Bankless Dialogue with Vitalik: Encryption promotes secondary distribution of human society
Original author: Bankless & Vitalik
Compiled by: Odaily Planet Daily 0xAyA
Editor's note: Bankless recorded a blog with Vitalik at the recent conference and talked about topics about ETH's independent ecology, new tracks, immortality and the next bull market. Odaily Planet Daily compiled it as follows and summarized the province Streaming perspective.
Excited about the decentralized social track, Farcaster and Lens are both doing great
The great vision of ETH is to truly create an independent open technology stack
Building new user-friendly “slides” is the Holy Grail of Mass adoption
Cryptocurrency can promote the secondary distribution of human society, and ETH can exist as a system that promotes distribution.
Asia’s contribution to Crypto is becoming greater than ever
AA wallet track is slightly saturated, and Builder is optimistic about security, infrastructure and enterprise-oriented stacks
The most important thing in the next bull market is to strike a balance between income and safety
Build a completely independent ecosystem
B: DeFi has replaced traditional finance, stablecoins have replaced bank transfers, and ENS domain names have replaced Twitter usernames. How do you see the balance between improving existing things and starting new things? Are we not developing enough new things?
V: Let me try to think more deeply about this. There are indeed many very new things in the cryptocurrency field, but sometimes I also feel that these new things are not imaginative enough in a certain way.
We can see what has been done in this space in the past few years: such as cool DeFi, I have also traded various tokens on DEX, but it is still just a tool in the entire process, and this process is In many ways it still looks similar to before. There are also NFTs, NFTs are new, they are an extension, including art collectibles, game items, etc. - of course, every new concept brings something completely new to this field.
One thing I feel all these examples have in common so far is that they are all independent components designed to fit into an ecosystem that is the same as before. And what we haven't successfully done yet is create a whole new ecosystem where the individual components complement each other in different ways, right?This is one of the reasons why I’m excited about decentralized social, and things are going better than I expected. I used to be very worried that we were just going to have 892 cyberpunk-like crypto-anarchist geeks, but if you look at Farcaster, it's actually very successful, and Lens, it's doing really well, too. Of course, recent events at Twitter have given these alternatives room to grow.
Farcaster for example actually has a pretty cohesive community and has been for quite some time, it's not just a few geeks who come in for a few weeks and then leave. But I think the long-term future here is that it can actually be integrated with everything else we do. For example, a social network needs to have some form of resistance against false identities. You need to ensure that there are 894 real people behind these 894 likes, not trolls. The problem is that all existing ways of doing these things are very centralized and very detrimental to privacy. It’s important to have more decentralized options to combat false identities, to have more decentralized options to recover accounts, to have more decentralized options to determine whether a person truly belongs to a community .
And these are things that the crypto space itself can do, like we have addresses and ENS, just a very simple basic way to prove that you spent at least $10 to post this, we have POAP, and then we're also doing Zu Stamps. Zu Stamps is basically like POAP, but tied to a social recovery wallet, so a lot of tools can connect to each other in a serious way and really build on top of each other.
I think the great vision here is to really create an independent open technology stack, think about the traditional technology stack, you have the phone number, you have Google, you have Twitter, I would say China has an independent technology stack, you have WeChat, you have Alipay, you have CBDC, which is the former, and crypto can go in the opposite direction - more decentralized conversation, right? The basics are you have your Ethereum account, you have various protocols, various POAPs, you have your reputation, and you have various recovery methods.And it all works together, right? I think there's also an important part of being like, "Hey, you can just remember one thing" in the crypto world.
But I think the holy grail is to try to create a "slide" where if a new person joins here for the first time, then they can create an address - if your address is basically controlled by a Gmail account or something, right? But they always have the option of a smart wallet, especially an ERC-4337 smart contract wallet, right, and you can upgrade it and change the logic without changing the address. Moreover, it is no longer backed by a Gmail account, but may be backed by its own key, or possibly multiple signatures. Your email is backed by your Ethereum address, essentially giving people an in-between opportunity, like a decentralized ladder to slide down. Finally, really getting into this completely separate stack where all the different pieces really fit together. So I think it would be really cool to realize that vision. And I feel like we really have the tools to do that, which didn't even exist a year ago. That's one of the things I'm excited about.
The role of ETH in the future
B: To summarize what you said, in 2023 Ethereum already has many tools, such as Farcaster and Zupass, you mean these tools are ready, they just need to be combined together and put into a new context. And one context that I'm seeing booming right now is Desci. During Zuzalu in Montenegro – a week-long event focused on decentralized science and cryptocurrency-related technology. The event attracted leaders from different industries and fields who shared their knowledge and experiences in areas such as artificial intelligence, synthetic biology and longevity. And my biggest takeaway from this experience is that all of these things are related to cryptocurrency. So, by bringing together knowledge from different industries and leaders in the field of synthetic biology, have you learned anything new or changed about Ethereum and its role in the world and future industries?
V: I think over the past 10 years I’ve gone through an evolution from very abstract to very concrete.If you think back to the original vision of the DAO in 2013, it was very vague, which was that we could have these automated companies. The internal logic of these automation companies is completely unclear, and many things are unclear.
Today, things are starting to get more concrete, both within the cryptocurrency space itself and in areas related to cryptocurrency. I think there are a few different aspects to the role this field plays, one of which is existing as an alternative system.
For example, if you want to save and spend money in a country with a completely collapsed currency, or in some system where you just want to be able to save money and do it in a way that doesn't allow you to be arbitrarily deprived of it, rather than being deprived of it by some minimum random Suspicious surveillance systems deeming accounts suspicious enough to freeze - this is a problem that exists in many specific industries, and I'm not even talking about any regulatory issues. I'm referring to areas where intermediaries like Paypal don't like it. It's a pretty large category, and there are a lot of people primarily in emerging economies, but even in places like the United States, there are a lot of people who are unbanked or functionally unbanked in various ways. And they don’t choose not to have bank accounts out of their own free will, but because it’s hard for them to get one.
I think the second aspect is as a laboratory for testing new mechanisms and ideas that can first be really tested and deployed within a community dedicated to those ideas, and then those ideas can be used in a variety of ways Penetrate into the wider world. I think in this context, some of the DAO experiments we've done are a good example, as well as the work being done in areas like Farcaster and ZK Space. So, Zuzalu and Zupass, like you mentioned, are a good example of areas where we can experiment within our own community of decentralized enthusiasts.
Then inevitably some ideas filter out into the wider world, in various direct or indirect ways. They essentially set a demonstration or standard that a world that is more open, neutral, decentralized and more conducive to local sovereignty is possible, and create a prototype that shows how this can be achieved.
Like Public Goods is definitely a very specific use case for what you call decentralized governance, because it's basically doing the problem of decentralized decision-making and decision-making mechanisms. But Public Goods has some specific characteristics that make it worth considering as a separate field. One example is that I think in Public Goods it makes more sense to make radical decentralized decisions that might not be appropriate in many other types of decentralized governance. This is because the problem is different. If you let a DAO decide whether to make a website round or square, and then you compromise and get a square with rounded corners, that is not necessarily a better choice, because this Compromise often leads to worse results.
One might say that for certain types of decisions, what we really want is to have one or a few people thoughtfully making and executing the decision, and that it's better to stick to one of those visions than to try to compromise awkwardly. But on the Public Goods side, I think this happens less frequently. For example, giving $10 million to 10 different projects is better in most cases than giving $100 million to one project. Of course, there may be exceptions, like if you want to go to Mars, it's better to give one person $1 billion than to give a million people $1,000 each, because if you choose the latter, none of them have any chance of achieving that. Target. But overall, this is a question better suited this way. In the world of design, I think looking at it as a matter of creating more diverse funding mechanisms to reduce the chance of important things being completely ignored is probably the right way to go.
Because what we see is that while government is often there as an initiator, government is often not as necessary in practice as the textbooks say because the free market cannot do the job on its own. As is often the case, the government is somewhat of a rather irresponsible initiator. Sometimes a crisis can inspire people to take action, and that's a heroic act and a good thing.
Basically, though, once the first vaccines and other things came out, things kind of changed. People are tired, they're tired of being forced to do all sorts of things in response to COVID-19, and that's very understandable. This fatigue has even turned into a ridiculous fatigue about various agencies (like SPE) continuing to devote resources to solving the COVID-19 problem that still exists and is still important, and even there is a huge funding gap in this regard.
As I call my business Public Goods , I put longevity and anti-aging in this category. The market excels at entrepreneurial goods, like those that require a visionary to build, and most people won’t even realize how valuable it is until it’s made. If you have an entrepreneurial Public Goods, like A kind of Public Goods that people don’t realize the value of after it is realized or until it is realized, and the market and the government tend to ignore it. So the question is whether some innovation in the crypto space can help. So far, the biggest people we've seen filling this gap have been basically billionaires like Sergey Brin, Elon Musk, and others. But we also see that even so, there are still things that are overlooked, right? For example, Brian Johnson is famous for his Blueprint program, where he spends millions of dollars every year and devotes his entire life to staying healthy and optimizing his body as much as possible. This is great for cutting-edge scientific experiments, but it also leaves a very obvious question, which is, for ordinary people, is there a version that works for them? Will we once again see the rich enjoying all this while the average person remains stuck at 77? This may be where the crypto space can really help.
If most people aren't billionaires and they actually see the need to have something like a blueprint, it doesn't require sacrificing your entire livelihood or spending an unrealistically large amount of money every month trying to make it happen . Then you try to do community building efforts to inspire communities to actually build up. I guess you could call it a blueprint for everyone to actually execute and do a lot of experiments at scale so that your sample size is no longer n equals 1, but actually n equals 500.There is tremendous value in doing everything in an open source way and working together as a community to move things forward. I think there's a lot of ethical fit in the crypto space with this approach, like, we're seeing a lot of exciting things with this approach.
But the other thing that the crypto space can offer is actually trying to use the different tools that we have to make it work on a technical level, so there's obviously public interest funding and tools that are built to allocate capital - capital itself is moving in the Configuration in a more decentralized manner. We have secondary funding allocations, we have retroactive public benefit funding, there are thousands of different tools, and we should probably have those three in every industry. Then all these different tools for determining who contributed, which ended up being really valuable and trying to use on-chain contribution and citation graphs and so on. I think the crypto space itself is the most natural experimental subject, and the DeFi space seems to be the second most natural experimental subject, so I think there is a lot of spiritual fit here that has the opportunity to translate into practical fit. In this case, I think part of it is to create an alternative system because the existing social public interest funding infrastructure is not serving a lot of these very interesting science projects.
But I think my long-term goal is also to set the example, like you don't just want a $1 billion crypto market, but you want to put trillions of dollars of world capital into things that really matter, I'm going to really help scale that, These are some of the things I would like to see.
Startup Ideas Beyond Crypto
B: We are very focused on Desci now, but it also includes many other areas, such as AI, synthetic biology, immortality, etc., which are all very interesting. If Vitalik you had an exact copy of yourself, and this Vitalik wanted to build a startup, which of these areas would attract your attention the most? Where would you build a startup?
V: Interesting question, what would the other me do? Maybe I'd like to do a little bit of full-time work, like one of me might run off and do the other one.
B: Simply put, the answer is like Network state.
V: I understand what you are trying to express is the broad concept of Network state, which can develop in many different directions. It is related to a specific set of ideas but adjacent and can go in many different directions. I think in a lot of ways this is about community-driven design, because that's about organizing communities to explore cutting-edge technologies together. I think this is one of the goals that people hope Network state can achieve. But at the same time, some people think that a lot can be done without having to create a new country and fully participate in geopolitics. Therefore, there is a lot of room for exploration of this concept.
I can also see my "doppelgänger" from a year or two ago, like I actually separated and tried to do decentralized social networking. But I'm glad projects like Farcaster, Lens, and others exist to try out different versions of this concept, and they seem to be moving in a direction that's fairly consistent with the values.
My biggest concern, especially with VC-backed projects, is that they might be told by some "adult": Hey, cryptocurrencies only exist as a cosmetic, you have to back everything up with an email account, you have to use Phone number verification everything must rely on a centralized server to run transactions. And then at some point, they're going to tell you, hey, you can't actually let the internet see everything I see, because then the AI system will read it. Then you get further confused. So I'm really happy that Romero, Richard and Nicole didn't end up like that, which I think is great. Moreover, Lens itself also attaches great importance to the theoretical nature of accounts, and has had a very radical attitude towards this from the beginning.
There is still a lot of room for improvement. What's interesting is that I think someone can find their place and gain permission anywhere in the ecosystem. For example, the Farcaster team focuses on prediction, but you can create your own company, make your own interface, and follow completely different principles. This is an opportunity that still exists for many. There are other interesting problems in this area that need to be addressed.
For example, I feel like sometimes the Oracle issue doesn't get enough attention, which is, we have Oracle, but it's important to really rigorously look for things that are not optimized for speed but are optimized for security. As a DeFi practitioner, your task is not to provide users with a 5% return instead of a 3% return, but to minimize the possibility of users receiving a negative 100% return. Fortunately, the lesson is clearer now than it was 12 months ago, but I think it could be clearer. Another issue is that we can fully promote the development of zero-knowledge technology. This is also an area that I really enjoy being involved in in some way. In biology, I think it's really important to have a blueprint that works for everyone, and I think someone should do it. Overall, I think there are a lot of very interesting things to do in this area.
Expectations for Builder
B: So for Web3 Builder, where do you think they can adjust their focus in the current Ethereum and broader crypto space?
V: That’s a great question. Six months ago the answer would have been an AA wallet. But now things get really interesting. Almost everyone uses an AA wallet. I've been traveling around East Asia for the past month, and I've talked to at least four, maybe even five teams that are building some form of AA wallet. It's interesting that these new areas of technology create a sense of disruption, right? If you come in as a new guy, suddenly you're no longer 10 years behind everyone else. So you actually have an opportunity, and I think ZK Evms and ERC-4337 do a great job of actually enabling these new people to participate.
I remember that five years ago, East Asia did a good job in exchanges and mining, but contributed very little in development and research. And now things have changed dramatically, which is interesting, right? Because when regular cryptocurrency Twitter users say “Asia is back,” they’re actually referring to the millionaires out there buying their favorite Dogecoin and the like. But I feel like Asia is definitely back and the level of engagement and technology engagement is even greater than anything I've seen before, I mean before Covid or any of the recent bubbles.What I'm trying to say is there are a lot of opportunities to get involved here, so the question is, what do you want to do now? In this regard, I feel like wallets are starting to get saturated. A slightly less saturated area is security software, basically I'm starting to see some of this exist and I think delving deeper into this area and building tools that can help users understand what they are doing when they interact with DeFi might be an option. .
Another issue is building the infrastructure to drive the Ethereum Layer 1 ecosystem toward Layer 2. One example of this is the Merkle Proof Validator, which basically allows you to fully decentralize validating ENS names on Layer 2. But from what I understand they currently basically just verify signatures from a centralized provider, but if you do Merkle proof verification you get rid of the centralized provider and don't actually need to consume it because of the off-chain calls Any Gas, this is an example.
But I feel like there are many other examples of properly built infrastructure. If we really want to push this ecosystem from complete reliance on centralization to real participation in Layer 2, the third example is an enterprise-oriented stack, encouraging existing enterprises that do centralized things to switch to building decentralized solutions. . Expand this. You remember the time between 2014 and 2019 when everyone was excited about permissioned consortium chains, right? Do you remember this?
B: I remember this - IBM Hyperledger.
V: Exactly. There are many examples of this and we failed. I personally think the reason people get interested and then fail is that they instinctively feel that in many applications you want some kind of compromise between a centralized approach and a decentralized approach. Just as you want a decentralized approach because that enables trusted collaboration between different market participants, the other side of the compromise, which is to do everything on-chain, actually completely destroys privacy and is not scalable, And it would require people to completely rewrite their software, right.
What people want is the best of both worlds that consortium chains offer, but I think what we end up with is a compromise that minimizes vested interests, right?The reason is basically that you're still building a blockchain in the first place, so you still need most of the overhead of building a blockchain. And then you also have a lot of community building overhead, but again that's actually made more difficult because of centralization, right? A pattern I see happening over and over again is that someone creates an alliance, the first five members happily join the alliance and start working together, but members 6 to 20 end up being uninterested because they don't want to join An ecosystem that already feels dominated by the first five members, so there are a lot of structural reasons why this approach shouldn't succeed.
But I think something that could work is Validiums, right? Validiums are basically Rollups without putting the data on the chain, or another way is a centralized system, but the hash of the database is put on the chain, and every time the database is updated, a new hash is put in, And use zero-knowledge proof to prove that the update is valid. So you can use your existing centralized system and then just add an additional payment function that reads the database, hashes it, and understands the execution logic to generate the zero-knowledge proof and then uploads it to the chain superior.
This way, you can prove that the database was only updated in a valid way. It's just something that runs continuously on-chain, and once those hashes and proofs are on-chain, individual users can interact with the program and get Merkle tree proofs of their current balances. You can do all of these operations, and it's basically a compromise between centralization and decentralization - you get the benefits of decentralization but keep things efficient, and you don't have to pay gas for every transaction. , don't even have to tell your IT staff to completely rebuild the system, since you can keep the software and just run the extra software and have it sit on the side. I think it's actually a 50% compromise that offers the advantages of both, rather than the disadvantages. There's actually a weaker version that's starting to be used, which is proof of debt service, right? Just like proof of debt service is what I think is a semi-successful enterprise use case, with proof of debt service you can publish that data on-chain to prove something about your database, which is the user balance that you actually have The amount won't be more than what you have in your wallet, so I think that's a starting point.
This can be applied to gaming, it can be applied to potential social media algorithm type use cases, it can be applied to supply chain management. ——In short, it can be applied to many different fields. I mean, supply chain management is interesting because if you have those records, there are financial things, like short-term loans, that can be tied directly to those records. So there's a lot of fun things to do, right? However, the software stack that makes this possible is only possible now because it relies entirely on zero-knowledge proofs.
So now we've reached a stage where regular developers can build things on ETH without having to understand in depth what it is, and I think that's a very valuable thing for us to start building now. I think in general, new tracks like this are popping up every six months, so there's a lot of opportunity to get involved.
Thoughts on the next bull market
B: As we wrap up this conversation, I want to turn our attention to the present. I think over the past few months, people in the crypto world have refocused their perspective, starting with cleaning up the mess of 2022, because I think that process has been pretty smooth. We can believe that good things are about to happen, and now our focus turns to what happens next – everyone is cautiously anticipating the bull run, but what are some things we hope the crypto world doesn’t do, or might pay attention to, so that we can To successfully navigate the next bull market, if cyclical theory is right, if we ever go through another bull market again, what should we be trying to accomplish? What can we do as a community, as a culture, to make sure we never screw up again?
V: For me, it’s important to find a balance between increasing security and decentralization, building an ecosystem that allows people to invest money and get returns, even if it’s 2% APR, but still feel comfortable , they would not risk losing 1/50 of all their money in that year. I think this is possible, but it will require a very different mentality from the pursuit of maximum returns at all costs, and therefore the need for increased security in DeFi protocols, wallets, chains, and ecosystems.This is one aspect. On the other hand, we need to do this in a way that doesn't give up, that if you really want to be safe, you pretty much have to deposit your funds into Coinbase or have all of your activity protected, I think if we can achieve that With this, we will be able to go further.