Vitalik Buterin: Q&A - An Interview with the Inventor of Ethereum
The Ethereum Foundation’s Devcon2 takes place in Shanghai, September 19-21. Expectations are high for this third edition of the developer conference. As blockchain hype reached a crescendo in 2016, Ethereum was rocked by the DAO hack, a devastating attack on a major venture-funding project built on the platform. Fallout from the subsequent hard fork of the protocol included the ETC/ETH split, along with sharp debates concerning the future of the project.
Moving on from this controversy, Devcon2 sets the stage for the next phase of development for the technology. Of particular interest will be Ethereum inventor Vitalik Buterin’s Mauve Paper, outlining sharding and proof-of-stake proposals for the scaling of the platform.
On the occasion of Devcon2, I’m publishing for the first time on Steemit a two-part interview I did with Buterin. Part one took place during the Ethereum crowd sale that financed the project in August 2014. Part two happened a year later, just after the launch of the Ethereum network. In the conversation, Buterin discusses how he developed the technology, publishing the first white paper when he was nineteen, and talks about some other things he did along the way.
Vitalik Buterin: Q&A is the first in a series published by the digital imprint Q&A.
August 2014
RK: Vitalik, you’re from Toronto, right?
VB: Well, I was born in Russia, but I moved here when I was six. So, basically.
RK: You’ve been very active in bitcoin for several years now, as an information technologist. You’ve written code libraries for developers?
VB: Yeah, basically software toolkits to help people interact with cryptocurrency technologies and build apps for them really easily.
RK: But you’re most probably well-known right now as the inventor of something called Ethereum. What is that?
VB: Well first, think about bitcoin, which has two big ideas in it. The first idea is the concept of a decentralized electronic currency, this unit of value that is not issued by a central authority, no one controls it, and anyone can obtain it through this process called mining
And then the second idea is this concept of a blockchain. The blockchain is a new sort of cryptographic instruction that was created originally in 2009 by Satoshi Nakamoto. What it does is allow a computer network to maintain consensus on something. In bitcoin’s case, it’s a consensus on account balances.
These innovations are very useful if you want to create a currency. However, bitcoin technology stays limited to this one particular function. With Ethereum, I asked the question: How do you generalize that? How do you create a blockchain architecture that people can use for any kind of application?
Basically Ethereum is a blockchain, but one that contains a built-in programming language. You can use it to write any kind of application that takes advantage of the blockchain.
RK: When did you first start forming this idea in your head?
VB: Around October 2013, I was visiting Israel where there are quite a lot of people involved in bitcoin. Two particular projects they were working on are called Mastercoin and Colored Coins. People there were also trying to generalize bitcoin to a certain extent. One of the mistakes I think they were making is that they were generalizing it, but they weren’t generalizing it enough. I was looking at a lot of their protocols and they had a lot of complexity, a huge number of features, and I was thinking “OK how do you simplify the protocol and make it more powerful, how do you generalize some of the features?” Eventually, I just sort of took the idea to its logical conclusion, and came up with something that’s pretty close to the current form of Ethereum.
RK: You wrote a white paper around that time?
VB: Yeah, the white paper I was writing somewhere between November 15th to 22nd, 2013.
RK: And that was to clarify your ideas, to communicate them to other people?
VB: Yes.
RK: What was the reaction?
VB: Initially, I emailed it to about twelve to fifteen people I knew. I expected some cryptographers to come along and tell me why my idea was impossible, because it just seems to be too good to be true in some respects. And that didn’t happen. The responses I got were very positive. Two weeks later, I sent out a second version of the white paper to about thirty people — even more positive. Then it just started getting distributed all on its own. All throughout December, I started getting emails from people saying, “this is a cool idea, can I work on it?”
RK: Were you also prototyping it? Were you writing code at the same time?
VB: Originally I just thought I would write the whole thing myself. I actually started writing it in Python. Instead of making Ethereum an independent blockchain as it is now, I first tried the simplification of building it on top of another existing chain. I was thinking I would just write a protocol that would interpret the Primecoin blockchain. Primecoin is another currency that is fairly similar to bitcoin, but it will let you stick data in the Primecoin blockchain. I got about halfway done implementing it. But at that point so many people were coming into the project I realized it was possible to be more ambitious.
RK: So now there’s a crowd funding campaign which began…
VB: Two weeks ago.
RK: And that’s to take Ethereum to the next level?
VB: Yes.
RK: Do you know how much money has been raised so far?
VB: About fifteen million.
RK: Fifteen million dollars.
VB: Yeah, 26,000 BTC.
RK: Does any of this surprise you? This was a gleam in your eye what, eight months ago?
VB: Nine months, yeah.
RK: And a bunch of strangers have sent a whole lot of money magically over the internet. If you step back and think about that…
VB: Yeah. I was definitely not expecting that anything close to this would happen at the time.
RK: And how old are you now?
VB: Twenty.
RK: OK. So the World Wide Web is actually older than you are.
VB: Yes.
RK: Do you remember your first experience with the web? With computers?
VB: I’m not sure exactly where, it could have been Russia, could have been Canada… my first experience with computers was playing with Excel.
RK: Excel is a spreadsheet.
VB: Yes.
RK: So not computer games but financial software?
VB: Yes (laughs). With the web, I’m not sure. I probably used to troll forums a lot when I was ten or so.
RK: Were you always building things?
VB: Probably, I guess. When I was ten or so I got more seriously into computers and started making video games. The first program I made was a ball bouncing around a room simulator. And I just went from there. I basically coded out my own version of Space Invaders, a bunch of other stuff, a sort of medieval fantasy tactics game…
RK: And when you were in school did they encourage it? Were there resources in school for you to do that?
VB: Not really, no. In middle school, nothing. In high school, our school was actually very heavily focused on the classics. So history, Latin and Greek. But the primary thing that school did to help me was my chemistry teacher letting me skip two thirds of the classes and go to a computer lab and program.
This was basically just a closet in the school. You have to understand, this was a really tiny private school called the Abelard School, on the fifth floor of a building on top of a Starbucks in Toronto.
RK: What kind of a kid were you in high school? Were you the class clown, were you a troublemaker, were you in a clique?
VB: I kept to myself, and did very well academically.
RK: So around this time you heard about bitcoin?
VB: It was March 2011, when I was in Grade eleven.
RK: And how did you find out about it?
VB: First time I heard about it was actually from my Dad. He told me about it. But I brushed it off, saying “this thing is worthless, it has no intrinsic value, there’s no way it will get anywhere.” Then I heard about it again about three weeks later from some podcast on the internet. At that point, I realized it might be serious and I should get into it more.
RK: Satoshi Nakamoto invented bitcoin in 2009, but it didn’t just appear out of nowhere. It stands on the shoulders of…
VB: Eleven years of development in cryptocurrency and thirty years in public key cryptography.
RK: What were some of the key steps and who were the main innovators?
VB: There are two branches to cryptocurrency. One branch is this concept of ecash that’s been around since the 1980s. Ecash is in some ways slightly better than cryptocurrency because, first of all, it’s a bit more efficient, and second, it has better privacy properties. The 1980s version of ecash uses technology called blind signing that was invented by David Chaum. This sets up a system where you can purchase tokens and you can transfer and redeem the tokens, but even the bank that’s operating the system would have no idea what the relationships are within each transaction.
RK: So it’s centralized, but there’s no…
VB: It’s centralized, but the centre is oblivious. The technology never caught hold.
The second branch, the concept of decentralized currency, dates from 1998. Wei Dai suggested this thing called B-money. It’s a currency based on the solving of mathematical puzzles that would use consensus algorithms instead of a central authority to maintain the account database. But it was just a white paper. It didn’t really describe a formal protocol. There were a lot of issues that it just washed over without specifying them properly.
Around the same time was Hashcash, the idea of “proof of work”, which was an attempt to solve the problem of email spam. And the theory is that in order to be able to send an email, you could require people to burn one cent worth of electricity, and to cryptographically prove that they spent that much computational power, and that would effectively price low-value spam out of the market. That was created by Adam Back in 1997.
Then there was something called Re-usable Proofs of Work, there was something called Bit Gold — both of which moved the project slightly closer to where it is today. By 2005, there was something called Secure Property Titles with Owner Authority. It’s just a concept — basically of using something like a blockchain in order to maintain a land registry. You had the idea, but you couldn’t implement it because you did not have a blockchain technology.
With the invention of Bitcoin, Satoshi’s insight was to take these different pieces and combine them together in a specific way so that you get this decentralized database that can bootstrap and incentivize itself and follow particular rules that everyone agrees on.
RK: You’ve also been a prolific writer about bitcoin. When did that start?
VB: Around March 2011.
RK: What was the first publication you were involved in?
VB: It was called Bitcoin Weekly. There was this guy on the internet named Kiba. He was trying to setup a bitcoin blog, and was paying people five BTC per article to write articles for him. Five BTC back then was $3.75, and I guess I was the only person with enough spare time and not enough spare internet money to participate in that. I think I calculated my average wage was about a $1.50 an hour. I wrote one article, I think it was on microtransactions; then I wrote a few others, stopped for a bit, then wrote some more. Eventually, Kiba ran out of bitcoin.
I ended up more or less saving the site for another couple of months. I invented this business model where I would write two articles a week. Then Kiba would take the first paragraph of each article and he would paste it onto a forum, and he would put a bitcoin address saying “these articles are for ransom. We are not releasing them. If the community manages to come together and send a total of five BTC to this address, then we will release the articles.” Actually, I think it was one address for each article. And it worked! At that time, it got my wage up to about five or six dollars an hour.
RK: So you managed in this day and age to figure out how to get an income from journalism.
VB: Yeah (laughs.)
RK: You hear a lot these days about how the web is a double-edged sword because on the one hand, it has democratized the ability of people like you, or musicians or bloggers, to get access to an audience or a readership, but on the other hand, it’s disrupted distribution and payment flows. So suddenly creative people are bereft, with no way of getting paid, and here you came up with a way to do it.
VB: Yes.
RK: What about the incentives though? Couldn’t I just wait for everyone else to put the money in and then get the article for free?
VB: You could, but I guess some people are impatient; sometimes there are people who are willing to pay the entire bounty for one particular thing. I guess it’s a matter of paying to get it sooner rather than later.
Then in September Mihai Alisie, a guy from Romania, contacted me out of the blue saying “I’m thinking of starting a magazine, do you want to work together and become the first writer for it?” And I figured OK this seems like a much more credible effort and more likely to get somewhere than the Bitcoin Weekly, which had been struggling at the time — there had been a couple of writers at one point, but they all left. So I left Bitcoin Weekly and jumped ship to this new project, and that’s how Bitcoin Magazine started. There were four co-founders: There was Mihai, myself, Matthew Wright, Vladimir Marchenko.
RK: Where was everyone based?
VB: Mihai was based in Romania, Vladimir was from the UK, Matthew I’m not sure where he was, either in the UK or South Korea, or somewhere like that.
RK: You came together, collaborated, and were doing the writing the editing all online?
VB: Yes.
RK: How did the distribution work?
VB: The printing company would print five thousand magazines, they’d send them all, I think, to Mihai’s house and originally he was mailing them all out individually. Later, we had the magazines split up and sent to each of us and we would all ship them all off.
RK: These days where everything’s digital, why did you make it a print publication?
VB: Honestly, it wasn’t my choice, Mihai Alisie was the original founder. I was one of the co-founders, but I wasn’t the guy running the operation. I was the guy that would pump out one thousand word articles every two days.
RK: Is there a connection between writing and writing software?
VB: I suppose — at least with the kind of writing I do. The important thing is being able to think clearly and to be able to really formally understand what you’re talking about. And to understand how it splits up into individual pieces and why it all fits together.
RK: During all this, you’re also collaborating on software; i.e. open source projects — can you explain how that works?
VB: Well, there are several different kinds of open source. One kind is where you just write a program and then you publish the source code on the internet just because you want people to use it. Another kind of open source is basically the same thing but a company does it. A third kind is where there are a lot of people working on a project, with people sourced on the internet coming together.
The code libraries that I wrote were initially the first kind, where I would just code it myself. Some of them have become popular. I wrote something called pybitcointools ; basically a very easy to use Python bitcoin toolkit, that’s getting used apparently by quite a few people. It’s a good example of how open source works. Sometimes people either find bugs or they find features that they want to see included, in which case they make what’s called a pull request, where they take the code and modify it locally and then submit a request for changes or additions to the code.
RK: Do they have to ask you “I want to make these changes”?
VB: Well first of all, they can obviously copy the code and make their own version that incorporates the changes. If they want to include it in the “official” version, then they would have to ask me. I see the pull requests and I usually just accept all of them if they look good.
RK: That makes me wonder: I get how you have people coming together, and there’s a lot of excitement about this frontier in technology — building the future, making it happen — but isn’t it a problem if a private corporation comes along and takes the work you’ve done and uses it without crediting you or paying you? Does that happen?
VB: Some people are more worried about that than others. If you’re going to write software that you’re willing to let people use, then you have to let everyone use it. You can’t say “only nice and fluffy people are allowed to use it, corporations have to pay two hundred bucks.” It doesn’t work that way, unfortunately, because of the laws of information theory. You can’t make it free for some people and not for other people. Once it’s out there it’s out there basically.
RK: But on the other hand, you do have private companies employing open source developers?
VB: Yes.
RK: So they pay developers to create something that everyone can use?
VB: Exactly. And it doesn’t really matter if there are companies that take the code without contributing anything back. As long as there are enough that do contribute, software will get developed.
RK: And different components of a program are taken on by different people who say “I’m going to do this part of it”?
VB: Exactly.
RK: So does one program show that it’s been worked on by a group of different personalities? If you read the code, can you see different personalities in it?
VB: Sometimes, yeah.
RK: I think a lot of people think of software as a thing that’s very mechanical and faceless and impersonal, but an important point is that it’s made by people.
VB: Code is a kind of art, yeah.
RK: So who makes it becomes important.
VB: Yeah.
RK: One of the things you hear all the time is “Why are there not more women in open source?” Why is that?
VB: I’m not sure if it’s just a problem with open source. Unfortunately there doesn’t seem to be that many women in computer science in general, as far as I’ve seen. Whether that’s a cultural issue or whether that’s some inherent biological thing that makes women less attracted to abstract math, I’m not entirely sure. One interesting piece of evidence toward the more cultural hypothesis is that I visited China a few months ago. Here in North America, the bitcoin space is notorious for having maybe less than five percent women participating in it — in China it’s more like 30 percent.
RK: My feeling is this might change over time as cryptocurrency develops. It came from a specific set of circumstances, but it’s not going to stay in that place. And it seems to me this is important, too, because if it’s going to make good on its democratic ideals, it will need diversity and inclusiveness in order to get stronger.
VB: Agreed.
RK: So, you went to university to study…
VB: Computer Science at University of Waterloo. It’s a very good program I got into, the Advanced Computer Science Program. A lot of the classes are quite hard. Sometime around January I had this idea. In university there was something called a co-op program where you study and work — with study and work alternating for five years. I had the idea of using a bitcoin company as my co-op job. I found a company in the U.S. called Ripple, and I figured I’d try working for them. I sent an email to the CEO, Jed McCaleb, and in about five minutes he said “yeah, sure come on.” But the problem is, the visa application process ended up taking two months and then eventually just didn’t get anywhere. So that was happening, and at the same time, with Bitcoin Magazine, the amount of time I was spending on that was up from about ten hours a week to, by April, about thirty hours a week. So I was basically doing exams and a full-time job at the same time. Then in May I decided that I would go to the bitcoin conference in San Jose, which was like the first really large bitcoin conference that ever happened. At that point I saw just the sheer number of people that were there, the number of people that were building things, and I realized “hey this is real!”
RK: What did you do after that, did you go back to school?
VB: No, shortly after that I made the decision to go into bitcoin full-time.
RK: And leave school altogether?
VB: Yeah. Initially I thought I’d be leaving for twelve months. And then that twelve months turned into two years. And now two years is turning into three years and that’ll probably turn into infinity years.
RK: So after dropping out, what did you do?
VB: I went to Spain to work with Mihai on another web startup, something called Egora, which is an online marketplace. I stayed there for two months at this place called Cal a Fou.
RK: What is that?
VB: Cal a Fou calls itself a postcapitalist ecoindustrial colony. There’s an interesting backstory to it. The building itself is basically an abandoned factory. In 2008 there was this guy named Enric Duran. He borrowed 500,000 Euros from a bunch of major banks and then he — they actually call him the financial Robin Hood — he defaulted on all the loans and donated the money to a bunch of local co-operatives. And the coincidental thing is that four days after he did this there was the big financial collapse.
RK: Oh Wow.
VB: (laughing) So one of the main beneficiaries of this was this big co-operative that was trying to replace a lot of the social infrastructure in Spain! For its members, it provides food, it provides housing, and when I was there, it was starting to provide education and health care in this big self-contained network all through Catalunya. The province of Catalunya is also interesting because it has this long anarchist history.
RK: What are your own politics?
VB: Last time I took a political quiz it ended up telling me that I was moderately libertarian and slightly right of centre (laughs). But you know, in practice, within the blockchain space I’m not strongly ideological in any one particular direction. I really try to avoid falling for that particular tendency, I mean I see the value in lots of different ways of improving the world.
RK: What were they doing at Cal a Fou?
VB: In this particular factory, there were two crowds of people. One group was interested in more simple living. They were doing agriculture and trying to get into self-sufficiency. So for example, all of the furniture we were using was built in the factory. All of the soap was produced by picking flowers and converting the extracts and so forth. So that’s one group. The other group was these somewhat radical open source hackers. These were people involved in things like open source telephone systems — and there was Amir Taaki, who you might have heard of. We stayed together in this Cal a Fou area for two months. After I left, we travelled together for about a week — we were visiting a squat in Milan. Amir is this very interesting character, who is really concerned about things like privacy and freedom and empowering the little guy. He’s British-Iranian and a member of the European squatting community. He’s also interested in Esperanto and does a lot of different bitcoin projects. First of all, he worked on what was at the time the most complete bitcoin re-implementation, his own implementation of the bitcoin protocol called Libbitcoin; then, a set of command-line tools called SX. Actually, pybitcointools, which I created, has its own command line utility and this was sort of inspired by that. After that of course there was Dark Wallet, an in-browser wallet with built-in privacy features, and Dark Market.
RK: And the whole impetus of this sort of work is to solve political problems, isn’t it? Through technical means…
VB: Exactly.
RK: And to do this through decentralization? To wrest power from governments, from corporations, is that the idea?
VB: Pretty accurate. I can’t speak for him, but…
RK: No, but on decentralization generally — you’ve got Google, you’ve got Facebook, you’ve got Amazon, you’ve got Apple. A lot of people seem disappointed with what happened to the promise of the web.
VB: Yeah. The idea of decentralization is to create systems that specifically do not privilege any party on the base level. You can create centralized services on top of them, but the fundamental language that everybody speaks is supposed to be completely neutral. Something like peer-to-peer file sharing is probably the first example of that. Then of course you have bitcoin the currency. And the goal of building decentralized systems, and also to develop open source software, is to give people the ability to keep the control of their technological destiny in their own hands.
RK: And that’s what Ethereum is for?
VB: Exactly.
RK: What is a decentralized application?
VB: In a normal application you have users. You might even have multiple users, like in the context of so-called peer-to-peer lending you have the lenders and the lendees and anyone can join the network. But there’s still a central server and an authority managing the whole thing. So the idea of a decentralized protocol is that it has no central server. It has no central administrator or central controller. It’s just something that lives by itself; it’s made up of all of its users. There is no specific party who has the ability to subvert the system. And there is no party who has to continue existing in order for the system to survive.
RK: So there’s no single point of failure.
VB: Exactly.
RK: It could be attacked, I suppose, but it can’t really be stopped?
VB: Right. Exactly. It has no back doors.
RK: I think some people get scared by this. You could imagine a blockchain-based corporation that is predatory, for example extortion viruses. Would these be empowered or enabled by something like Ethereum?
VB: I suppose to some degree I’ll have to answer yes. Technology empowers everyone. And the internet has more or less created those extortion viruses. So it is a complicated balance in a lot of respects. Because on the one hand, decentralization does allow systems to exist in a way that means you can’t shut them down; on the other hand, the major saving grace I suppose is that it removes points of control. One big example of that would be something like Mt Gox, the big bitcoin exchange. It disappeared, along with 500 million dollars. What if there was more use of decentralized software in there, in such a way that no entity even had the ability to run away with those funds?
The other important part is transparency, which basically means you can track every transaction. In a lot of cases, you can see how funds are being moved. Unlike in the real world where the bigger you are, the easier it is to get away with things, in the world of crypto-anonymity, it’s actually the opposite. Because the bigger you are, the more statistically obvious you are and the harder it is for you to hide yourself.
Dread Pirate Roberts is the big example of that from The Silk Road. He was doing just fine being anonymous himself, until he just got too big and started to have too much to hide. So that’s another nice property I like: If someone wants to anonymously purchase fifty dollars worth of marijuana, go ahead, but MF Global would have had a harder time disappearing with two billion dollars worth of capital that went god knows where!
RK: Ethereum uses something called smart contracts. What are those?
VB: The simplest definition of a smart contract is it’s a computer program on a blockchain that directly controls digital assets.
RK: What does this mean in practice? Let’s say individually I entered into an Ethereum contract of some kind. Would I have recourse? Let’s say later I decide “Oh god I shouldn’t have done that!” Would I have to go to the legal system in order to dissolve it?
VB: It depends entirely on how the contract was coded. Ethereum is a technological system and technological systems at their base layer are not supposed to solve every problem. So for example, your computer’s file system does not try to prevent you from accidentally deleting a file. The way that problem is solved is there’s an interface layer on top that moves files to the recycle bin first — which is a very convenient feature. That’s a particularly good example because, on the base file system layer, that doesn’t exist. There’s a command called –rm you can use to just remove a file and it’s gone forever. This concept of a recycle bin acts as a safeguard because it exists on the next level up.
So first of all, in terms of contracts on Ethereum, if the terms were written to be unambiguous that would definitely help. On the other hand, especially for more complicated contracts, people aren’t necessarily going to be technically competent to read all the terms themselves. The way to solve that kind of problem is to create a reputation system where you’d have organizations whose purpose is to come up with a list of standard contract templates. Then if you are putting funds into a contract that has been vetted by, for example, a non-profit consumer advocacy foundation it’s more likely to be fine.
RK: Oh OK…this gives you the information you need to stay away from the more sketchy operations where people are trying to scam you…
VB: Exactly.
RK: Ethereum has developed in a very short period of time, just over a year. People are building applications for it already on a testnet, is that right?
VB: Yup.
RK: Have other people come up with applications you didn’t think of?
VB: Actually quite a lot. There’s an entire section on our forum for applications. Many people are interested in possible direct democracy uses — basically figuring out how to use Ethereum for organizational governance. There’s a bunch of people who are writing toolkits for those specific types of applications, which I find really interesting. There hasn’t really been a time before in history where you can just set up a governance structure and test it out at the cost of less than a dollar’s worth of transaction fees.
To give a non-threatening example — because these things, you don’t want to be replacing entire governments as a first step — suppose that five people want to make some kind of a non-profit. And these people are just small individuals, they only have a few hundred dollars each. They are in five different countries around the world. One or two of them has a corrupt government, and for another the cost of starting a legal entity is twenty thousand dollars, and the other two have their own problems. In order to solve their issues, one thing they might do is create this club using a smart contract on the blockchain. If they need to store funds, they would store funds inside of this smart contract. If they need to make expenses they could vote on how to spend the funds, all within the smart contract directly. So you could have a rule that says “anyone can make a proposal, the proposal consists of who to send money to and how much to send, and in order for the proposal to actually be executed it has to be ratified by three out of the five people.” This is something you could do in a smart contract very quickly. And that’s a very good use case by itself. Now, let’s say the club over time goes up from five people to five hundred people. One thing you could do is continue to have everybody vote on everything directly. You could come up with a nice little online interface for it, and it would work well. That is one route.
Now, there is this approach called liquid democracy, and the way this works is, any individual can select some some other person as a delegate and say: “I trust him, and he’s voting in my place.” Or in a more advanced system you could even select, say, three delegates and say: “Whatever the majority of them vote, I’m going to vote with them.” So If you want to trust some other group to make most of the decisions for you, then you can do that. But if you want, at any time — any time, not just once every four years, but at any particular second — you have the ability to withdraw your vote and re-direct it to someone else or start voting on campaigns yourself. This is something you could implement in a smart contract as well, and you could use this to run this five hundred person club on the blockchain.
RK: What’s the hard part right now going forward with Ethereum?
VB: First of all, just getting the platform done. We have working client applications. Now it’s a matter of making them fast, making them secure, making interfaces easy to use. We have raised a lot of money, so I have the opportunity to do many of those things.
RK: The crowd funding is projected to end in two weeks. Once it’s over, what kinds of things will you be able to do that you couldn’t before?
VB: Hire a lot of developers. Make sure all the clients become very good. It’s particularly important to make things secure, it’s important to make sure we have consensus, to make sure all the different clients work together. That’s the basic stuff to get launched. Also, have a good interface. Beyond that, one big challenge of course is the issue of scalability. Right now in Bitcoin and in Ethereum, there’s this property that every single transaction, the entire database, needs to be stored by every single node in the system. As a result, transaction fees to carry out an operation cost a couple of cents. Ideally, we’d like to do a lot better than that. But in order to do that you have to break the paradigm of every node storing everything. And you have to break it in such a way that minimally compromises the security and efficiency guarantees. That’s hard.
August 2015
In the ensuing 12 months, Buterin and a worldwide team of developers intensively worked to build and test the software components that would become the Ethereum Network. On July 30, 2015 the first block in the Ethereum blockchain — the so-called “genesis block” — went live, and the network was born.
Soon after, I spoke to him again.
RK: What is the genesis block and why is it important?
VB: The genesis block is the first block of the Ethereum blockchain. It’s important because for the first time since the project started we now have a live Ethereum blockchain that people can start using. There were test networks before it, but this is the moment that Ethereum is real and it’s actually there. And I think that was an important moment for the community because there were delays in development and a lot of people were lying dormant, or at least waiting and seeing. You know, “this thing looks really cool but is it actually going to work, are they actually going to pull it off?”
RK: And when the launch happened, where were you?
VB: I was in Berlin, doing a bunch of hectic last minute things before the launch, and celebrating after the launch with about ten of the Ethereum developers.
RK: And what was the reaction when it went live?
VB: Very positive! I mean, the launch happened about as flawlessly as it could have, I think. It launched, the blockchain stabilized within a few minutes, it started running. I mean, the only thing I heard was people saying congratulations all day.
RK: There are many people involved at this point it seems — you have a foundation, developers, entrepreneurs, there’s a whole ecosystem around Ethereum now.
VB: Yes. The Ethereum Foundation, for the whole time up until the launch, was the primary body that was doing Ethereum development. It got the 18 million dollars, it paid a huge amount of money for developing the Ethereum software, for paying for security audits and so forth. Right now, I think the Ethereum Foundation has a bit of a smaller role, in part because we’ve survived long enough that the community has grown. I think the community has grown already to critical mass. They’ve picked up a lot of things we thought we would have to do ourselves and have started doing them better than we could. ConsenSys for example is one of the larger companies in the Ethereum space. They have sixty employees, which is more than the foundation right now. They’ve just been taking a scattershot approach, building a huge amount of Ethereum applications for accounting, online collaboration, prediction markets, poker, music, crowd funding and so forth.
RK: I notice you’ve just finished up a developer conference?
VB: We just had Devcon1 in London. It was a very large event where over three hundred people came. Just about every Ethereum Foundation employee came, just about every employee from ConsenSys, some of these other companies that are building around Ethereum, people from finance, energy, both from the UK and from the rest of the world and some large corporations were represented. There was someone from IBM, a few from Deloitte, a few from Microsoft — just about every significant stakeholder in the Ethereum space showed up.
RK: In your closing remarks on the fifth day of the conference you said your favourite of all these things is the community.
VB: And it is. I think community is an extremely important thing for these decentralized projects to succeed. You definitely have smart contracts on the blockchain, but the thing that’s just as important is the social contract and communities around which these kinds of systems are built. The thousands of hours of unpaid work that people put into developing software around these projects, evangelizing for them and helping each other to come up with applications and so forth. That’s an ingredient that matters a lot, and without it I think a lot of these projects just can’t happen. And one of the really important things in that context is the culture. Because with some of these projects, particularly in this space, it’s easy to get a culture that goes negative very quickly. If you look at some of the PR that Bitcoin’s gotten, it’s had a long road working through that.
With Ethereum one of the things I’ve been impressed by is we’ve never really had these problems. We definitely have our internal disagreements but it doesn’t get to the point of people extremely loudly insulting each other on forums, or having the public meltdowns you sometimes see elsewhere. Some disagreements are inevitable in any community, but with Ethereum particularly we’ve been quite good at not having much of that. There is a huge diversity of backgrounds people are coming from. One of the lines that I think a lot of us believe in is that it’s not about the currency, it’s about the technology. And I think in the community it’s really like that. There’s people that come from the cryptocurrency space, there’s people from more traditional industries like finance and IoT — it’s people who see a problem, then they discover Ethereum and they realize that Ethereum is actually a pretty good way to solve it. I like the diversity of the kinds of problems that people are interested in solving. Even the diversity of political views that we have. There’s people building everything, ranging from decentralized markets to basic income programs. It definitely makes me feel happy to have that kind of really inclusive tent.
RK: For you, personally, what impact do you see or hope to see Ethereum have on the world?
VB: Hmm. It depends. The way people seem to perceive the technology changes so frequently, just because the space changes so frequently. I personally hope that we’ve built something that’s going to be useful to lots of people. I sometimes feel like I don’t know enough about the real world to know exactly how. But fortunately there are thousands of other smart people who are doing a lot of the good work at the edges. The kinds of values that really attract me about the platform are, in part, just how simple it is to make many kinds of development happen, how easy it makes it to do things, really cutting down barriers to entry — the idea that people should just be able to create their own businesses at a startup cost of something like fifty dollars. The amount of entrepreneurial energy that could be released is amazing. And the concept of decentralization — there are many different kinds of services that have so far either not happened at all or have existed only in highly centralized forms in large part because of trust problems that, so far, large institutions are the best way we have for solving them. It seems that cryptography might actually provide another way. Exploring just how far we can push that is a problem I find very interesting.
RK: It sounds like, on the whole, blockchains are going to change everything.
VB: Yeah
RK: Pretty soon? Sooner than later? Already doing it?
VB: I mean, it’s been a long road. We’ve been trying to work at it ever since Diffie and Hellman invented public key cryptography in 1974. But the thing is, there is actually evidence of exponential progress in this particular field, because with each individual component that people make, every time someone invents a component, this actually doubles the number of possibilities. For instance, before you had just public key cryptography. Now you have public key cryptography plus networking. Then you have public key cryptography plus networking plus consensus. And the more of these different pieces that people invent, eventually at some point the whole system is going to become so efficient that I think it will start becoming a serious contender as the backbone of the internet.
Image: frame-grab from a TV interview