vitalik buterin

Bitcoin maxis vs. multichains: Two opposing visions of crypto’s future

Many Bitcoin maximalists are even hesitant to apply the term “crypto” to their preferred asset, as it brooks association with more centralized coins.

Jan3 CEO Samson Mow has said that comparing Bitcoin to crypto is like comparing “an aircraft to a paper airplane.” Ripple CEO Brad Garlinghouse said, “It will be a multichain world.”

These opposing statements are the latest front in the longest-running feud in cryptocurrency — the battle between Bitcoin (BTC) and everything else that followed.

For the crypto masses, those individuals who hold only to a single blockchain are often referred to as the maximalists.

Bitcoin maximalism is almost as old as Bitcoin itself, with the phenomenon emerging not long after its creation.

According to Bitcoin educator and self-confessed Bitcoin maximalist Giacomo Zucco, maximalists hold four truths dearly:

  1. Everything that is not Bitcoin is a scam.
  2. Every attempt at changing Bitcoin is a scam.
  3. Every attempt at pushing people to spend Bitcoin is a scam.
  4. We shouldn’t be nice to scammers.

Even in the earliest days of blockchain, altcoins began proliferating. By 2010, the term shitcoin was born.

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Diversified set of guardians required for safe self-custody: Vitalik Buterin

In a Reddit post, Buterin emphasized that having too much of a concentrated grasp on your self-custody wallets can be a bad thing if you get “hacked, coerced, or incapacitated or die.”

Ethereum co-founder Vitalik Buterin has emphasized the importance of having a varied set of “guardians” to maximize the safety of crypto asset self-custody via multisig and social recovery wallets.

Given the ever-growing rate of crypto scams and hacks over the past few years, and several major crypto firms going bust in 2022, self-custody and maintaining sufficient wallet safety procedures have never been more critical.

In a March 16 Reddit post on the r/ethereum community titled “How I think about choosing guardians for multisig and social recovery wallets,” Buterin gave a detailed run down of how he approaches wallet security.

While their structures differ, multisig and social recovery wallets rely on guardians, which serve as external sources to recover funds or approve transactions. Generally, guardians can be sets of external wallets belonging to the same individual or addresses controlled by other people or entities.

According to Buterin, it’s important to decentralize wallet guardians, as owning more than one of your guardians provides a “tricky tradeoff: you get to trust other people less, but you’re also concentrating more power into yourself, which can create a risk if you get hacked, coerced, or incapacitated or die.”

“My rule of thumb is that enough guardians should be controlled by other people that if you disappear there are enough other guardians left to recover your funds.”

Buterin went on to advise that someone’s set of guardians should not know of each other, as this “greatly reduces the risk that they collude” to attack their wallets and assets. However, they should still be able to find each other in case something happens to the wallet owner.

Comments on Buterin’s post. Source: Reddit

“If something happens to you, they will still be able to find each other, because there are obvious standard protocols that naturally come to people’s minds in such a situation (e.g. contact your family),” he wrote.

Additionally, the Ethereum co-founder suggested that people should “instruct guardians to ask a security question” that only they and the guardian will know when confirming an operation — and only confirmed when the correct answer is given.

Related: DeFi sees its biggest hack in 2023 as Euler loses $197M: Finance Redefined

For degen traders or those not making long-term hodl plays, the Ethereum co-founder also stressed that they should use guardians that can respond quickly to suit their fast-moving needs.

“If you’re doing degen stuff with on-chain contracts, you may need to act quickly: pull money out if a contract gets a vulnerability, move money around if you are close to being liquidated, etc. If your needs include this, then you want to find guardians who can act quickly on short notice.”

Finally, Buterin recommended testing each guardian at least once a year, as this will confirm that they “haven’t forgotten or lost their accounts.”

Given the ever-growing rate of crypto scams and hacks over the past few years, and several crypto firms going bust last year, maintaining sufficient wallet safety procedures has never been more important.

Vitalik Buterin says ‘more still needs to be done’ over high Ethereum txn fees

“Good user experience is not about the average case, it is about the worst case,” the Ethereum co-founder wrote.

In a new blog post published on Feb. 28, Ethereum co-founder Vitalik Buterin documented the continued need to improve the network to better facilitate Ether (ETH) as a means of payment.

Buterin shared how he tried to pay for tea for himself and friends at a coffee shop in Argentina in 2021 but had to pay 0.01 ETH (around $40 at the time), as that was the minimum deposit for the owner’s exchange account. “I did not mind the 3x overpayment and treated it as a tip,” the co-founder wrote. 

In another instance, Buterin explained how he tried to pay for tea at another location in 2022, but two separate transactions failed due to requiring “extra gas to process the transfer” and a UI glitch in his mobile wallet. Buterin also raised the issue of unpredictable transaction times, writing:

“Many times, there has been a surprisingly long time delay between my transaction getting accepted on-chain, and the service acknowledging the transaction, even as ‘unconfirmed.’ Some of those times, I definitely got worried that there was some glitch with the payment system on their side.”

According to Buterin, outliers nevertheless remain on the Ethereum network despite recent improvements. “If you send a transaction at the same time as when many others are sending transactions and the base fee is spiking up, you risk the base fee going too high and your transaction not getting accepted,” he wrote. “Even worse, wallet UIs suck at showing this. There are no big red flashing alerts, and very little clear indication of what you’re supposed to do to solve this problem.” Buterin added that even experts could be confused about how to speed up transactions in such cases.

“Good user experience is not about the average case, it is about the worst case. A UI that is clean and sleek, but does some weird and unexplainable thing 0.723% of the time that causes big problems, is worse than a UI that exposes more gritty details to the user but at least makes it easier to understand what’s going on and fix any problem that does arise.”

Among other issues, Buterin raised the problem of the internet being “not 100% reliable” and the need for possible offline proof that customers indeed transfered their transaction data directly to the merchant. Another issue raised was “losing a small amount of BTC and ETH” due to secret-sharing-based off-chain social recovery methods for wallets, which Buterin deemed as fragile.

According to YCharts, Ethereum transaction fees have fallen to an average of $0.656 at the time of publication, which is much lower than the average of $20 witnessed during the peak of the crypto bull market in 2021.

“Along with the all-important issue of high transaction fees due to scaling not yet being fully solved, user experience is a key reason why many Ethereum users, especially in the Global South, often opt for centralized solutions instead of on-chain decentralized alternatives that keep power in the hands of the user and their friends and family or local community.”

Ethereum median waiting times of block transactions. Source: Vitalik Buterin, Yinhong Zhao and Kartik Nayak

Vitalik Buterin donates $227K to help earthquake victims in Turkey

The Ethereum co-founder has sent around $227,000 in ETH to two Turkish earthquake relief organizations.

Ethereum co-founder Vitalik Buterin has now made at least two substantial contributions to help the victims of last week’s devastating earthquake in Turkey and Syria.

The 7.8 magnitude earthquake struck on Feb. 6. Its death toll has now risen to 33,000 — one of the world’s worst in decades.

Over the week, the Ethereum co-founder has been one of many actively donating Ether (ETH) to support relief efforts in Turkey. His latest donation was on Feb. 12 for 50 ETH, or approximately $77,000, sent to Anka Relief, according to blockchain security firm PeckShield.

Anka thanked the Ethereum co-founder for his largesse and said that crypto donations had been flowing since the first day.

“Since day 1 of the disaster, we witnessed donations piling in the wallets of a handful of major NGOs. Great that they have attracted and will be attracting more funds,” said the organization.

Anka provided a list of crypto wallets than can be used for donations. The Web3 relief support organization has also spearheaded the Ukraine DAO project to raise crypto donations to support efforts in the besieged country.

The latest donation adds to another 99 ETH that Vitalik sent in support of earthquake victims. On Feb. 11 the vitalik.eth address sent around $150,000 worth of ETH to Ahbap, a nongovernmental and nonprofit organization dedicated to relief efforts in Turkey.

Ahbap has also provided several crypto addresses for various tokens it can accept as donations.

To date, it claims to have received $4.3 million in crypto donations, with stablecoins being the most popular tokens sent. According to Etherscan, the Ahbap wallet contains 409 ETH, worth $622,000 at the time of writing.

On Feb. 10, London’s Financial Times reported that crypto donations had been pouring in from across the globe. More than $10 million in crypto had been sent by companies, with Binance alone donating $5 million in support of Turkish relief efforts.

Binance also announced $100 in BNB (BNB) airdrops to those in the hardest-hit areas last week.

Related: The Web3 community responds to Turkish–Syrian earthquake tragedy

On Feb. 7, just a day after the devastating quake, Cointelegraph reported how the Web3 community was coming together to arrange crypto donations for NGOs and support.

It is not the first time crypto has been used for earthquake relief donations. In 2015, Bitcoin donations were sent to relief organizations following a massive quake in Nepal.

SSV launches $50M ecosystem fund to support ETH staking tech

Vitalik Buterin identified distributed validator technology, or DVT, as a key component of Ethereum’s decentralization efforts.

Validator infrastructure developer ssv.network has launched a new ecosystem fund to support Ethereum proof-of-stake decentralization — a move that the company said would promote innovation around Ether (ETH) staking technologies. 

The ecosystem fund, valued at $50 million, will support projects building applications using distributed validator technology, or DVT, the company announced on Jan. 19. The fund is solely dedicated to backing DVT use cases in support of Ethereum’s long-term decentralization efforts.

DVT is an open-source protocol that allows a validator’s responsibilities to be distributed across multiple nodes. The protocol was a key component of Ethereum co-founder Vitalik Buterin’s roadmap for Eth2, as more DVT implementation means more decentralization.

SSV noted that several venture capital investors — including Digital Currency Group, HashKey, NGC, Everstake, GSR and SevenX — have promoted Ethereum’s use of DVT.

SSV said it had already pledged $3 million toward developer grants and that $1.2 million has been allocated to over 20 proof-of-stake projects, including Blockscape, ANKR and Moonstake.

According to Alon Muroch, the core development lead at SSV, Ethereum is “currently secured by a small group of companies, which, when put together, control the entire blockchain.” He said the aim of DVT technology “is to distribute Ethereum’s security by offering quick and easy access to an open-source, public good which will completely change the way staking is operated today.”

Related: ETH staking on top exchanges contributes to Ethereum censorship: Data

Ethereum’s transition to proof-of-stake is a multi-phased process designed to enhance the network’s scalability, security and decentralization. The transition introduced ETH staking, where users actively participate in validating transactions. The minimum staking threshold for becoming a validator on Ethereum is 32 ETH.

As of early December, it was reported that demand for liquid ETH staking was on the rise. Blockchain analytics firm Nansen referred to staked ETH as the “first yield-bearing instrument to reach significant scale in DeFi.”

Vitalik Buterin highlights what he’s bullish about for 2023

The Ethereum co-founder expects to reach a new milestone for rollups this year.

Ethereum co-founder Vitalik Buterin has shared some bullishness for the year ahead, including reaching a new milestone for rollup scaling as per the Ethereum roadmap.

The Ethereum developer also confirmed the rollout of the Ethereum Improvement Protocol (EIP) 4884 sometime in 2023, which had been removed as part of the upcoming Shanghai upgrade package set for March.

Responding to a Dec. 31 post from former chief technology officer of Coinbase, Balaji Srinivasan, asking users what they were bullish for in 2023, Buterin said he was looking forward to reaching the “basic rollup scaling” milestone as outlined in the Ethereum roadmap.

He explained that this meant the rollout of The Surge-related Ethereum Improvement Proposal (EIP)-4884.

EIP-4884 was initially expected to be packaged in with Shanghai, introducing “proto-danksharding” to significantly enhance layer-2 rollup scalability, the Surge, ahead of the full implementation of the major Sharding upgrade late next year.

He also said that this would mean that rollups would be “partially taking off training wheels, at least to stage 1,” referring to a Nov. 22 post on the “Ethereum Magicians forum,” which describes three stages of the “trust model” based on how mature a project’s tech was.

Stage 0, which Buterin likens to having “full training wheels,” has the requirements for all transactions to be on-chain and provide users the ability to withdraw their assets without the operator.

Stage 1, or “limited training wheels,” must have a transaction verification method such as a fraud proof or validity proof scheme to accept or reject which transactions are allowed by the smart contract, along with an overriding security council to oversee the process. 

While stage 2 has “no training wheels” and must have two distinct fraud provers, two distinct validity provers, or one of each. Upgrades are allowed at this stage but must have a delay of more than 30 days.

Related: Vitalik reveals a new section in the Ethereum roadmap: The Scourge

In a separate Twitter post one day earlier on Dec. 30, Buterin also made some comments on what he believes a “Good Crypto Future” might look like.

Buterin outlined several areas of crypto that would need to be fixed, including scaling, privacy, user experience and making user accounts more secure for average users than centralized services.

He also sees payments and decentralized finance (DeFi) being part of this future, and new organizational paradigms powered by decentralized autonomous organizations (DAOs).

ETH staking on top exchanges contributes to Ethereum censorship: Data

One of the biggest factors harming Ethereum’s credible neutrality is the use of censoring MEV relays by crypto ecosystems and exchanges.

For most crypto ecosystems, being compliant with federal sanctions have a negative impact on its global reach. However, when it comes to Ethereum, investors have significant power to decide the degree of compliance the ecosystem obeys.

Nearly 60% of all post-Merge Ethereum blocks comply with the United States sanctions put forth by the Office of Foreign Assets Control (OFAC). While the crypto community stands against this transformation, many fail to realize their own contribution to helping Ethereum attain total OFAC compliance.

One of the biggest factors harming Ethereum’s credible neutrality is the use of censoring Miner extractable value (MEV) relays by crypto ecosystems and exchanges. MEV relays work as a mediator between block producers and block builders, which are being used by prominent crypto players, such as Binance, Celsius Network, Coinbase, Kraken and Cream Finance, to name a few.

Top Ethereum censorship offenders leaderboard. Source: MEV Watch

Users staking Ether (ETH) on platforms (as shown above) that run censoring MEV relays on their validators are directly contributing to the censorship of Ethereum. Crypto platforms can help remediate the situation by adopting a non-censoring MEV-boost relay.

For validators and relay operators, some of the popular MEV-boost relays that don’t promote censorship include Ultra Sound Money, Agnostic Boost, Aestus, BloXroute Max Profit, BloxRoute Ethical, Manifold and Relayooor.

OFAC compliance data for last 100 Ethereum blocks. Source: MEV Watch

At the time of writing, 67 of the last 100 Ethereum blocks were found enforcing OFAC compliance.

As investors, it is important to understand that protocol-level censorship is deterrent to crypto’s goal of unleashing open and inclusive finance. Hence, it becomes important for both investors and service providers to opt for non-censoring MEV-boost relays.

Related: BNB Chain now has more unique addresses than Ethereum, developer says

The Ethereum ecosystem recently witnessed two dormant addresses wake up after four years to transfer 22,982 ETH.

The ETH transfers in question can be traced back to trading platforms Genesis and Poloniex where the unknown whales transferred 13,103.99 ETH and 9,878 ETH, respectively.

Vitalik Buterin discusses his excitement for the future of Ethereum

The Ethereum co-founder was bullish on the rise of decentralized blockchain identities to safeguard user privacy.

Vitalik Buterin says that money, blockchain identities, decentralized finance (DeFi), decentralized autonomous organizations (DAOs) and hybrid applications are the top developments he is excited about in the Ethereum ecosystem. In a Dec. 5 blog post, the Ethereum co-founder describes his experience of using Ether (ETH) as a means of payment in a cafe in Argentina: 

“When we walked in, the owner recognized me, and immediately showed me that he has ETH and other crypto-assets on his Binance account. We ordered tea and snacks, and we asked if we could pay in ETH. The coffee shop owner obliged, and showed me the QR code for his Binance deposit address, to which I sent about $20 of ETH from my Status wallet on my phone.”

That cafe visit occurred last December, when Ethereum was still proof-of-work, so the transaction didn’t really make “pragmatic sense,” Buterin conceded. Network fees accounted for one-third of the transaction, and the funds took several minutes to arrive. But due to Ethereum’s merge to proof-of-stake in September, “transactions get included significantly more quickly, and the chain has become more stable, making it safer to accept transactions after fewer confirmations.” 

Then, addressing the rise of DeFi, Buterin wrote that the industry started off honorably but quickly became “an overcapitalized monster that relied on unsustainable forms of yield farming.” However, he added that DeFi is in the “early stages of setting down into a stable medium, improving security, and refocusing on a few applications that are particularly valuable.”

Next, Buterin praised the rise of blockchain identification methods, such as Sign In With Ethereum (SIWE), and their ability to enhance user privacy. “It [SIWE] allows you to interact with a site without giving Google or Facebook access to your private information or the ability to take over or lock you out of your account,” wrote Buterin. Furthermore, he said such protocols could also be used to prove eligibility in events like governance or airdrops without compromising users’ personal data.

Regarding DAOs, Buterin said while the term “captures many of the hopes and dreams that people have put into the crypto space to build more democratic, resilient and efficient forms of governance,” greater work needs to be done to improve censorship resistance and susceptibility to internal organization. Highlighting the example of MakerDAO, Buterin wrote:

“MakerDAO has $7.8 billion in collateral, over 17x the market cap of the profit-taking token, MKR. Hence, if governance was up to MKR holders with no safeguards, someone could buy up half the MKR, use that to manipulate the price oracles, and steal a large portion of the collateral for themselves.”

Finally, the Ethereum co-founder noted the potential of merging Ethereum blockchain technology with off-chain processes such as voting. In one scenario, Buterin wrote: “Votes are published to the blockchain, so users have a way independent of the voting system to ensure that their votes get included. But votes are encrypted, preserving privacy, and a ZK-SNARK-based solution.”

As for the next steps, Buterin stuck to his belief in prioritizing projects with long-term value propositions rather than those fixated on short-term profit. “Many of the more stable and boring applications do not get built because there is less excitement and less short-term profit to be earned around them: the LUNA market cap got to over $30 billion, while stablecoins striving for robustness and simplicity often get largely ignored for years,” he wrote. Post-Merge, Ethereum’s next major anticipated update is the Shanghai hard fork, which will enable users to withdraw their staked Ether. The upgrade is scheduled for the second half of 2023. 


Vitalik Buterin on the crypto blues: Focus on the tech, not the price

The Ethereum co-founder has recommended weary crypto investors to shift away from price watching and focus on the tech instead.

Ethereum co-founder Vitalik Buterin has shared some sage advice for traders feeling the blues of the crypto bear market: Focus on the tech rather than the price.

The Ethereum co-founder made the recommendation in response to a Dec. 3 post from self-described crypto investor CoinMamba, echoing what many crypto investors are likely feeling at the moment.

“After 9 years in crypto I’m kinda exhausted. I want to move on and do something different with my life. Tired of all these scammers and fraudsters,” CoinMamba said.

The crypto industry has continued to be bombarded with unsavory news since the collapse of FTX and the resulting contagion, which recently claimed crypto exchange BlockFi.

BNB Chain-based decentralized finance (DeFi) protocol Ankr recently confirmed it was hit by a multimillion-dollar exploit on Dec. 1.

Even before that, hackers had already been responsible for the theft of over $2.98 billion in digital assets in 2022, according to statistics from blockchain security firm PeckShield.

A large chunk was from the Ronin bridge exploit, which resulted in $625 million in crypto assets being pilfered back in March. 

However, as a means to combat all the negativity, Buterin suggests moving away from trading and investing “circles” and, instead, getting closer to the “tech and application ecosystem.”

“I’d recommend increasing your distance from trading/investing circles, and getting closer to the tech and application ecosystem,” he said.

“Learn about ZK-SNARKs, visit a meetup in Latin America, listen to All Core Devs calls and read the notes until you’ve memorized all the EIP numbers…” he added.

Ether bull and host of The Daily Gwei Anthony Sassano agreed, saying the bear market is the “perfect time” to shift away from market watching and learn more about the tech.

“Much more signal than noise (especially in the Ethereum ecosystem) and the tech side is so much more exciting than the markets anyway.“

Ethereum has given investors plenty to focus on this year, with the completion of the long-awaited Merge on Sept. 15, which saw the network shift away from proof-of-work to proof-of-stake (PoS) consensus.

Buterin later added a new category of milestones to the Ethereum technical roadmap, one that aims to improve censorship resistance and decentralization of the Ethereum network.

“Being in it for the tech is already a significant and positive culture pivot, relative to being in it for price movements,” said Buterin in his recent Twitter post.

Related: Vitalik Buterin offers lessons for crypto in wake of the FTX collapse

In November, Buterin told Bloomberg that the collapse of the FTX crypto exchange brought lessons for the entire crypto ecosystem.

He labeled the FTX collapse as a “huge tragedy” but also noted that the problem was in people, not technology — adding that the underlying stability of distributed ledger and the technology powering the crypto asset economy has not come into question.