(2023-12-28) Buterin Make Ethereum Cypherpunk Again

Vitalik Buterin: Make Ethereum Cypherpunk Again. ...deeper vision underlying crypto: we are not here to just create isolated tools and games, but rather build holistically toward a more free and open society and economy, where the different parts - technological, social and economic - fit into each other.

The term "web3" was originally coined by Ethereum cofounder Gavin Wood, and it refers to a different way of thinking about what Ethereum is: rather than seeing it, as I initially did, as "Bitcoin plus smart contracts", Gavin thought about it more broadly as one of a set of technologies that could together form the base layer of a more open internet stack.

if we want to extend the spirit of open source software to the world of today, we need programs to have access to a shared hard drive to store things that multiple people need to modify and access

And what is Ethereum, together with sister technologies like peer-to-peer messaging (then Whisper, now Waku) and decentralized file storage (then just Swarm, now also IPFS)? A public decentralized shared hard drive.

Unfortunately, since 2017 or so, these visions have faded somewhat into the background.

the only non-financial application that is actually being used at a large scale on-chain is ENS

Having lived through that era, the number one culprit that I would blame as the root cause of this shift is the rise in transaction fees (gas)... when transaction fees go to over $100, as they have during the peak of the bull markets, there is exactly one audience that remains willing to play: degen gamblers.

Now, fast forward to 2023. On both the core challenge of scaling, and on various "side quests" of crucial importance to building a cypherpunk future actually viable, we actually have a lot of positive news to show:

an opportunity to take things in a different direction. Namely, to make at least a part of the Ethereum ecosystem actually be the permissionless, decentralized, censorship resistant, open source ecosystem that we originally came to build.

What are some of these values?

Open global participation

Participation should be permissionless

Decentralization

Censorship resistance

Auditability

Credible neutrality

Building tools, not empires.

Cooperative mindset:

Projects try to be positive-sum, both with each other and with the wider world.

It is very possible to build things within the crypto ecosystem that do not follow these values. One can build a system that one calls a "layer 2", but which is actually a highly centralized system secured by a multisig, with no plans to ever switch to something more secure.

It takes a sewer to make a ninja turtle

A 2021 article by Dan Robinson and Georgios Konstantiopoulos expresses this vividly in the context of MEV, arguing that Ethereum is a dark forest

This is a big challenge for users of the space, but it also presents an opportunity: it means that we have a space to actually experiment with, incubate and receive rapid live feedback on all kinds of security technologies to address these challenges.

Problem Solution Table

Everyone wants the internet to be safe. Some attempt to make the internet safe by pushing approaches that force reliance on a single particular actor

But these approaches sacrifice openness and freedom

for crypto, the open way to improving security is the only way.

Ethereum as part of a broader technological vision

In 2014, Gavin Wood introduced Ethereum as one of a suite of tools that can be built, the other two being Whisper (decentralized messaging) and Swarm (decentralized storage).

In the last couple of years, with the rise of decentralized social media (Lens, Farcaster, etc), we have an opportunity to revisit some of these tools.

In addition, we also have another very powerful new tool to add to the trifecta: zero knowledge proofs. These technologies are most widely adopted as ways of improving Ethereum's scalability, as ZK rollups, but they are also very useful for privacy.

We can think of the greater Ethereum-verse (or "web3") as creating an independent tech protocol stack, that is competing with the traditional centralized protocol stack at all levels.

One of the benefits of thinking about it as a stack is that this fits well with Ethereum's pluralist ethos. Bitcoin is trying to solve one problem, or at most two or three. Ethereum, on the other hand, has lots of sub-communities with lots of different focuses.

we need not only a vision for a technical stack, but also the social parts of the stack that make the technical stack possible to build in the first place.

The Ethereum protocol's governance itself is notably non-financialized - and this has made it much more robust than other ecosystems whose governance is more financialized. This is why it's valuable for Ethereum to have a strong social layer, which vigorously enforces its values in those places where pure incentives can't

How do we actually make this integration happen? This is the key question, and I suspect the answer lies not in one magic bullet, but in a collection of techniques that will be arrived at iteratively.

Large-scale public goods funding, especially Gitcoin Grants and Optimism's RetroPGF rounds, is also extremely helpful, because it creates an alternative revenue channel for developers that don't see any conventional business models that do not require sacrificing on their values.

This is where I see the unique value proposition of Ethereum's social layer. There is a unique halfway-house mix of valuing incentives, but also not getting consumed by them.... valuing hard norms of neutrality, open source and censorship resistance as a way of guarding against the risks of going too far in being community-driven