARK and use proofs based on zk-SNARK for identity verification to recover accounts.

The significance of this solution is to make the identity verification process of social recovery no longer depend on a specific third party, but instead allow smart contracts or any entity that masters open source verification algorithms to have the ability to verify the ownership of users’ accounts, thus further enhancing the decentralization of social recovery and bringing a more secure account system to Ethereum.

03, Potential of zk-SNARK Technology

The most well-known application of zk is the scalability of zk-rollup, but zk can actually be used in a wider range of scenarios.

Compared with STARK, which has a large proof size, zk-SNARK will be more likely to be widely used in privacy, self-proving, and other related scenarios due to its simplicity and better compatibility with Ethereum, such as centralized entity accountability tracing, voting, reputation proof, optimizing MPC interaction modes, etc.

In Vitalik’s view, zk-SNARK, as a technology, will have an equally important position with blockchain technology in the next decade.

04, Summary

According to Vitalik’s speech, Ethereum’s roadmap has not undergone significant changes, and most of the content has been discussed in corresponding articles before. Vitalik himself also feels that the ppt he used is very similar to the one he used in his speech in Taiwan in 2017.

But we can also see that among the same content, Vitalik’s attention has shifted slightly, such as the focus on scroll, Taiko, and other solutions, the importance of account security has surpassed that of smart contract security, and the status of zk-SNARK has been elevated to be on par with blockchain, and so on.

At the end of the speech, Vitalik proposed that with the advancement of blockchain technology in areas such as scalability and privacy, services provided by fully decentralized technologies can be expected to be superior to centralized systems in the future. Therefore, as more specific application scenarios are proposed, corresponding projects will also appear in the market, which is the continuous development process of Ethereum.


[ 01 ] Proposed milestones for rollups taking off training wheels

[ 02 ] An incomplete guide to stealth addresses

[ 03 ] Why we need wide adoption of social recovery wallets

[ 04 ] Some ways to use ZK-SNARKs for privacy

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