Title: S16 E24: Vitalik Buterin on the Future of Bitcoin & Ethereum
Podcast: Bitcoin Takeover Podcast (host: Vlad Costea)
Guest(s): Vitalik Buterin (co-founder of Ethereum; co-founder of Bitcoin Magazine)
Published: 2025-05-02
Duration: 3:02:17
Episode URL: https://bitcoin-takeover.com/audio/?name=2025-05-02_s16_24_vitalik_buterin_on_the_future_of_bitcoin_ethereum_-_02.05.2025_20.31.mp3
Audio: https://bitcoin-takeover.com/audio/media/2025-05-02_s16_24_vitalik_buterin_on_the_future_of_bitcoin_ethereum_-_02.05.2025_20.31.mp3
Transcript: CORRECTED. Base: local Whisper medium.en transcript with automatic diarization, reconciled against a full-episode local Whisper small.en pass (word-level diff) and the available second-opinion caption excerpts, with 71 doubtful, dropped, truncated or looping stretches re-transcribed locally from short audio clips (small.en, 9 of them re-run with VAD). Speaker labels fixed by hand (Vlad Costea, Vitalik Buterin); spurious inline speaker names and a hallucinated phrase from the base transcript were removed. The feed has no show notes, so names and jargon were checked against the title, the feed keywords and the web (Mihai Alisie, Amir Taaki, Dark Wallet, libbitcoin, pybitcointools, Bitcoin-Qt, Bitcoin Knots, Theymos, Pieter Wuille, Greg Maxwell, John Dillon, Mastercoin, colored coins, Namecoin, BitShares/ProtoShares/AngelShares, Dan Larimer, Daniel Krawisz, Craig Wright/CoinGeek, Deconomy, Mircea Popescu, Kyle Samani, Charlie Shrem, Ray Youssef, Eli Ben-Sasson, StarkWare, Zcash, Robin Linus, Liam Eagen, Jonas Nick, Shielded CSV, BitVM, OP_CAT, OP_RETURN, zSide/EthSide, LayerTwo Labs, Bitcoin Cash, Roger Ver, RISC-V, Reth, Pectra, ZK-SNARKs, Tornado Cash, Railgun, Privacy Pools, Intmax, Safe, Keccak, SHA-256, KoalaBear, Loopring, ECMUL, Gwei/Shannon, Claude Shannon, Hal Finney, Nick Szabo, David Chaum, Cyphernomicon, Mike Belshe, pcaversaccio, Jameson Lopp/Casa, Phoenix, Blixt, LNbits, BTCPay, ACINQ, Start9, Umbrel, FreedomBox, Monero, Scott Alexander, vitalik.eth.limo, Farcaster, Ethereum Magicians, ethresear.ch, ETHdam, Citrea, SideShift.ai, Noones.com, Hodling.ch, Bitcoin.com News); a quoted passage was checked against Vitalik's blog. Light clean verbatim: ums, false starts and stutters removed; factual slips by speakers are kept as spoken. Intro music omitted. The published audio repeats the last ~30 seconds of the outro; the repeat is transcribed and marked. Remaining doubtful words are marked [unclear: best guess].
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[00:00:46] Vlad Costea: Vitalik Buterin, welcome to the Bitcoin Takeover Podcast. This is Season 16, Episode 24. We are live with Vitalik Buterin. And this episode is sponsored by LayerTwo Labs, Noones.com, Hodling.ch, Citrea, SideShift.ai, and Bitcoin.com News. Vitalik, the goal of this episode right now is to explain to people why you're such a Bitcoin maximalist and you've done a much better job upgrading Bitcoin than companies such as Blockstream or Chaincode or whatever, which raised capital for Bitcoin specifically. But a lot of the stuff that was built for Ethereum is coming back to Bitcoin right now.

[00:01:23] And it's really incredible. And I also got to apologize to you because you turned out to be right in some regards. And I trolled you on Twitter a few times and I chased clout just making fun that Ethereum 2.0 is not coming. It came, it never had an incident. It was cool. Thank you very much for your work. And let's talk about Bitcoin and Ethereum.

[00:01:45] Vitalik Buterin: Yeah, of course. Very happy, excited to get into it.

[00:01:49] Vlad Costea: So I was thinking about a very logical way to pursue this.

[00:01:55] So let's talk about your involvement in Bitcoin first, because there's so much that people usually don't mention when it comes to your contributions. And then we can transition into Ethereum. So when did you discover Bitcoin and what was it like back in the day?

[00:02:13] Vitalik Buterin: Early 2011. So I actually heard about it from two different sources at the same time. One was my dad just casually mentioning it. And the second was hearing about it from some libertarian podcast on the internet.

[00:02:30] Vlad Costea: Which one was it, Ian Freeman?

[00:02:33] Vitalik Buterin: It might have actually been, yeah. I mean, I'm sure, you know, March 2011, you know, within a year, the AIs will be able to nail down the exact episode. But basically, I thought, OK, this is interesting.

[00:02:48] And I figured I should take an honest effort at actually getting into this community. And of course, Bitcoin is a currency. And normally, with currencies, you're not supposed to buy them. You're supposed to work for them. And so I started scouring the Bitcoin forums, looking for a Bitcoin job. And eventually, I found this guy named Kiba, who was starting this blog called Bitcoin Weekly. And he was offering people five Bitcoins per article, which back then was $4, to write articles for his site. And so actually, very few people were taking him up on his offer.

[00:03:29] But I was a high schooler with a lot of time on my hands. So I went and did. And I wrote an article on microtransactions. I got the $4. I wrote a bunch more articles. Eventually, despite paying me basically five times below minimum wage, he ran out of money. And I came up with this fun business model, which was that I would write two articles a week. And then we would publish the first paragraph of each one. And then we would say, the rest of the article is held for ransom. Here are Bitcoin addresses.

[00:04:08] Vlad Costea: Like shareware and video games.

[00:04:12] Vitalik Buterin: Right. Well, so this is like, it's kind of collectively like you liberate an article, right? If like everyone throws money into a pot, and it adds up to 2.5, then we would release the rest of the article. And we did this. And then we actually managed to keep on getting money. And so we kept Bitcoin Weekly running, I kept getting some Bitcoin. Then a few months later, Mihai Alisie, who is actually also from Romania, he reached out to me and he said that he was starting a Bitcoin magazine that would even have a print edition.

[00:04:51] He asked if I wanted to become the main writer. And so I did. And so this was all happening while I was still in high school. And then I moved to being in university in 2012. I basically kept on just being a writer. And I think to me, the process of like researching topics within the Bitcoin world and then writing them was my introduction into just learning about all of the different aspects of what happens in the Bitcoin world, right? Like I talked about technical things, economic, political things, different parts of the Bitcoin community, the kinds of like Bitcoin accepting businesses that people were trying.

[00:05:37] And then it kept going from there.

[00:05:40] Vlad Costea: Yeah, a lot of us started the same way. We discovered it and then we searched for jobs. I think when I started, it was a lot more established. You could actually find publications and they were much more serious, paying more than $4, but it was still not that much. But you said your first article was about Bitcoin for microtransactions. And I'm curious to know if your understanding of Bitcoin has remained the same or your expectation of Bitcoin or you believe it evolved naturally into this store of value phase.

[00:06:17] Vitalik Buterin: So I think one thing that's really important to remember about the early 2010s environment is that the fiat payment methods at the time, they charged crazy fees, right? Like it was a major pitch of Bitcoin that these other means of payment, they would charge $0.29 plus 2.9% for domestic and plus 6.4% for international, I think was what PayPal took. And it was standard advice, right? That if you are a Bitcoin merchant company, you don't even emphasize the self-sovereignty because that's like weird stuff that only appeals to a few people.

[00:06:58] You just talk about how Bitcoin has low fees, right? Western Union moving money for a fee, Bitcoin moving money far better. And it's like an unlimited amount of money for, back then, a very tiny transaction fee. And of course, what's happened since then, I mean, obviously Bitcoin had its whole situation and then fees went up, and then there have been these attempts with layer twos to try to enable still self-sovereign ways of transacting with lower fees. But then at the same time, the world doesn't stand still for you, right?

[00:07:34] And the fiat payment methods have gotten better, specifically in terms of fees, right? I mean, they've gotten worse in terms of [unclear: deplatforming people], but they have gotten better in terms of fees. And that's definitely a different landscape, right? Back in the 2010s, I think even within the, I suppose, blockchain, not Bitcoin space, you could basically get away by tricking people into thinking that things that are actually benefits of digitization were benefits of blockchain, because that was the frame that people were thinking it, right?

[00:08:15] It's like traditional paper stuff versus digital stuff, which is better and more efficient than, well, it happens to be on a blockchain, right? And today, that's not the game anymore, right? And today, we have to admit that centralized fiat stuff is very efficient. It has lower fees. It makes sense. Like, you can afford to have lower fees if you only need one server processing a transaction, and you don't need any other nodes co-executing it. You don't need anyone to keep proving it and so on. You don't need consensus. And so, self-sovereignty is really the thing that any blockchain really can compete on with regard to centralized systems. So, I think that is a really necessary adaptation. And in terms of Bitcoin's role since then, I think evolving into a store of value is a very natural and sensible thing to do in the context of the block size being limited and the chain only being able to process a certain amount of activity, right?

[00:09:33] If you have a particular limitation, that's just the natural thing to go for that's compatible with that limitation. I mean, I do think there's all of the questions of like, were there other roads that could have been taken? But in this context, focusing on being a store of value first just makes total sense.

[00:09:57] Vlad Costea: Yeah, I asked you this because I recall in 2017 that you seem to be in favor of the Bitcoin Cash camp, and there was a point when Bitcoin Cash was number two on CoinMarketCap, and you posted that tweet, which became famous or memeable: "Congrats on this, seriously." It was addressed to Roger Ver, I think. And I'm curious to know if you still believe that Bitcoin should have scaled with bigger blocks, or you think that the current approach with experimenting with various types of layer twos is more wise in the long term.

[00:10:34] Vitalik Buterin: By the way, did you end up reading the article I wrote that was my review of the two block size war books?

[00:10:42] Vlad Costea: Oh, yeah, I remember seeing that on Twitter when you posted it. And I agree with you, by the way.

[00:10:50] Vitalik Buterin: Yeah, so my view there, just to summarize there, right, was that I think big blockers were responding to very legitimate concerns. And there's a lot that's correct in their position, but at the same time, they as a faction just totally failed to have any kind of competence at actually executing on things. And over time, that's basically what caused them to lose people.

[00:11:24] But there's the politics of a situation, and the politics of a situation is always a mix of actual issues and the social factors. I think if I had to actually think through the issues, if I had to go back in time and push us, say this would be some kind of approach, I would have probably said some moderate block size increase and then actually put more effort into layer twos at the same time. And I think my reason for that is I do actually believe that self sovereign payments are important.

[00:12:13] Basically, the vision of the world that I don't want to see is a world where you have theoretically self sovereign money, but then it's like gold. It's like theoretically self sovereign, but then it's so inconvenient to do things with it directly that most people do things through centralized and not very self sovereignty friendly intermediaries. And as a result, if the government ever really dislikes it, they can just like do a repeat of good old executive order 6102. And then, like, basically, you know, the whole game is lost again.

[00:12:47] Right. So, like, I believe in, you know, there being a large user base that's like, actually capable of interacting with the chain and doing things directly in a self-sovereignty-friendly way. But like I recognize that there is a balance. Right. And I recognize that especially in the context of the technology of the 2010s, there would have been no way to do that to scale up to the entire world without actually just like completely breaking things.

[00:13:20] Vlad Costea: Yeah, that's another conversation that we should be having when we get to the Ethereum topic. But you mentioned that when you first discovered Bitcoin, you wanted to work for it because that's how you earn money. I also know that you were involved in Dark Wallet, and that was a project started by Amir Taaki. And he presented some promo videos of you basically doing some jumps on stairs just to show that you're a punk or something. And when I interviewed him and that was a pretty long one, we spoke for about seven hours.

[00:13:53] He seemed a bit bitter or something because he said, you know, around the time when he was working with you on Dark Wallet, you were not famous or anything. And he was like the star of the project. And then he left the space for a few years. And when he came back, he realized that you're this celebrity and he has to basically prove himself once again. What was it like to work on Dark Wallet, by the way?

[00:14:18] Vitalik Buterin: Yeah, I mean, first of all, just like Amir himself is a really impressive character, right? So he was working on libbitcoin back in 2013, which was like one of the first or the first alternate Bitcoin implementations. And that was actually the thing that inspired me to start working on pybitcointools. And so that was one thing. And then with Dark Wallet, I remember CoinJoin was this new technology that was just emerging at the time, right? And there was this big question of how do we upgrade the privacy of Bitcoin?

[00:14:59] And this was when the Silk Road arrest happened and there were a few other things happened that just showed that Bitcoin blockchain analysis was actually getting really powerful. And just having your different UTXOs be separate does not protect you, right? Or at least it does not protect you enough. And so the question as well, how do you actually step up and get to the next level of privacy? So I started working, started helping, I contributed some basic patches. I'm trying to remember, I mean, one of the things that we did is, I believe, actually made it in a browser extension format to make it more convenient.

[00:15:51] So, no, that was really interesting. And though, of course, eventually, yeah, [unclear: first colored coins and Mastercoin] and then Ethereum ended up just taking up all of my time. But we've been doing our best to carry our part of the privacy torch since then.

[00:16:12] Vlad Costea: Yeah, you gave me the perfect hook to basically move on to the next topic. But I still want to provide a bit of context to this conversation of Bitcoin privacy in 2013, because there are two papers that came out at the time. The first one was Zerocoin and the second one was Zerocash. They had sort of similar authors and they were proposed as soft forks for Bitcoin to improve the privacy with zero knowledge proofs. And I guess it was a bit too early for them. They were too avant garde and they were not accepted for merging.

[00:16:46] And Greg Maxwell put up this BitcoinTalk post in 2013, I think it was August, and he said he's going to give out a bounty to whoever is going to build the first CoinJoin wallet. And I think it was him who came up with the term CoinJoin for the first time. Before that, it was just mixing. Yeah, and there were three co-signers to this multisig. I think it was Theymos and Pieter Wuille and Greg Maxwell. Amir Taaki basically came up and said about a week later, we have it.

[00:17:19] We built Dark Wallet. We want to collect the bounty. And part of the reason why, and this goes into conspiracy theories, and I'm not sure if you're a fan of them, but there was this character who emerged at the time and he was sort of like the Michael Saylor of his era. It was John Dillon and he donated to the bounty. And Amir is still frustrated about this because he feels like that guy stole his opportunity to collect the bounty. So what John Dillon did was to donate some Bitcoin to the bounty and become a decision maker and basically got his own seat at the table and said, you know, it's dangerous to give this money to Dark Wallet because they're using libbitcoin.

[00:18:05] And there are some technical differences between libbitcoin and Bitcoin-Qt. And I don't know, it was very political and very ahead of its time. And I'm fascinated by this whole story.

[00:18:23] Vitalik Buterin: Interesting. Yeah, I mean, the whole "should alternative implementations even be a thing" topic is fascinating. I mean, I feel like, you know, I hope I contributed my part to the conversation with Ethereum actually being this ecosystem where you have a lot of different clients. And I think none of them has majority market share now. And so we can actually see what it's like live. I mean, I'm actually curious because I haven't followed. Like, how have, I guess, you know, your and other Bitcoin people's opinions on the multiple clients topic been or evolved since 10 years ago?

[00:19:09] Vlad Costea: Yeah, today there's still a lot of infighting because of Bitcoin Knots and some people thinking that it's the pure way of running Bitcoin because it filters out inscriptions. The perfect metaphor for that is like trying to stop the rain with a tennis racket. Right.

[00:19:28] Vitalik Buterin: Yeah. I mean, like filtering out inscriptions thing like that. To me, it never made too much sense, right? Because I mean, one, obviously, you know, if you want to dump data on chain, then you can always just dump it through UTXOs. And I feel like... I've always disagreed with it as a matter of, I guess, what you might call political strategy, right? Because once you start censoring something, like even if you can say you're like censoring a category through a technical measure, like, it still creates this impression of unreliability of like, oh, you know, will there be another category of usage that gets decided to be [unclear: improper] and then rugged at some point in the future, right?

[00:20:19] And I've always thought, like, hey, we have fees, we have a free market. Free markets are a great way of fighting pollution if there actually is a price mechanism. And, you know, here there is. And so we should just use it.

[00:20:37] Vlad Costea: Yeah. Coming back to the topic of colored coins, you are a co-author of the paper, as far as I know. And also around the time, maybe a year or two later, we got Counterparty and Mastercoin slash Omni, which were ways to create what was called at the time Bitcoin 2.0, which was the idea that you can put other stuff on the blockchain, tokenize shares of a company or tokenize art or pay dividends to investors using the blockchain. It was pretty novel at the time. Of course, it happened on Bitcoin because it was the most popular and most robust network.

[00:21:17] But there were some limitations to it. And the story is that you wanted to build Ethereum on Bitcoin, and then you decided to create an altcoin.

[00:21:29] Vitalik Buterin: Yeah. So basically, yeah, what happened was that at first, I was thinking to build Ethereum as a Mastercoin-style, I guess, the thing that today people call a sovereign rollup, right? It's like a layer two, except like there isn't a way by which the layer one actually recognizes the layer two state because Bitcoin scripting, like, I guess at the time, definitely didn't have the ability to do that. Now, like, maybe it kind of does or will because of like, BitVM and OP_CAT. But originally, I started doing it as a layer two, and then actually, I started making it a layer two on top of Primecoin instead of Bitcoin.

[00:22:15] And the reason why I made that choice was actually because this whole OP_RETURN situation was happening, right? And it basically seems to be like, you know, if there is this big faction that's saying, like, this use case is bad and wrong, and they were seriously proposing and even implementing ways to censor it, then, like, why would we want to be a layer two of a thing who is a core developer community, like actively thinks that we're spam and is actively trying to censor us out in a few cases, right?

[00:22:54] And so for that reason, we just kind of went and first did Primecoin. But then eventually, you know, what happened was that we realized that there was enough attention and enough development effort on the whole project. But basically, before that, I was literally assuming I would have to code up the whole thing myself, right? And I figured I would be able to code up some layer two, but I would not be able to code up an entire blockchain with a peer to peer layer, like I thought peer to peer was totally incomprehensible voodoo at the time.

[00:23:26] And but then after like that moment, it was in January, when we realized how much attention and how much development effort there was, we decided, like, hey, let's just make it an independent chain. And things went from there.

[00:23:43] Vlad Costea: Yeah, at this point, I gotta mention that one of the show sponsors, which is Citrea, is trying to build exactly what you said. With BitVM and also a covenant, they want to build a layer on top of Bitcoin, like a sovereign roll up, which is offering extended financial services, like being able to borrow, or maybe have some services like banking, but without the actual bank with protocols that you can verify. Right now, they're on the Bitcoin testnet. If you want to download the wallet, you can check it out at citrea.xyz.

[00:24:19] And the other sponsor I have to mention is LayerTwo Labs. And that's how we actually met Vitalik, because you were on the Drivechain Talk Telegram chat. And I saw that you said something in there. And I double checked that that's your account. And then I said, hey, Vitalik, want to do a podcast, and you DMed me. They're also trying to build an Ethereum sidechain for Bitcoin. And I think they have the latest version right now. It's called zSide. No, no, that's the Zcash one. EthSide, I think.

[00:24:52] And it's really interesting because they're taking your work and they're trying to bring it to Bitcoin, which proves that there is value to it, contrary to what the Blockstream people will say.

[00:25:08] Vitalik Buterin: That's cool. Yeah, I mean, yes, it's definitely been interesting to like see this new wave of people doing like various kinds of layer two things, various kinds of like optimistic and ZK proving things on top of Bitcoin script. It's, yeah, I mean, I yeah, it's, it's cool to see. And it's also just like so deeply fascinating on a technical level, right? Yeah, the whole like puzzle of, you know, how you actually write something like an optimistic proof system or a ZK prover on this, like very tiny stack based language that only supports a couple of things.

[00:25:58] And, of course, you know, I ended up making the EVM considerably more complicated, you know, in part because I didn't want every dev to have to go through that kind of process. Though, I think since 10 years ago, I have kind of like somewhat warmed up to UTXOs over time. So that's been, like, it's been interesting to just go through, you know, different scaling and privacy scenarios and start to see what the benefits are. But no, it's, I think, you know, having more innovative ecosystems, doing these kinds of things is great for everyone.

[00:26:38] Vlad Costea: Yeah, when it comes to Ethereum, what I've been thinking about is basically that when you started this, people told you that it's not going to scale. And you're actually there are two sides of it, the side that said it's not going to scale, and the side that inspired you to write the Bitcoin maximalism article from 2014. Where someone told you, ha ha ha, whatever you're building, we're just going to copy and paste the code onto Counterparty, I think, at the time. We're going to take your EVM, we're going to make it happen on Bitcoin.

[00:27:09] But in spite of this, you went ahead with it. And the criticism from Blockstream and Adam Back and all the others, Greg Maxwell, was that it's never going to scale and there is no way for this to work. But you found a way to work with ZK proofs and rollups. And I have some respect for you because basically you went head on with this approach and then you found a way to make it work, as opposed to just saying, well, it should not be tried because it doesn't scale.

[00:27:43] Vitalik Buterin: Yeah, I think I thought that clearly just the benefits of, well, of an EVM style approach to smart contract programming. I mean, I think we definitely see them, right? Like they are high in the sense of just making it easy for people to build all of these different DeFi protocols that have happened on top of it, whether like Uniswap or Aave or any of these others. It's like there's a lot of logic that you can do in like 10 or 15 lines of code and so on.

[00:28:22] But at the same time, you know, I do admit some of the limitations I had when I was 19 and like, there's definitely big parts of me that just constantly wishes I could send back some extra programming wisdom back to the 19 year old version of myself, right? So with scaling rates, like the two axes that you want to disentangle, I think, are one is like the VM and that two is the parallelization, right? Because those are separate, right? And since then, we've seen there's been a couple of these examples of VMs, I think even some of the private blockchain projects from the late 2010s did them.

[00:29:08] And now some others as well, right, where basically it's like a UTXO-based system, except you're allowed to have an arbitrary program determine whether or not a particular transaction is valid. And then if you do that, then you can make a lot of Ethereum like things happen. But at the same time, you have like full parallelizability. And you do have like, somewhat worse DevEx in some respects, like making something like Uniswap is harder, right? Because, like when basically for something like Uniswap to work, like every cent, like you need to have sort of one UTXO representing the Uniswap state, and then every sender would have to basically get know the last sender is a transaction, but like you would get parallelizability, right?

[00:29:56] And the other thing is this like difference between sort of minimal script and a full virtual machine and that's something that just like the critique intuitively felt wrong. And I think the reason why the critique felt wrong is that I wrote about this in more detail. There was an article from, I think, almost a year ago on glue and coprocessor architecture. But I basically made the point that you can split computation up into two different parts, where one part I call like specialized heavy computation, which basically, you know, it includes AI, it includes cryptography.

[00:30:38] And that computation is like heavy, but it's also it has a lot of structure to it. And so you can make like very optimized implementations of it. And then the other part I call business logic. And business logic is like, you know, like for i equals zero, i less than 100, i++, if this then do that, while this do that, and so on, right. And like that stuff is very unstructured, and often hard to optimize. But it's also like very friggin trivial, right? It's like 100 opcodes, when we're talking about CPUs that can do a billion cycles a second, right?

[00:31:13] Like if you think about, you know, an elliptic curve multiplication, right, inside of an ECMUL, you have a loop that multiplies the point and goes through the addition process, like 256 times, right? So it's like compared to that, like business logic is trivial. And so people complained, like, why 256-bit VM, why interpreted, [unclear: really inefficient], but like that never actually mattered too much, though. Although recently, I think some, you know, I don't know if you saw the RISC-V stuff, right, actually, you know, the conversation is changing a bit, I think.

[00:31:50] But there's definitely ways in which I was like, a little bit over optimistic, like, I think the EVM being 256-bit, and so on, like, it was not, it was not fatal, though, it was also definitely far from optimal. And then the other critique that I remember at the beginning was the whole sandboxing thing, right? It's like, hey, how do you actually yeah, like, VM sandboxing is just known to be a very hard problem, like, how do you prevent bugs where someone can like escape out into the computer?

[00:32:19] And that, interestingly enough, I think it never ended up being a problem even once, right? And basically, yeah, you know, we've had consensus bugs, we've had, like, resource-based, you know, denial of service bugs, we've had all kinds of bugs, I don't think we've ever had a sandbox escape bug, possibly even in any implementation. I mean, definitely not the major ones, right. And possibly the reason might have been that the kinds of VMs that people normally try to sandbox are just more powerful, and their implementations are more optimized, and they try to sort of, like have much more like one to one correspondence between, you know, the top level VM and the underlying thing.

[00:33:01] Whereas, like the EVM started as just being a very naive interpreter, and that's just like natively much more sandboxable. I think my other response back then is like, if we ever had a sandbox attack, then the sandbox attack would almost by definition, or a sandbox escape attack, that attack would like almost by definition, run differently on every different computer, because different computers have different data in the other parts of the machine. And so it would just immediately cause a consensus failure. So there's just like, a very natural and obvious fire alarm for that sort of thing.

[00:33:35] But, you know, that ended up not happening. And on the parallelization side, I think that the detractors did have a very valid point, it ended up not being a fatal point, it ended up being a [unclear: minor] but still a valid point, right. And if you look at some of the layer one scaling EIPs that we have for 2026, like something like block level access lists, and like staleness, and a few other things that, like, basically, a lot of the scaling related EIPs we have, like, basically, yeah, actually, yeah, end up trying to go into the direction of trying to like capture some of the benefits of the UTXO model, which is basically explicitly declaring what state you're accessing, which enables parallelization and enables a lot of other things.

[00:34:21] Actually, yeah, there's also an access list based solution for like long term state size management. So we're sort of trying to, I guess, move from, you know, like single-threaded, just very naive, single-threaded to something where you might call it sort of a halfway point, like basically something where, like, whoever is responsible for building a block for the first time has to add some extra information, or even people who are responsible for sending the transactions, they have to add some extra information. And then from then on, it gets executed in parallel.

[00:34:57] So a lot of really fascinating, like, software engineering and thinking has happened there over the last few years. That was just totally not a thing 10 years ago.

[00:35:08] Vlad Costea: I want to take just a step back because Ethereum started out as this proposal for a Bitcoin 2.0 protocol. And at the time, you had a lot of competition. There was Counterparty, there was Omni, there was NXT. And these guys seemed very professional. Like if you look at their videos back in the day, they promised a lot of transactions per second, they had a DEX from day one, they were very well funded. And they seem to be, I don't know, no offense here, but you were like a very young person doing this project with Ethereum.

[00:35:45] But these guys seemed like, you know, they have gray hair, and they basically sharpened their teeth coding. And they came up with this very compelling marketing. And I'm not sure exactly what went wrong. NXT was also proof of stake since day one. They made a lot of promises that they're more advanced and they're superior from a technical point of view. But somehow it was Ethereum that is the one that we speak about today. And there's also Ripple, which initially was proposed like this. At one point, you almost got a job at Ripple.

[00:36:17] I'm happy you didn't. But yeah, you faced this competition from the early days, and yet Ethereum ended up becoming the dominant Bitcoin 2.0 implementation platform for tokens for computation for all of this cool stuff. Why do you think that is?

[00:36:39] Vitalik Buterin: I think, yeah, I mean, I think Ethereum was, one, it was the one that went all the way, right, in the sense of like, actually offering general purpose programming. This is actually a lesson that, interestingly enough, Ethereum itself had to relearn in the layer two world. Like I remember, back in 2020, yeah, or 2021, Loopring, this was the very first ZK rollup on Ethereum. And it was even a stage two ZK rollup. So it even, like it was fully trustless, didn't have any security council-like backdoor stuff in it.

[00:37:19] And it did everything, it even did all of the hyper efficient stuff, like it compressed transactions down to like 16 bytes. And so the transaction costs on it were crazy low, it was there. But then it just never got too much traction, right. And the reason why is because it was not a full EVM, right? It supported payments, it supported like DEX, it supported very basic things. But the thing that people wanted is full programmability. And of course, like that was even more true in 2021, where there were these huge masses of developers that were used to full programmability, and they demanded full programmability, and they even demanded the EVM specifically, like even the differences between the EVM and the EVM minus five features are like big enough to cause a lot of projects to not go on one layer two, and instead go to another one, right.

[00:38:09] But like, the difference between full programmability and the, what I called, in Mastercoin, the Swiss Army knife approach, where you say, these are 20 applications that I like, let me support those 20 applications, and let's do nothing else. That was like, basically, the problem is, you know, there's always going to be applications where you don't realize that those applications are even possible, or you don't realize that there's a completely different way of doing it. And so that was, like, that ended up just not succeeding, and the full programmable approach ended up succeeding.

[00:38:52] There were also other really interesting ones in the early days, right? Like, I remember, I mean, BitShares, BitShares launched a little bit after, right? And I always, like, I have a bit of a soft spot for BitShares, I think, because, I mean, first of all, like, to me, I, like, I think a lot of Dan Larimer's entourage are just total snakes. But I think I've always thought that Dan Larimer felt like a really, actually interesting person. I mean, he was clearly very philosophical, like he actually wanted to make the world a more free place.

[00:39:28] And I also respected them for doing innovation on the, like, economics and mechanism design side, right, basically. Yeah. Like, one thing... That they did was the whole, like, ProtoShares and AngelShares thing, where, like, anyone could launch, basically, a network that's part of their network, and then, effectively, if, like, the proto and angel shares holders have 20% of your thing, then, like, it's this sort of one community that all shills and supports each other's work together. Then, like, inside of, I mean, first BitShares, then EOS, there was the whole delegated proof of stake thing.

[00:40:08] And, like, on the one hand, like, I always criticized it really hard, right, and I wrote all these articles, like, basically saying that coin voting is bad, and that coin voting is broken. But at the same time, like, I really respect them for trying something, right? I, yeah, like, I respect how they managed to have all of these different nodes. Like, there was that event later, I know, there was, like, EOS New York, EOS Shanghai, like, EOS Hong Kong, all these different nodes that were actually communities that were trying to, you know, support development, support, like, marketing for EOS, so, like, to me, the, like, the economics were always one of the big weaknesses of, I guess, what you might call, you know, the open source free software, like, freedom friendly software kind of world, right, which is basically that, like, traditional software, like, it has business models, but those business models depend on having walled gardens, having a lock-in, having a lot of control over the user.

[00:41:07] And if you don't have those things, then, you know, what you're building effectively is a pure public good, right? It's non-excludable, non-rivalrous, and, you know, in the traditional economics textbooks, the only way to fund public goods is taxation, and of course, you know, as libertarians, we don't like taxation, at least, you know, from the government, right? And so, you know, we, like, I really, this is, like, it feels like a lot of people sometimes, like, think that I'm this, like, crazy socialist, because I talk about this problem so much, right?

[00:41:41] But, like, you know, like, to me, like, the motivation was always, like, I want business models for things that respect people's freedom and, like, don't try to create, like, corporate lock-in, right? And, like, if we can solve that problem in a generalized way, then, like, it basically means that the quality of all of this stuff that we depend on, you know, including zero knowledge proofs, including, you know, like, basic protocols, software, cryptography, everything is just going to be so much better, and we're actually going to, like, stand a chance at competing with, you know, the major banks and Venmo and, you know, like, Alipay and so on and so on.

[00:42:26] So, I respected Dan Larimer for actually trying, right? And then, and I felt like, you know, like, I guess that BitShares and then EOS were probably the big one from a, in the, I guess, maybe 2015 to 2018 era, and then, you know, obviously others started showing up later as well.

[00:42:48] Vlad Costea: It's funny that you foreshadow my upcoming question, because I was going to ask you about Ethereum killers, right? You launched the network, I think it went live in 2015, you're going to turn 10 years old very soon, and then in 2016, you had this rocky moment when you had the DAO hack, and you had to make this political decision to basically return the funds, and that caused, like, a community split. You still have Ethereum Classic today. They're probably still not happy about some stuff, but regardless, in 2017, Ethereum was established as this major asset, the number two that almost flipped Bitcoin, you know?

[00:43:29] And what happened after is that a lot of people were trying to create a better Ethereum. So you had NEO, you had NEM, you had EOS, the one that did an ICO for an entire year. You had a lot of them. It's very hard for me to make a complete list of all the ones that were trying to come for Ethereum by promising that they offer more expressive smart contracting or programming in multiple languages or whatever, but none of them gained the network effect. And even today, you're competing, and there are some people in the chat mentioning Solana, you're competing with Polkadot, you're competing with, I guess, Avalanche.

[00:44:13] I'm not sure if it's a direct competitor, but it tries to do sort of the same. There's also Tron. It's a weird story. That guy, Justin Sun, tried to be you, like, in creepy ways. And yet, Ethereum is still holding its position and it still has users. It still has investors who build stuff. And it's curious to me that you're maintaining this, okay? Because you started out as the underdog of this whole battle. I think maybe you were not underfunded, but you were not the most experienced team of developers.

[00:44:49] And then you grew the chain and then you had all of these contenders trying to take Ethereum's position, but they did not succeed, even though they claimed some sort of superiority. And I wonder, what's the secret for this? How do you get people to stay, even if there is something that claims to be technologically better?

[00:45:15] Vitalik Buterin: I think the way that both people working on Ethereum and people who stay on Ethereum tend to talk about it is like, Ethereum is the one other than Bitcoin that actually has a credible story, that it has a high level of decentralization. And this is something that we hear all the time. Basically, if Vitalik hates you're safe on Ethereum. If this other person hates you, are you necessarily safe on their chain, right? And a lot of those other chains, they do make DAO fork-equivalent things for all kinds of different situations.

[00:46:05] I think I saw Hyperliquid, I believe, recently did a reversion to get some money back. But then it's like they did that for some things, but then they did not do that for other things.

[00:46:24] So Ethereum is the one where people actually get trusted not to rug you in one of those ways. And well, what was interesting about the DAO fork is that I think a lot of people thought at the time that it was a precedent. But then in 2017 and 2018, we did also get some counter precedents. We got the Parity wallet hack. It happened twice. There were a couple of other hacks. There were a lot of situations where there were hundreds of thousands of ETH that were lost.

[00:46:56] And there was a question of will Ethereum do a hard fork to recover those funds? And we could have, right? Recovering money that's lost in some sense even feels like a more innocuous thing than breaking, taking money from one place to moving it to another place. It feels like the thing that has no losers. But we ended up not doing it. And I think when I say we, I don't mean the foundation, I mean the whole ecosystem. There were even carbon votes, like ETH holder votes at the time.

[00:47:34] And those were heavily opposed to doing those kinds of recoveries. And since then, Ethereum hasn't really disrespected user immutability at all. Possibly the worst thing that might have happened were some contract with $10 in it five years ago that stopped working because of some hard fork that had to change some gas costs to protect the whole chain against denial of service attacks. I'm actually not even sure. When we did those gas cost increases, we did very carefully look through the whole ecosystem and see, is there anyone that's affected?

[00:48:24] There were a lot of analyses. And so we knew that the downside was basically none or almost none. But theoretically, there might have been one very tiny thing. But that's basically it. And then on these other chains, it's regular that there's some trader that loses $10 million because some other trader has even a strategy where it's even debatable whether or not it's legitimate. And then, hey, if you could get the big guys to revert for you, then you could get reverted. So that was one thing. Also, the multi-client ecosystem means that Ethereum actually can survive without the foundation.

[00:49:07] If we had to ask, what are the ecosystems that can totally survive and keep going without a hiccup, maybe slower but without a hiccup if their foundation suddenly disappears? Bitcoin, definitely. And I think Ethereum has gotten to that point. But which other ones? So that was one. And then there's a strong culture of caring about if we do this L1 thing, will that actually interfere with people's ability to run nodes? There's a culture of trying to build privacy-related things, and Tornado Cash happened on Ethereum.

[00:49:50] And then, of course, Railgun and Privacy Pools happened on Ethereum. Now, Tornado Cash is back on Ethereum. So there is this deep culture of caring about these things. And generally, Ethereum killers don't try to compete with Ethereum for that segment. They basically try to compete with Ethereum along with what they consider the pragmatist axis, which is basically saying, hey, high levels of decentralization are overrated. Let's instead go for higher scale and we're going to have 20 or 30 major nodes. And so they do deliver on higher scale.

[00:50:28] So they deliver less than they promise often. I think all of these chains end up like they promise 10,000 TPS because that's what you could do in a test environment but then in a live environment. But they pretty much all end up topping out in the hundreds of TPS.

[00:50:49] Vlad Costea: I don't think they have so many users in the first place.

[00:50:53] Vitalik Buterin: Right. Exactly. And a lot of the usage is subsidized by the foundations. A lot of it is very short term things. But the kinds of people and applications that they get, they do tend to be people who care about decentralization less, care about open source less, even care about security practices less. And the famous quote from Kyle Samani is like, "I value speed more, tbh." And so basically, for those kinds of users, there's definitely a lot of non-Ethereum options and there's even market segments where they're winning.

[00:51:43] And I think that's fine. And the way that Ethereum has historically competed for that segment basically is through L2s. And L2s have done quite well. And Base has gone up to, it's like 150 TPS now. With the Pectra hard fork, the amount of blob space, the amount of data space for L2s is going to go up by 2x. And so Base and the others are going to go up even faster. So this was also another one of those arguments for the layer two approach.

[00:52:25] There's things that you can do on layer one, and then there's things that you can do on layer two. And on layer two, you have a little bit less decentralization, but you can do this smart contract and proof system stuff to just basically make it be as still as self sovereign as possible. And they're doing the best job of that they can. So I think that's fine.

[00:52:54] Vlad Costea: Yeah, you opened lots of, you made some references that basically foreshadow topics that I want to ask you about. There's Tornado Cash, there's the layer one versus layer two situation. Because I remember when Ethereum was, you had lots of crazy ideas. At one point you said you can use Bitcoin Cash blocks to offload data from Ethereum. You also wanted to do sharding, which I don't think went too far. But there are some alternatives to Ethereum that tried sharding. But anyway, before we explore these topics, I got to present two more sponsors.

[00:53:29] One of them is SideShift.ai. So if you're listening to this and you want to buy some Ethereum, you can actually do that on SideShift in a way that requires no registration. And let's say you have Bitcoin and you want to swap it for Ethereum because you want to make Ethereum go up in terms of BTC. You can do that on SideShift. Or if you don't believe in Ethereum anymore and you want to buy something else like Trump meme coins or whatever, you can still do that on SideShift.

[00:53:57] But usually I tell people when they get paid in stablecoins to use SideShift to get free market money. I think that's a more honorable way of accessing the service. But Andreas Brekken, who is the CEO of SideShift, says hello. And also I know that he was one of the biggest contributors to your list of Craig Wright lies on GitHub. He was sending articles and submitting pull requests. And I think that's very cool.

[00:54:23] Vitalik Buterin: Right. Well, do you know the story of that list? Like the list is actually his list, right? And basically, yeah, the reason why it sort of ended up being my list is because I made a PR to his list to add a few examples. And then I think he got a takedown notice from Craig Wright. And so he did not feel like he wanted to, like he did not have the legal muscle to properly fight it off. And so I believe he took it down. But then those same lawyers, of course, that came for me.

[00:55:01] And like, I actually did not even realize at the time that just making a pull request means that you're making a copy of the GitHub repo within your own GitHub. And so they came for me. And then, of course, with Ethereum Foundation lawyers, like I decided like, hey, no, you know, we're going to fight this. And actually, they never actually came to a lawsuit. I think they were too intimidated to try. And so, like, that copy of the list, which is originally his list, like basically, yeah, on GitHub slash vbuterin slash, I think, cult-of-craig, I forget if there's dashes or not, like that, it ends up being one of the last copies of it.

[00:55:43] But it's, yeah, one of the biggest and most fascinating documents and I mean, Craig Wright is just such a character. And I mean, at the time, I think, convincing as many people as possible that like he actually is a fraud was obviously really important because the guy was just like, causing so much damage and just like distracting so much effort toward all of these pointless and even fraudulent things. But now, he's quiet. And of course, you know, the courts have ordered him to be even more quiet. So I guess that was about one.

[00:56:30] Vlad Costea: This is something else for which you don't get much credit, but you're responsible for it because you said in 2018, I think it was on the stage of Deconomy in Korea, that you don't want this guy to be invited anymore. And you sort of canceled him from all crypto events. And he was only speaking at CoinGeek-sponsored conferences or whatever. So when you did that, it had an impact across the whole industry. He was no longer invited to speak. Before that, he was sort of like a curiosity.

[00:57:03] People were curious to listen to him and see if he has any compelling arguments. After you spoke against him, I haven't seen him speaking at major events anymore.

[00:57:17] Vitalik Buterin: Yeah, I'm trying to think. I mean, now that I think about it, yeah, you're right. I don't think he's been at a non-CoinGeek thing since 2018.

[00:57:28] Vlad Costea: So I guess you didn't even realize it, but it's sort of obvious.

[00:57:36] Vitalik Buterin: I don't know about you. So who are the biggest fun characters in Bitcoin land these days? Are there any that kind of measure up to all of the crazy stuff that happened in the late 2010s?

[00:57:52] Vlad Costea: No, not really. I don't think we have a Mircea Popescu or whatever.

[00:57:59] Vitalik Buterin: Oh, right. I forgot about good old [unclear: Mircea]. I forgot him, too. Right. He also offered to, I think he offered to like buy, anyone, like he basically shorted ETH by making a public offer to buy people's ETH, or to sell people ETH at [unclear: $5,000 to one], despite not having any. I'm not sure if anyone took him up on his offer, because I think people didn't really even trust him. But his stuff was so crazy.

[00:58:36] Vlad Costea: But I had what's his name, Daniel Krawisz, on the show like a couple of weeks ago. And he still believes that Craig Wright is Satoshi. And I asked him, you know, did he prove anything to you? Did he show you anything compelling? Was he able to win a court case? And he said no. But he taught me stuff about Bitcoin that I previously did not know. And I was like, what didn't you know, this guy? So I guess, you know, Daniel, he wrote some of the best articles about Bitcoin in 2014.

[00:59:06] Vitalik Buterin: Yeah. You know, that kind of reminds me a bit. I mean, I saw this like a very weird tweet a couple of weeks ago. It was dating advice for right leaning people in Europe. And this guy is like very crazy. Right. But the thing that he argued was like, hey, you know, if it becomes clear to a woman that like you support, you know, like right-leaning crazy stuff, then like she is going to totally nope out of there.

[00:59:38] And his argument was that you should first ask her who Otto von Bismarck is. And like most Europeans, I like don't really know much about him. I guess like no one in any country on average knows that much about any history. But like basically, if you like show to her that like you know more things about Europe than she does, then like she would become more open-minded. And I mean, this stuff is like totally crazy. Right. But I mean, I definitely don't support any of those manipulative styles.

[01:00:19] I'm not sure if they even succeed. Right. But like, I guess it feels like teaching someone else something that they don't know about something that they care about is like a common idea, I guess. So like, you could call it a [unclear: scammer] tactic or one of these sort of black hat tactics for impressing people. So, yeah, it's something you definitely want to be careful about.

[01:00:51] Vlad Costea: Yeah. And once again, you did a pretty good job with this. And I got to plug this. Let me finish up with the sponsors and then we can have a free-flowing conversation. Noones.com is a website which has a peer-to-peer marketplace, which tries to onboard people from the Global South. And the CEO, Ray Youssef, says hello, by the way. And he also says he owes you an apology. And also he wants to have you for a workout to do chest or legs together.

[01:01:21] Vitalik Buterin: OK. OK. I will keep that in mind.

[01:01:26] Vlad Costea: And there's also Bitcoin.com News. And for a few years, Bitcoin.com was a Bitcoin Cash website. And it's my duty to inform people that now they know the difference between Bitcoin and Bitcoin Cash. And they followed the incentives of the market. And if you open Bitcoin.com today, it's more centered around BTC. And they have pretty good journalism. If the listeners have any time to read news, I think it's pretty balanced. I would dare say it's more balanced than Bitcoin Magazine, which is maybe too Trump-centric.

[01:02:01] But anyway, check it out. Also, I should ask you about that. How do you feel that Bitcoin Magazine is now like a Trump publication?

[01:02:12] Vitalik Buterin: Yeah, it was pretty crazy to see the evolution of that whole thing. It definitely became Bitcoin maximalist pretty quickly. Then it became a Trump thing quickly. I forgot, Bitcoin Magazine, are they also the ones that do the Bitcoin 2024 conference?

[01:02:31] Vlad Costea: Yeah. I guess you were one of them like two years ago, right?

[01:02:38] Vitalik Buterin: I actually don't think I was. The closest was there was a Bitcoin 2021 in Miami. And like, I didn't go to the conference, but I went to like some surrounding like events and just talking to people.

[01:02:53] Vlad Costea: I think David Bailey posted a picture of you attending and that's why I remember.

[01:02:58] Vitalik Buterin: Right. Okay. I mean, it was while I attended something, like, definitely not a big Bitcoin event. But I saw him like also on Twitter. I don't know if it was them or another one, but like it was that there was like an article like Russia legalizes crypto mining.

[01:03:13] And then they had this like very cheerful congratulatory thing of like Vladimir Putin holding up a glass of [unclear: vodka]. I was like, Oh God, you know, like it's like, do you guys even remember what freedom is? And yeah, it's it's pretty wild.

[01:03:30] Vlad Costea: Yeah. I mean, I look at your style of journalism. It was mostly technical and also some travel stuff. Like you went to Room 77 in Berlin. You went to Israel a few times to attend some hubs in there. And Bitcoin Magazine today is very different. Like I read your article about announcing Ethereum and it was not. How should I put it? You are not selling the token. You're just explaining what this is, why you're launching it, why it makes sense. And I don't know. It changed a lot.

[01:04:04] I think it changed the ownership twice after you sold it.

[01:04:09] Vitalik Buterin: Okay, I did not know that.

[01:04:11] Vlad Costea: But I think it was Charlie Shrem that bought it from you and then it was David Bailey.

[01:04:17] Vitalik Buterin: Right.

[01:04:19] Vlad Costea: I hold some copies, some old copies of Bitcoin magazine. I don't have them here, but it's interesting that there was clearly a shift. And I used to work for them, by the way. I wrote for them for about a year, wrote about 50 articles.

[01:04:35] Vitalik Buterin: Yeah. It feels like there's been a lot of these bigger political shifts that have happened. Definitely a lot in libertarian lands. And I think crypto was part of libertarian land from the very beginning. And so it had its own mirror image of basically every part of that. And, you know, you see these days, there's some libertarian parties arguing that the government should ban synthetic meat. And a lot of them are saying all kinds of things that I personally don't consider to be very libertarian. So people change a lot.

[01:05:15] There is a lot of drifts. There's a lot of intersection between that and Bitcoin. So it's, yeah, you know, you definitely don't want... just like someone saying and doing things during one year is definitely no indication that they're going to do the same things five or 10 years in the future.

[01:05:41] Vlad Costea: Yeah. You also have a question which I found interesting from a guy who's named EarlyNFT.bit. He's into Namecoin stuff. And he says that on November 27, 2013, someone from Ethereum Foundation registered the domain name ethereum.org and set up the domain tothemoon.ethereum.org. The very next day, the domain tothemoon.bit was registered on Namecoin, even though ethereum.bit would not be registered until January of 2014. "To the moon" wasn't a very popular saying at the time, so it's unlikely that the two registrations are not from the same individual.

[01:06:18] Would it be too forward to ask if Vitalik personally registered these names? I hold the deeds to both.

[01:06:25] Vitalik Buterin: Yeah, unfortunately, that was not us.

[01:06:29] Vlad Costea: OK. He said he holds the deeds to both Namecoin records and would be happy to reunite them with their creator at no cost.

[01:06:37] Vitalik Buterin: OK. Yeah, I appreciate that. [unclear: We can follow up.]

[01:06:43] Vlad Costea: If the person who registered tothemoon on Ethereum is listening to this, then you can get the Namecoin asset too. Perfect.

[01:06:56] Yeah. So let's get back to the conversation about Ethereum and scaling the base layer, because I remember you had lots of proposals and approaches. In the end, you settled for layer twos and some people were unhappy and they just became nihilistic, went to Solana or whatever, said, oh, we just want to do meme coins on the base layer because it's simpler. Or I don't know exactly the consideration. Maybe it was fees. And I got to ask you, why did you decide to go to layer twos, even though there seemed to be like sort of resistance to it?

[01:07:33] Because this was the Bitcoin approach to do layer twos, but Ethereum was going to scale on chain also.

[01:07:40] Vitalik Buterin: Yeah. So basically, we made that decision around late 2019. And the reasoning was that our development effort as the Ethereum Foundation was limited. We had limited resources, we had limited people, and also all of our team was like full speed ahead trying to figure out the merge. And the merge was like a really big [unclear: grand] project that, of course, lots of people were saying it would never happen at all. But eventually it did end up happening. It took a long time to get there. And in 2019, we basically just did not want to distract people from working on the merge.

[01:08:24] And so we did account abstraction as an ERC, so like a second layer standard that people could opt into instead of being a protocol feature. Though now actually with 7701 and 7702, it's going back in the direction of sort of coming back to being a direct part of the L1. And then for scaling, similarly, we decided that given that the L1 R&D's time is so concentrated on the merge and other things. We just, like, we did not have the resources to do it directly. And so we just did the pragmatic thing and said, like, okay, let's invite other people in the ecosystem to do it.

[01:09:15] And let's basically do the equivalent of sharding, but where, you know, instead of the shards being a protocol feature, they're like a thing that other people could create. And then you would have fraud proofs, zero-knowledge proofs, verify that whatever is happening in those layer twos actually is correct. And so people would be able to, you know, get the benefits of, like, being connected to Ethereum and being, like, fully self-sovereign and all of those things in a way that pushes the TPS much higher, right?

[01:09:52] And of course, you know, it definitely took a while, but over the next four or five years, that's basically happened.

[01:10:04] Vlad Costea: Here's a question that's popular among Bitcoin circles, and people like to dunk on Ethereum because of this. What kind of hardware does it take to validate Ethereum to run a node? So

[01:10:17] Vitalik Buterin: Today, you can absolutely do it on a consumer laptop. So the laptop that I'm using to talk to you right now, it's Dell XPS 15. It's totally managed to sync and run a Reth node. And actually, yeah, it managed to do an archive sync, which actually means that you're not just downloading everything since genesis, but you're actually directly verifying every single transaction since genesis, and it managed to do that sync in four days. So right now, it's, like, very possible, I think. But this topic is interesting because, I mean, I think you've probably seen, but we're looking to, like, there's a lot of momentum right now to also increase the scale of the L1 as well, right?

[01:11:11] And there's a lot of these interesting questions of like, well, you know, what is the role of things like full nodes even going to be going forward, right? And so there's this interesting philosophical rabbit hole that's being, I think, re-explored, right? And, like, basically, yeah, you know, the ultimate goal, right, I think, is we want as many users as possible to be interacting with the chain in such a way that they actually are verifying the rules of the chain. And the reason why this is important is, I mean, I had this kind of, like, mini story in one of my posts a couple of years ago.

[01:11:54] I think it was on, like, the limits to scalability. Let me try to quickly find it. I can see if the story is here. I'll just read it out. So this is, imagine, like, this story would be told in one of these, like, highly scalable chains where no one's running full nodes. "At 2:35 a.m., you receive an emergency call from your partner on the opposite side of the world who helps run your mining pool," or it could be a staking pool. "Since about 14 minutes ago, your partner tells you, your pool and a few others split off from the main chain, which still carries 79% of the network.

[01:12:34] According to your node, the majority chain's blocks are invalid. There's a balance error: the key block appeared to erroneously assign 4.5 million extra coins to an unknown address. An hour later, you're in a Telegram chat with the two other small pools who were caught blindsided just as you were, as well as some block explorers and exchanges. You finally see someone paste a link to a tweet containing a published message. 'Announcing new on-chain sustainable protocol development fund,' the tweet begins. By the morning, arguments on Twitter and on the one community forum that was not censoring the discussion are everywhere.

[01:13:08] But by then, a significant part of the 4.5 billion coins had been converted on-chain to other assets, and billions of dollars of DeFi transactions had taken place. 79% of the consensus nodes and all the major block explorers and endpoints for light wallets were following this new chain. Perhaps a new fund will fund some developments, or perhaps it will all be embezzled by the leading pools and exchanges and their cronies. But regardless of how it turns out, the fund is for all intents and purposes a fait accompli, and regular users have no way to fight back."

[01:13:38] So this is kind of the dystopia scenario that we're trying to get away from. Basically a scenario where a majority of the mining power or stake power can just push a change through the protocol. Could be creating new coins, could be changing the rules, could be deleting some contracts, whatever. And because regular users are not actually validating the chain, everyone just accepts their new blockchain by default. So this is what we don't want. And I think in Ethereum, we're 100% set in stone that we do not want a future where that kind of scenario is possible.

[01:14:19] And so we want to do everything to fight against it. So with the technology of the 2010s, the only way to fight against this kind of thing is basically for as large as possible a set of users to actually run their own full node directly. But in the 2020s, the game changed in a lot of ways. So basically, we actually have a whole bunch of technologies that basically all have this flavor of one actor spends more resources to add some kind of extra information. And in exchange, the process of verifying the block for everyone else becomes much easier.

[01:15:00] So obviously, again, ZK-SNARKs are one of them. Actually, stateless clients are another example. Basically, what happens there is you can have one node that's creating the block also add on Merkle branches for everything that they've accessed. And then all of the other nodes that are verifying, they would just verify everything through those Merkle branches. And so they would require somewhat more bandwidth, but they would not require any hard disk space. And so they would be able to sync instantly. It would not take up space like a much larger number of just existing computers would be able to do it.

[01:15:40] And then, of course, with ZK-SNARKs, one node creates a block, and then for everyone verifying it just becomes trivial. So to me, possibly even the bigger embarrassment right now with Ethereum is one is, of course, that there is a relatively small number of people running full nodes. But the other is that in wallets, there's a large number of users that are not even doing light verification. They're basically just fully trusting RPCs. And I think even in Bitcoin, I think a pretty small portion of users are actually directly running fully verifying Bitcoin full nodes.

[01:16:29] Vlad Costea: Last time I checked, there were like 15,000. And I don't know, there may be 100,000 users of the main chain every day.

[01:16:38] Vitalik Buterin: Right. Yeah, so 15,000 is still good, right? But I think what we want to get to is we want to get to a world where the average MetaMask user, like within MetaMask, you just have an Ethereum node. And that Ethereum node is actually fully verifying the Ethereum chain, right? And of course, to do that, you would be able to do it with a ZK-SNARK, right? And so with a SNARK, basically one person creates a SNARK. It proves that the whole chain is valid. And then any other user would be able to just verify a proof and they know that the chain is correct, right?

[01:17:12] And then we also came up with this technology called data availability sampling, which verifies that not only is the data valid, but the data also has actually been published to the internet, which is important, right? Because that's another kind of invalidity that cryptography is never going to capture. So that's some, I don't know if also you saw this, but recently I published this Eth Magicians post, it's called "A maximally simple L1 privacy roadmap." And a big part of it that I talk about is basically how do we make things like Tornado Cash and Railgun a default part of people's user experiences.

[01:17:54] And that just means incorporating them into existing wallets, like using private sends by default. But another big part of it also is the other big reason to use a full node, which is privacy, right? Because if you use an RPC, then first of all, you're trusting the RPC node to tell you information and to be correct, but also you're trusting that RPC node to not log your private data, right? It's like if you're doing some politically sensitive donation and okay, maybe you use Tornado, you use Railgun, and so there's no on-chain evidence, but then if you're going through an RPC node, then whoever controls the RPC node, they see what requests you're making, they see what transactions you're sending, they see everything, right?

[01:18:41] And so the question is how do we get around that, right? And so we're starting to also think about various privacy technologies to make it possible to do reads privately, right? So I guess the big change that we're trying to adapt to is that there is all of these new technologies, all of these new forms of cryptography, including SNARKs, also including PIR, including a lot of things, right? They all have this property that they basically allow a little guy to connect to a big guy, but at the same time, get all of the same guarantees without doing all of the big stuff themselves, right?

[01:19:23] And that didn't exist in the 2010s, right? And a lot of the mentality around full nodes, like if... It was created in an environment where like that, like that totally new option did not exist, right? And so now we want to... Like Ethereum is going through this process where we're rethinking, you know, one, we want verification to be available to everyone, and we want everyone to be verified by default. And you have ZK-SNARKs, you know, we have data availability sampling, we have all these things, that's good, right?

[01:19:55] Two is, we also want participation in consensus to be as distributed as possible, right? And then there's the question of, like, what is that... Does that mean decentralized stake pools? Does that mean solo stakers? Does that mean some combination of them? How do we make either decentralized stake pools or solo stakers competitive with the big pools for as many people as possible, right? So that's also another discussion, and then there's some of these kind of heavier tasks, right? Because the price of the whole ZK-SNARK thing is like, it's basically like, let's say, 10,000 times cheaper to verify a block, but on the other hand, some one person needs to do a hundred times more work to generate the proof, right?

[01:20:46] And then who does that work? That work's going to take more effort than one single computer. How do we ensure that that's still going to be, like, globally distributed so we can still rely on at least one of those to continue existing and making proofs, even in some pretty exceptional cases, right? So there's... And like, I think the other thing that's important, right, is that had we said layer one is never going to scale, like everything goes on layer twos, we would have basically had the same debate, right?

[01:21:15] Because, well, instead of having that same debate with regard to Ethereum, we would have had that same debate with regard to, you know, like Base, right? Because it's like, even if theoretically you have all of these proof mechanisms saying, like, on Base, like, whatever happens on Base, you're safe, like, as a user, you still need the practical ability to ensure censorship resistance, you still need the practical ability to ensure that if the Base nodes go down, you can still take your coins out, you still need all these practical abilities, and so, like, basically the exact same kind of thing would be happening, right?

[01:21:49] So there's, yeah, I mean, there's a lot of really interesting discussion happening on those topics right now. I guess, I mean, we could call it, you can call it Ethereum's scaling debate, though I feel like it's, like, less of a debate and more collaborative, and hopefully, yeah, with the newer cryptography, we'll actually be able to address all the different types of people's concerns at the same time, but, you know, this is, like, the thing that's happening right now.

[01:22:26] Vlad Costea: Yeah, this is why I have respect for your work on Ethereum, because I don't think there's any conversation in so-called Ethereum killers about getting rid of RPCs, and they're just using servers, because that basically creates points of failure and also makes it less censorship resistant. You can have a few of these servers basically denying service to some countries or deciding that some transactions are non-standard or undesirable or whatever, or they come from certain addresses and they're not going to be broadcast. And that's not something that you want to have in something which is supposed to be sovereign and global and neutral and everything else that we claim to care about in Bitcoin sometimes, because I get disillusioned that there are times when I realize that some of these talking points were just larping to make the number go up.

[01:23:23] But I remember Eli Ben-Sasson was probably the first person to talk about this in 2013. He's a co-founder of Zcash and now StarkWare. And he was talking about doing instant syncs of the full node just by verifying a ZK proof. And that has been the dream for like a decade. And it's cool that Ethereum is embracing this approach. And on the topic of ZK stuff, I know that Ethereum has paid through the foundation a lot of the research that basically created the rollups, and also the ZK-SNARKs became more advanced.

[01:24:02] I think Zcash had like five iterations. Right now, they finally got rid of the trusted setup. And they also have smaller transactions with Halo 2 and the Orchard pool. And it's pretty cool. And I was going to ask, what's the relationship between Ethereum and Zcash? Because as far as I know, Zcash was like this experimental lab for Bitcoin to bring privacy to it. And I don't see it coming anymore.

[01:24:31] Vitalik Buterin: Yeah, and Zcash still exists. It's still around. It has a community. And we've collaborated on cryptography quite a bit. We've used some. And obviously Ethereum is fully dependent on that, or at least Ethereum's privacy side is fully dependent on technology that they've significantly helped to pioneer. I mean, we've also given them advice on proof of stake related things. So there's definitely been like some very positive interactions between those two communities for quite a while.

[01:25:07] Vlad Costea: That was very diplomatic of you. Well, what do you think about Zcash nowadays? Do you think it still has chances to recover or was it sort of abandoned by the investors and everyone was bullish on it?

[01:25:22] Vitalik Buterin: I think, I mean, it was definitely not, it definitely hasn't been abandoned by its team, obviously, right? People are still working hard on pushing it. I think the challenge that it's had is obviously the challenge of the coin retaining value. And I mean, that's a hard thing for a lot of projects, right? It's like one of those things in the crypto space is like sometimes technical value and economic value can be just so disconnected from each other. I mean, the, like, yeah, the position that they've put for themselves, right, is basically trying to be a Bitcoin-like thing, but then at the same time becoming the standard bearer of privacy.

[01:26:26] It's a challenging thing to succeed at, right? Because I think if you want a sort of Bitcoin-like legitimacy, the biggest part of it is not technical, it's social, right? And a big part of it is just like this moat of having an established community that's a history of not making crazy decisions and this history of people valuing your thing. So it's definitely a challenging game that they're playing, though I definitely wish them the best, and I definitely really hope that they succeed because I think a world where people who contribute to really important technology succeed, including financially, is definitely a better world.

[01:27:14] Vlad Costea: Yeah, and I think without Zcash, correct me if I'm wrong, I don't think Railgun or Tornado Cash would be possible.

[01:27:23] Vitalik Buterin: Correct. [unclear: No, they would not.]

[01:27:26] Vlad Costea: What do you think about the situation of the Tornado Cash and Samurai developers?

[01:27:33] Vitalik Buterin: Yeah, I mean, it's definitely crazy that, you know, the government's actually started going after developers in that particular case, right? It's like the sort of thing where there's a large category of software where, I guess, once you start opening up that Pandora's box, it just becomes risky. And that action probably made the U.S. A significantly less attractive destination for many different kinds of software developments. I feel like the really strong advantage that the U.S. Has as a jurisdiction is the First Amendment and all of the strong history of protections that are associated with it, right?

[01:28:30] And so if you weaken that, I mean, even for code, these are precedents that can easily become abused in all kinds of ways. I mean, obviously, I think the Tornado Cash thing itself is an abuse because I think privacy is good for the world, right? And I think even if you don't believe privacy is good for the world, I think there's plenty of other ways to go after it that don't involve going after developers. But then separately, I believe that privacy is good and we should not go after it.

[01:29:10] Basically, my general view is that to the extent that we do need to go after bad actors, which we do. And I think like North Korea sending thousands of soldiers to attack Ukraine is bad, right? And if there is ways to go after that, then we should. But basically, I think that should happen at the layer of goods and services rather than at the layer of money as much as possible. And the layer of goods and services is even the easier one, it's going to be the easier one in the future, right?

[01:29:53] Just because the physical world is just inherently much more transparent, right? I think if we can keep the money layer as free as possible, then, to me, that feels like the right balance or distribution of responsibilities.

[01:30:15] Vlad Costea: Yeah, for the longest time in Bitcoin, the holy grail has been that of creating side chain for scaling and figuring out a way to not have a federation or not have a trusted setup. And in Ethereum, I think you had Plasma, you had, what was the name of the Lightning Network equivalent? Raiden. Raiden, yeah, like the God of Thunder from Mortal Kombat. Yeah, that one. And there was a lot of experimentation that led up to the roll ups. And I think it's been a few years until you came up with that and you decided that it's really good.

[01:30:57] I usually ask people this, and I'm curious to know your distinction between them. How do you define a roll up as compared to a sidechain?

[01:31:11] Vitalik Buterin: I think the difference is in verification, right? So a sidechain is just, it's a loosely defined term, right? It's basically just a chain that has some kind of connection to a parent chain. A roll up is, to me, it's specifically a chain where all of the underlying data is posted to the parent chain as opposed to being somewhere else. And the reason why data being posted to the parent chain is important is that it's like actually a critical part of the security property. Like basically, yeah, if you imagine, you know, the operator of the roll up, so just like suddenly disappearing, right?

[01:31:58] The whole point is that the safety of your coins inside of a roll up are not dependent on anything to do with the roll ups like operator, ecosystem, multisig, coin holders, whatever, they're only dependent on the underlying chain, right? And so if the operator disappears, then you need some way to get your coins out, right? And if you don't have the data, then you don't have a way of actually doing that. And you don't have a way of actually proving that you have those coins. And so now there are other ways to achieve like a similar type of guarantee, right?

[01:32:34] So Plasma is the other really big category. And now we have Intmax, which is doing this like interesting type of hybrid roll up Plasma for privacy. So, but, you know, so with the data published on chain, you have this like really strong security guarantee that basically if you have a coin inside of a roll up, then if it's like actually a full rollup and [unclear: the stream, we also take it off] and so on, and of course, the security of the proof system is correct, then you have a guarantee that you can turn your coin inside the rollup into a coin on the underlying chain if you want to.

[01:33:18] Vlad Costea: What do you think about drivechains on Bitcoin? I basically mentioned the topic previously, but I didn't ask you exactly what you think about the security implications of it. You're going to have the miners securing these chains. So you trust them with escrowing the funds.

[01:33:36] Vitalik Buterin: Right. I think a big part of the philosophy, like to me, has always been that like there's this higher level of trust in the miners, right? Like basically the way that I remember the design is like, you know, you have like basically different kind of tiers of block sizes. And then like as a user, you can verify some of the tiers or you can also choose to not verify higher tiers. But then the question is like, well, what happens if there actually is a 51% attack?

[01:34:10] Right. And if there's a 51% attack, then again, like the thing that you do not want is you do not want the 51% attackers to like actually be able to like steal the coins from inside of like any of these constructions and then turn them into like valid coins on whatever is the underlying chain. And so here it's this framework where like what even is the, you know, sort of the L1 versus what is higher layers, that kind of gets a bit blurred, which is interesting.

[01:34:52] I mean, there's like something that's elegant to that approach. There's also something where there's an aspect where like I would just prefer knowing like this particular thing is the thing where we agree on what the validity rules are and like even 51% of miners can't break them. And then we try to scale past that in ways that 51% of miners also can't break.

[01:35:27] Vlad Costea: Some people in the chat are curious about this, and I think it's a legit question. Was the transition of Ethereum from proof of work to proof of stake purely ideological in the sense that you wanted to have a lower energy consumption and basically escape the Greenpeace campaign that was run against Bitcoin? Or is there something more to it?

[01:35:50] Vitalik Buterin: So I think there's a few arguments for proof of stake, right? So, I mean, the environmental thing is one, but then also you need to keep in mind that like the benefits of not consuming energy are something that also benefits the ecosystem because like the ecosystem doesn't have to pay for that energy in the form of higher emissions, right, like issuance. So like there's this big problem that everyone's thinking about, right, which is basically, you know, once issuance runs out, then how do we pay for security?

[01:36:26] And like there's theoretical arguments for why proof of stake can give you a higher economic level of security for the same, a significantly higher level of economic security for the same budget. So that was also one of the reasons. And then another reason is that proof of stake has this concept of finality, right, basically where after a very short time, a block can get to the point where like basically enough stakers have signed onto it in such a way that if the chain ever deviates and like reverts that block and goes in some different direction, then like there would be evidence by which all of those stakers would basically lose all of their coins, right?

[01:37:08] And so you have like a very high economic level of security that appears like very quickly after a block. And that's like a useful property that a lot of people care about. So I think it's probably a combination of those three things.

[01:37:26] Vlad Costea: I want to get to the topic of privacy, but before that, I'll take a couple more questions that I think are interesting in the chat. Robin Linus, the creator of BitVM, actually tuned in, and I'm really happy that he's listening. He says, "I'm happy that he's heard of BitVM. Would be interesting to hear his take on zkCoin slash ZKCSV," which is client-side validation. It's a paper that he published. I'm not sure if you read it or if you're curious to read it.

[01:37:55] Vitalik Buterin: I have not. ZKCSV, let's see. So it's co-authored by Liam Eagen and Robin Linus and Jonas Nick. An intellectual descendant of earlier embedded consensus protocols. And then basically, yeah, so the idea is like you have client-side validation, but then, I'm assuming, I'm just kind of reverse engineering this, that it's like you can client-side validate Mastercoin-style protocols using like basically ZK-SNARKs. And then the other thing that you can do is, of course, if you have things like ZK-SNARKs, things like BitVM or things like the things StarkWare wants to do with OP_CAT, then you could make Bitcoin scripts that are themselves aware of the execution of these like embedded consensus things.

[01:38:44] I mean, basically, like this sounds like this is like basically layer two, right? Like this is roll ups. So I think that's great.

[01:38:52] Vlad Costea: You're good at this. You didn't read the paper. You just assumed what this is about. And you're right, except that the comparison he made was with Counterparty as a protocol, not Omni. But yeah, it was spot on.

[01:39:10] And there's another question from someone who was my sponsor very early on. He was working on Vaultoro and he built something that's called The Standard on Optimism or, no, Arbitrum. And he's curious what you think about his basically BlockFi without the company. It's like a lending protocol called The Standard. He's been building this alone. He's just looking for feedback.

[01:39:37] Vitalik Buterin: Yeah, well, what's it called?

[01:39:38] Vlad Costea: Thestandard.io.

[01:39:41] Vitalik Buterin: Thestandard.io, okay.

[01:39:45] Vlad Costea: I owe him like a big favor. He used to own an exchange called Vaultoro, where he was selling gold and Bitcoin since 2015 or whatever.

[01:39:56] Vitalik Buterin: Right, okay. So onchain vaults, multi-asset collateral. I guess I'm like, do you have a, I guess, one-sentence summary of how it differs from like Aave type of things?

[01:40:12] Vlad Costea: I don't know. I'll wait for him to reply and let's move on to other topics until then. I don't want to shill anything. I'm just curious about your thoughts on stuff.

[01:40:22] Vitalik Buterin: Yeah, I mean, I think these kinds of things are definitely really valuable. I mean, I think to me, the big thing is that just giving regular people access to stable valued assets with competitive APYs in a way that's like fully globally accessible and fully self-sovereign, it's big, right? It's something that's really valuable to a huge number of people. And as the technology matures, it just keeps on improving. And it actually has gotten to the point where I'm not constantly worried about smart contract risk overshadowing whatever tiny interest points I can get. And so it's been good to see the ecosystem get to that kind of state.

[01:41:16] So I expect more and more people to actually start just like doing the bulk of their banking in crypto for that reason.

[01:41:25] Vlad Costea: I have a question from the last sponsor I will shill today, which is Hodling.ch. They're a service that supports people with their self-custody. And the question is, what is your recommended way for people to back up their coins and to hold their keys?

[01:41:42] Vitalik Buterin: Is this on Bitcoin, on Ethereum, generic?

[01:41:46] Vlad Costea: Generic, I guess.

[01:41:48] Vitalik Buterin: Okay. I mean, I can just say the setup that I use and recommend. Basically, I have a big multisig. So on Ethereum, I use Safe. And I'm sure on Bitcoin, there's great multisig as well. And you have some number of keys, and the majority of those keys should ideally be held by people that you trust who are maximally distant from each other and who don't know each other. So they should definitely not know that each other are the key holders. And then, you know, you just make sure that they know about security questions and they know how to, like, you know, if you ask them to make a transaction, like how to verify that it's actually you instead of someone hacking your account.

[01:42:40] So this is kind of, you know, like my relatively high effort and high value setup. If you want something that has like less involvement from other people, like I do think multisig is the gold standard for everyone, right? And I think the general principle is you want like a multisig between different things whose reasons for failure are not correlated with each other, right? And so one example is like things that physical devices that you control. One of them is like things that you remember. So like, I mean, even like brain wallets could be fine as long as you like actually make sure you remember them.

[01:43:22] One is other people, institutions, if you can, though a bit kind of sad to see that there actually haven't been many institutions that have been offering this kind of like part of your multisig as a service. I remember back in 2013, I think it was like [unclear: Ryan Singer] had a company that was trying to do that. I forget his name. It's like starting to come back in Ethereum land, though. In Ethereum land, the thing that's like really starting to take off is things like ZK Email, where there's ZK Email, there's like ZK government ID, like there is a lot of these.

[01:43:56] Like basically you take like some centralized form of trust and then you basically you make a smart contract wallet where that smart contract wallet has a rule that it only accepts a transaction. If you can ZK-prove that you have control over that form of ID. And then the idea is like you obviously don't want that to control your whole accounts, but you just like use that as like one of your [unclear: N of M]. And, you know, you can mix and match different ones, right? So ideally, you know, you would even use like some commercial provider from one jurisdiction and then, you know, some government ID from a totally separate jurisdiction.

[01:44:37] And then the majority of it can be things that you control. Like basically, you know, you want to have a multisig and then you want like the different pieces of it. Like you want some core subset, right? So like let's say if you have a three of five, you want three of them to be things that are like reasonably accessible to you. You want the other two to like really aim much harder on the security dimension and then just like choose things that you're confident in.

[01:45:09] And like at the beginning, you can even start with something basic or like you can start with, you know, your phone, a hardware wallet and a piece of paper, right? And that's like totally fine, right? And then over time, you can basically switch over and migrate them to different things.

[01:45:24] Vlad Costea: Yeah, sometimes I think in the past I was criticizing Ethereum people for using browser extensions and storing thousands of dollars or even more using these without any proper backups. But I think right now it's a lot more professionalized. MetaMask has access with your Trezor or whatever to be able to sign transactions from a third-party device, which most likely is not tampered with. And yeah, I think the industry has come a long way. Also, when I asked Mike Belshe from BitGo the same question, he said that multisig works pretty well.

[01:46:08] Basically, his whole business relies on it. So it's sort of a big deal.

[01:46:14] Vitalik Buterin: Yeah, multisig has definitely come a very long distance since I first started talking about it 12 years ago.

[01:46:25] Vlad Costea: What was it back in the day? Was it on Electrum or Armory or were you just coding it yourself?

[01:46:33] Vitalik Buterin: I'm trying to remember. I remember I wrote that article in Bitcoin Magazine where I was advocating for people to do more multisig things. I remember I actually wrote a multisig wallet back in 2013 because there weren't good ones back then. I remember the [unclear: BitGo] wallet was one of the very early ones that had good UX.

[01:47:02] And then for the Ethereum Foundation's Bitcoin, we basically did a custom solution with a lot of custom scripts. And I ended up using pybitcointools a lot for my share of the signing. So it was definitely like a very OG era back then, but now it's much easier.

[01:47:25] Vlad Costea: Yeah, I want to ask you about your views on privacy. But before that, Robin Linus came back with an extra explanation saying that he said ZKCSV when it's actually called Shielded CSV. And the advantage is that it decouples Shielded CSV transactions from Bitcoin transactions, giving you scalability.

[01:47:47] Vitalik Buterin: I see. Scalability because the transactions, like, is there some way that the transactions don't actually have to be on chain or like you still have to pay the data costs?

[01:47:58] Vlad Costea: I don't think they're on chain. And I recall there was like an equal size to them, like 50 bytes for all transactions.

[01:48:06] Vitalik Buterin: Right. Because if they're not on chain, then like you have the whole issue of like, well, who is responsible for storing that record? If you have assets inside of that system, then like, how do you as a user know that you can actually like have the evidence to take them all out? And then it gets into a rabbit hole. There's like a bunch of different ways to solve a problem that have different tradeoffs.

[01:48:30] Vlad Costea: It's funny Robin started typing, but we got to move on to the privacy topic because you wrote a very good article, which I think explains a very deep philosophical truth about privacy, that you don't care too much about it until you realize that it's a bit too late and you wish you had it. You wish you cared about it. And also that the norms and the laws in meatspace, in real life, they change very fast. And you don't know how the stuff that you do today that is totally moral and totally legal is going to be interpreted in the future.

[01:49:11] And I like this. It wasn't along the lines of, oh, privacy is normal. Oh, you know, I don't have anything to hide, but you shouldn't care about what I do. You presented some very compelling arguments in there, and I recommend people to check it out. It's on vitalik.eth.limo. I don't know why it's dot limo, but it's fine.

[01:49:31] Vitalik Buterin: So basically, so, okay, I can explain that. So the site is on ENS, right? So actually, the entire site is like a sort of self sovereign site in the sense that it's like it's hosted on IPFS, the decentralized file storage, and then it uses ENS to store what the root hash is of the whole file structure. And eth.limo is like a forwarder. It's just a thing for people who have browsers that don't support ENS directly to be able to access ENS websites.

[01:50:11] Vlad Costea: Why are you doubling down on privacy and what are the limitations that you envision for this? Because you're not going full Monero saying that, oh, privacy should be for everyone and I don't care about criminals and stuff like this. Even though if you read the Cyphernomicon by Tim May, he outlines it very clearly that privacy should be there and protect individuals, even if there are some exceptions, sometimes when criminals use it.

[01:50:41] Vitalik Buterin: So I think in the crypto space, we talk a lot about protecting individuals from abuse by centralized actors. And one of the philosophically awkward things that you start noticing is that the things that blockchains give you is that they give you guarantees that a service basically won't rug you by editing the spreadsheet. But in reality, the thing that people are most worried about on the topic of abuse by centralized services is not even abuse by editing the spreadsheet. Sometimes it's about changing the rules. Sometimes it's about the service disappearing.

[01:51:35] But probably even most often, it actually is about services collecting your data. So if you think about the biggest complaints about centralized AI, I mean, one of them is, of course, that the AI could just rug you by disappearing. And that has happened to a lot of people's AI girlfriends and AI boyfriends, which is definitely sad. So if you use AI for that, you should definitely run it locally, and seek help. Yeah, sorry. The other, but then the bigger one is basically like, hey, OpenAI is getting all of your data, and they're probably training on it.

[01:52:20] And if they're training on it, then they just have no way to guarantee that your personal data is not just suddenly going to become accessible to some random, cleverly engineered query some like a year in the future. And then there's all these concerns about digital surveillance. And then, actually, this is an interesting anecdote. So like in the mid 2010s, China started pushing really hard to push out a lot of American tech services. Uber was one example. And one half of the reason why is, of course, that they want to have control through users doing things through local services.

[01:53:07] But then there was also another reason that made that whole push significantly stronger. And that reason was, it actually came from the Snowden revelations. The Snowden revelations spooked a lot of people because they realized that basically every American tech company is actually a vector for the US spying on people. And there was a lot of people discussing this within China and a lot of discomfort with this. And that probably was the moment by which US tech companies stopped being viewed by the world as being, you might say, basically blockchains in the sense of, oh, it's neutral.

[01:53:50] We don't care who runs it. It's a freedom platform. And then they realized that they're levers of control. So that's the prospect of basically US tech companies getting a lot of people's data was like this really big second argument. So even governments are afraid of your data being spied on by the government as the lesson there. And if you just think about it practically, I think the biggest risk that a lot of people have in terms of abuse from centralized actors just is centralized actors abusing them by selling their data.

[01:54:30] I mean, your location data from phones is being sold off in all kinds of different crazy ways. Just all kinds of data could get sold to third parties. It could get hacked by third parties. So a lot of different things could happen to that data. And that's something that you really want to be protected against. It's also, you know, there's freedom of speech, but then you also want freedom after speech. It's like in all of these different situations, privacy is just like it's this really key aspect of decentralization and of censorship resistance.

[01:55:14] And it's something that I think what's interesting is that in the very early cypherpunk days, that was highly valued, like e-cash, very privacy preserving. It was basically considered mandatory that if you're going to create an e-cash system, the point is that it's an encrypted e-cash system. But then in the blockchain era, we just did not know how to do like privacy-preserving e-cash without a centralized operator until ZK-SNARKs came along. And ZK-SNARKs did not exist back in 2008. And so because we did not know how to do it, like our community has just like felt a lot of pressure to sort of devalue it.

[01:55:56] Right. And to basically instead emphasize like, oh, you know, the bad guys can't edit your spreadsheet anymore. And now we have ZK-SNARKs. And so I think like there's no good reason for us to not care about this whole really important, big aspect of freedom and decentralization and censorship resistance. And so it really needs to go back to making it be one of the front and centers of the discussion.

[01:56:25] Vlad Costea: Would you say that Ethereum is a cypherpunk project? Because I guess the Blockstream side has been trying for years to frame it as this JP Morgan experiment, you know? Yeah.

[01:56:39] Vitalik Buterin: I mean, I think like Ethereum has a lot of deep cypherpunk roots to it. And both the cypherpunk roots that Ethereum itself created in terms of like things like Tornado Cash happening on it, but also even the influences of a lot of the early contributors. I definitely read things, including the work of David Chaum and the Crypto Anarchist Manifesto and all of these. David Friedman's Future Imperfect, I think also has a lot of cypherpunk parts to it. The thing that I like about David Friedman's work is that I think he has this like trait that I share, which is he doesn't just care about freedom.

[01:57:26] He also cares about like making society work in the context of freedom being respected. And he just put a lot of like deep work into figuring out institutions that could try to do that.

[01:57:39] Vlad Costea: And he also plays World of Warcraft.

[01:57:42] Vitalik Buterin: Yes. Games are just like really lovely environments for experimentation in so many ways, right? Yeah. I think I'd say like he even said at one point that this is one of the reasons why he really likes the idea of having games. That they are these like closed environments in which you can try out all kinds of different institutional ideas and then like see how they actually work. And it's like we've arguably even seen some of that, right? Like probably less on the like economic mechanism design and governance side and more on the communication side.

[01:58:19] Like things like Discord, you know, they have their roots in the gaming world. And then a lot of those like that ends up turning into like software for all kinds of companies to use even like outside of the crypto world. So a lot of that also, I think a lot of free software and open source influence. And one fun thing about Gavin Wood, one of the co-founders from early on, right, is like he did not even come from the Bitcoin side. He came from the free software side.

[01:58:51] And the problem that he was solving is like, well, how do we make free like the ideals of free and open software work in the context of software needing to be a sort of like massively multiplayer? Because like classical free software is single player, right? But then if it's massively multiplayer, it's not just the software that matters. It's also who runs the database, right? And if the database is run by someone who could break you or could seize your data or like change the rules on a whim, then like it doesn't even matter if the software is open and free, right?

[01:59:25] Because like they just don't have so many levers to abuse here, right? And so that's like his gateway into Ethereum is like actually solving that problem, right? So like a lot of the especially earlier contributors, like a lot of their motivations came from some of these, you know, both free software heavy and even privacy heavy types of contexts.

[01:59:51] Vlad Costea: I know that the Ethereum denominations carry the names of cypherpunks like the Dai, the Finney. And I was curious if you were able to get any feedback, of course, not from Hal Finney, because you did not launch while he was still alive. But if there is any feedback from David Chaum or Nick Szabo or Wei Dai, if they said anything about Ethereum.

[02:00:14] Vitalik Buterin: Yeah, I think, I mean, Nick Szabo definitely wrote some very positive commentary at the beginning. We had a few email exchanges, though, since then, I think both after the DAO fork and also I think after like we kind of diverged politically, yeah, he's definitely been much cooler on that. I remember that. 2018. Yeah. Let's see. Who else? Thinking of the other denominations. Well, I guess the Gwei is also called the Shannon, Claude Shannon is obviously also not around. Neither are Charles Babbage or Ada Lovelace. Wei Dai, I think we've like actually met him like I think at least once, although the topic was like more about like AI safety and like AI futurist types of topics rather than Ethereum specifically.

[02:01:02] I mean, funnily enough, there's a totally different person named Wei Dai, who is like kind of involved in Ethereum. I think he runs the d/Infra Summit that's happened a couple of times and has some other projects.

[02:01:17] Vlad Costea: It's funny how this works, because if you read the white paper for b-money, it's very similar with Ethereum. I think it's closer to Ethereum than to Bitcoin, or at least that's my reading of it.

[02:01:32] Were you inspired by b-money when you wrote, I mean, I'm not sure if you wrote the white paper yourself, but.

[02:01:39] Vitalik Buterin: I did write the white paper. I'm thinking what my inspirations were. They were definitely pretty eclectic, I guess. A big part of it was just like various work on programming languages that I'd personally seen in the years of programming that I had since then. I think also Daniel Suarez's Daemon, that novel is like a really big inspiration for the concept of DAOs. And then, of course, the original Daemon was AI, and now we actually have AI at a level that can possibly do those kinds of things.

[02:02:21] And now we're actually starting to look into AI DAOs.

[02:02:27] Vlad Costea: I want to ask you a couple of personal questions, because through this interview, we had like 21,000 viewers, and most of them in the chat were complaining about the price. I'm scrolling right now. They're just saying price. Some of them are showing their own token. But what I want to ask you about, is it difficult to be in this position where everyone expects you to do something to pump the price and they basically correlate what's happening with ETH, the token, with your private life?

[02:02:57] I remember at one point in 2017, there was a fake news report that you died or something, and you had to come up with a piece of paper where you wrote the block hash of a recent block to prove that, you know, you're still alive. It's insane what kind of stuff is happening out there. And it sort of sucks that there was also that documentary about Ethereum that somehow turned out to be your biography. And it's unfortunate that you get so much attention, and sometimes it comes at the expense of the project or at the expense of other builders.

[02:03:34] Vitalik Buterin: Yeah, totally. Yeah, I think this is one of the challenges that I've been trying to do over the last couple of years of how to do a better job of elevating some of these other people that have been taking on different aspects of Ethereum. And look, we're seeing some of them really come to the front as very independent actors. There's people on research, people on development, and also even people like pcaversaccio has been pushing on privacy more and more lately. So it's been starting to get some progress, and I definitely personally don't like having that kind of attention.

[02:04:31] I mean, it's bad for me personally, because it's like when everyone has that many expectations about every single thing I do, then I don't have freedom.

[02:04:45] The whole ETH price thing, I've just come to acknowledge that there is a large group of people for whom that's their primary focus, and that's the thing that they care about. And I cannot affect the ETH price any more than Obama was able to affect the price of gasoline or whatever. For me, it's even less, because I have way fewer levers than Obama did on the US. Even when I make significant announcements that [unclear: crypto Twitter] gets worked up about, the price doesn't move. And so in some ways, even that sort of market acknowledgement of Ethereum's decentralization in some way, but there's basically, especially in the short term, prices are pretty random and there just aren't many ways to affect it in either direction.

[02:05:47] And so if you can't affect it, then you just acknowledge that you can't cater to the kinds of people that check whether ETH went up or down today. It actually went up. It went up about $50 over the last 24 hours, interestingly enough, but as a signal of whether or not Ethereum is doing good or badly in general, I tend to focus on what I can change. And what I can change is basically, is Ethereum the kind of ecosystem that's being effective at supporting Ethereum's underlying values?

[02:06:24] And that's something where I think the answer is. Being honest, it's definitely sometimes yes, sometimes no, and I'm doing my best at really pushing so that the fraction of the pie that's yes keeps on growing and expanding. And now we have lots of functioning privacy protocols on Ethereum, that's a win. Now we have functioning layer twos that are at stage one, and so they're like halfway to the ladder of being fully trustless. So that's a win.

[02:07:03] The L1 gas limit going up and that happening safely in a way that keeps the protocol decentralized, when that happens, that's a win. The Ethereum protocol not being vulnerable to DoS attacks anymore, that's a win. I still think we haven't quite solved the problem of how to make really optimized self-custody and decentralization at the same time, especially for newer users, but there's progress on that happening. So I just try to focus on the things that I can change and focus on improving the parts of Ethereum that I think can improve and should improve, and so we can do our best at making a platform that can keep humanity open and free and safe for the 21st century.

[02:08:00] Vlad Costea: If you look at the Ethereum page from 2014, it advertises some use cases which ironically ended up being focal points of bull markets, distinctively. If you look at the 2014 page on the Wayback Machine, you're going to see that Ethereum is advertised for enabling decentralized companies, and there was this DAO moment in 2016 or something for allowing art to be tokenized, and there was the NFT mania, and there was also something about being able to do Kickstarter-style fundraisers, and we had the ICO moment in 2017 and 2018.

[02:08:41] And it's really cool how all of these use cases somehow ended up being the center of bull market narratives. And I was going to ask you, what do you think is the next big bull market narrative? Because right now, it seems that only some acknowledgement from politicians and institutional adoption is driving up the price, but there is not something coming from within the community for use cases which are fashionable, like NFTs were four years ago or something. Which one do you think is the next bullish narrative?

[02:09:17] Vitalik Buterin: So I expect that Ethereum is going to bifurcate in the application layer into scaling proven use cases and then doing really interesting and cool things. And so to me, the big proven thing that Ethereum has is the DeFi ecosystem, and even just like as we mentioned, the fact that you can do things like hold stablecoins, and if you want to, you could even hold the algorithmic ones, and so you personally don't have risk of getting rugged by one of them and actually getting competitive interest rates.

[02:10:02] That's like a product that a huge number of people in the world want. And then if you're holding ETH, then you're also effectively benefiting from the ecosystem of other people doing that. And then at the same time, there's the ability to easily move between different tokens, the ability to do all kinds of more complicated things, even just like hold them effectively. That to me is something that's starting to be proven for Ethereum and there's just a large group of base of people that do this kind of thing quietly and I think an even larger base of people that can do it if the technology is improved to the point where it can be really effective and just really easy for people to participate.

[02:10:54] And I expect that we're entering this period of greater political instability where basically, I don't think there's any country in the world that has a zero chance of basically becoming the next Argentina in terms of the kinds of stuff that a desperate government does to its people's finances to try to stay afloat.

[02:11:20] I recently asked GPT to just quickly tell me, what is the volume of DeFi hacks divided by what is the TVL of DeFi? And the answer is it's basically half a percent. And then if you stick to conservative protocols, it's less than 0.1%. I think at this point for any single country going forward for the next decade, the chance per year that you will be rugged by some kind of crazy political move is very plausibly greater than half a percent. Right. So I think there's just like a very valid thing there that we have that's very usable to a huge number of people.

[02:12:00] So I think that's one. And then there are obviously other things that are happening that are super fascinating like prediction markets. One of the reasons why I talk about them is like, I mean, I'm a big prediction market enthusiast. I mean, obviously Paul is as well. That's like a big topic for me for a couple of reasons. But the thing that Polymarket did in 2024 is it broke out and it got mainstream adoption even among people who would otherwise not care about crypto. And I mean, it even got sort of three sided adoption.

[02:12:35] Right. There was like the sort of relatively naive people who just like bet on things saying something like for fun and excitement. There is like really sophisticated people that do some deep analysis of like what probabilities should be. And then there's people who read the markets and they use that as a source of information. Right. And like even in that third category, like I've seen very mainstream US political intellectuals, even the types of people who would normally be the types to say like crypto is useless and it's a scam.

[02:13:04] Like even they they're retweeting screenshots of Polymarket. Right. So it's like a really big adoption success in that sense. But like realistically, in terms of, you know, how many fees would it pay to Ethereum? I mean, even if like Polygon kind of like moves to being a full rollup and like paying a bunch of fees to layer one, like definitely not a huge amount compared to some of the DeFi use cases. Right. But at the same time, like I think it really improves Ethereum as an ecosystem that, you know, things like Polymarket, also things like [unclear: Truemarkets] that exist in our world.

[02:13:45] Then there's like a lot of fascinating stuff that our world is doing with zero knowledge proofs. Right. And I don't know if you saw, but like today, Google announced that they're doing like privacy-preserving age verification with zero-knowledge proofs. And like to me, the whole age verification thing is like kind of meh, but at the same time, like it being privacy preserving is better than it being not being privacy preserving. And like the fact that technology that our ecosystem is incubating is like actually starting to get used by mainstream actors is just like really cool.

[02:14:22] Yeah. So that's like, I think there's, you know, there's this like a long tail of just interesting and cool things. But like the way that I see it, like that's also not the money go up, the number go up narrative. Right. That's like that's the narrative that makes Ethereum be the kind of ecosystem that like someone who is a cypherpunk or a dev or a researcher would want to participate in. Right. And I think realistically, you know, the number go up narratives are going to be dominated by a fairly small number of financial use cases.

[02:14:55] And like, I think that's fine. I think that's fine if they are honorable financial use cases. Right. Because, you know, over the last six months, like we've seen a huge amount of what I would call very dishonorable finance. Right. Like there was a lot of these like I think like meme coin things where like I'm definitely not against all like all meme coins by far. Right. Like I've been a Doge fan and a Doge supporter for a decade. Right. But like the type that sort of go up and down within like 12 hours and like effectively they have sort of like they they don't feel like good food.

[02:15:33] They feel like heroin. You know what I mean? Like that like that kind of stuff, I think is less honorable. And just also, especially if you have, like, [unclear: political meme coins], because I think like that just turns into like basically a political corruption vehicle. So that like if Ethereum succeeded by being the home of that kind of stuff, then I would be unhappy. But if Ethereum succeeds by being the home of just all kinds of people in environments that either are politically unstable today or could become politically unstable tomorrow, which is like the whole world, being able to just safely save and grow their wealth with their families, then like that would be a really happy outcome.

[02:16:14] Vlad Costea: Yeah. I mean, these are use cases which I guess were not envisioned in the original design from a decade ago. And it's cool that you keep on shipping code and building stuff. And yeah, the Polymarket phenomenon is really incredible. And the way it was used during the U.S. Elections was mind blowing. And even Bitcoiners embraced something that's built on Ethereum. The same guys who otherwise say, oh, Ethereum is an unregistered security or whatever they like to say. They basically said, this is legit. This is something that we're interested in using.

[02:16:54] And I feel sorry for asking you this so late into the interview, but I've been meaning to. What do you think about the situation of Roger Ver? I feel like it's a very divisive situation among libertarians. There are some OGs who defend him and then there are some others who say, well, I'm not happy about his attitude during the block size wars and maybe that he does deserve to go to jail because of this.

[02:17:22] Vitalik Buterin: Yeah. I mean, I think as a matter of principle, saying that someone deserves to go to jail because of like unrelated conducts that he did in some other situation, whether that's taking what you consider the wrong size of the block size war or whether that's expatriating from the U.S. Because I know some libertarians have been going more nationalist lately. I think being cool with someone being wrongly imprisoned for those reasons is just because you don't like him for other reasons. Like that's very wrong. Right. And I think it's important to stand on that point of principle.

[02:18:05] And I mean, I have looked somewhat at his case and my impressions are these kinds of situations. There's obviously like all kinds of information on that that's like hidden for a long time, things that are not visible. But if his case is basically that he tried to comply and the coins that they were going after him for were coins that he gifted his wife even before the whole expatriation. And basically that he did his best to honestly comply with a law, despite that law, in my opinion, being fundamentally unreasonable. Like the whole U.S. saying you have to pay taxes no matter where you are to be a citizen thing.

[02:19:06] I think that's like if those facts are the way they are. There's a lot of facts that does make it look like effectively that the government is going after him because it wanted to go after libertarians. Right. And so that's like unfortunate. Right. And then the way that it went after his lawyers and like basically grabbed their private information, like that feels like a serious breach of attorney-client privilege. Right. So I definitely like hope that Roger gets like the fair opportunity that he deserves to make his case.

[02:19:45] I mean, everything that I've seen definitely suggests that, you know, things are not the way the government makes it seem.

[02:19:53] Vlad Costea: Well, I'm happy you are so well acquainted with the case. And you mentioned some details and the distinction that you made in the beginning against, I guess, what we could call karmic justice is very important. Like some people think that just because they don't like someone and they did something to them in the past, then they deserve to go to jail for unrelated reasons. And it's really unfortunate to see this in the Bitcoin community.

[02:20:22] Vitalik Buterin: Absolutely. Yeah, I think. Right now, the thing that we really need is to just remember what our roots are. And I think that means remember what our principles are. And the principles, I think, are that we believe in things like open source. We believe in things like privacy. We believe in things like freedom. And these are principles that we believe in. Because having a strong guarantee that these principles are broadly applied is good for society and good for humanity. But maintaining those principles requires not turning them off in specific cases that you think is convenient.

[02:21:11] Right. And like the whole concept of blockchain censorship resistance is that. Right. Like, I feel like, you know, if you're going to be okay with throwing Roger Ver in jail for some unrelated thing to do with the block size war, like, how can you not be in favor of the DAO fork at the very least? Right. Like, you know, the right way. But the DAO fork is like 1000 times milder, like it's not even getting into government's coercion. Right. So that's, yeah, I think, just there, like, there are a lot of people right now who claim to be upholding principles, but then just like completely ignore them when it's for the sake of some political tribe or some kind of personal dispute.

[02:21:59] And I think if things go in that direction, then, you know, the credibility of institutions that they care about will go to zero and that will be replaced by credibility in basically cults of personality where they might like one, but then they might discover the one that comes after to just completely go after them and destroy them. So no, I think we need to believe in freedom, believe in a rule of law, believe in fairness, and also believe in privacy and censorship resistance on chain for everyone.

[02:22:37] Vlad Costea: That's really beautiful. I'm going to cut this and make it a short clip because it's so nice. I want to ask you something about Ethereum, which has puzzled me for many years, because Blockstream has been marketing Liquid, which is their federation slash sidechain, as a competitor to Ethereum. And they said, you know, Ethereum is the place where they do crypto kitties, is the place where they do ICOs, and some of them are fraudulent. But, you know, we are serious about this. We're like business people. We want to tokenize for companies on Wall Street.

[02:23:11] And we can do everything with regulations and blah, blah, blah. And you talk to our lawyers. But what was funny that actually happened is that people used Ethereum anyway, because it turns out that the Wall Street people don't like regulations either. Or they think they're maybe too much and they don't want to deal with them. They would rather build in a permissionless way. So to me, it's been very funny. Why do you think this happened? Is the world waking up to the cypherpunk ideology?

[02:23:40] Vitalik Buterin: I think now is a very good time for the cypherpunk ideology because the world has had multiple recent and very painful and crazy examples of what all the possible alternatives are.

[02:24:00] Ultimately, my critique of some of the stuff that happened in the late 2010s, and I actually think this applies to Liquid. I think it applies even more to some of the Ethereum enterprise stuff that happened. Basically, the thing that they wanted to do is they wanted to create a compromise between centralization and decentralization that gets the best of both worlds. Instead, they ended up creating a compromise between centralization and decentralization that gets you the worst of both worlds. If you look at the Ethereum enterprise chains, often the pattern is they do a very good job of getting their first five partners.

[02:24:40] Then the five partners get together and they create this lovely chain, and it seems like it's amazing. But then when it comes time to expanding from five partners to 25 partners, nobody else is interested. Why? Because they don't want to join the ecosystem that's dominated by the first five major banks. Then at the same time, if you're moving from a centralized server setup to a permissioned blockchain, you still have to deal with BFT. You still have to deal with writing everything in the EVM. You still have to deal with asynchrony.

[02:25:09] You still have to deal with basically 80% of the problems of building on a fully public blockchain. It basically just ended up being completely the worst compromise. You get the downsides of being decentralized without the upsides. My impression is that a very similar thing ended up happening with Liquid. I mean, Liquid definitely was a consortium sidechain. It was basically the thing that Bitcoiners criticized rollups for being for years later. Which is just being a multisig. With Ethereum, this year we're finally making serious pushes. Moving away from that and getting to layer 2s that are secure in a decentralized way.

[02:26:01] Liquid was just like that all along. It's not decentralized enough. At the same time, it ended up not offering enough of the benefits that people wanted. This is probably the other thing. The whole sidechain elements thing. There were a lot of these beautiful ideas of how to upgrade the Bitcoin script. They were very technically beautiful, but they were also not the thing that devs wanted. The thing that devs wanted is something that just compiles from an existing language. That at least looks like C++ or Python or JavaScript.

[02:26:46] That's the thing that the EVM offered. That's also the thing that RISC-V offers. But it's not the sort of thing that Bitcoin script plus two or three languages with simplicity and much more fancy Merkling is going to offer. I think as a product, it just got stuck in the middle in that way.

[02:27:09] Vlad Costea: Yeah, it's beautiful that you mentioned that because you said over the last month that you support the transition from EVM to RISC-V. As far as I know, RISC-V is the standard for open source hardware, which allows you to verify every piece of hardware like the processing unit and the motherboard. And everything is built in a stack where it's open source and verifiable. And it's very cool. I think it's made some great progress over the last decade. And my first thought when I saw that was that it's cool that Ethereum is still moving fast and breaking things and basically pushing the entire industry forward.

[02:27:47] But on the other hand, you have like a multi-billion dollar industry of EVM products, some of them even coming to Bitcoin and trying to bring financial services to BTC. So do you think it's too radical or do you think the industry will follow through with RISC-V?

[02:28:07] Vitalik Buterin: I think the question is not binary. The question is always how much adoption a thing gets. So if you look at WebAssembly, it's gotten its level of adoption within browsers, so it hasn't really gotten too much further beyond that. RISC-V has a lot of advantages because it's just such a simple and naturally canonical architecture.

[02:28:32] We'll see what its adoption in hardware looks like. And then the other question is what its adoption in ZK-VMs looks like. Because one of the reasons why I suggested it is because something like two-thirds of the ZK-VM implementations that are being built today, they're being built by making a ZK-VM over RISC-V and writing the EVM in RISC-V. And so the argument is like, well, if this is how ZK-provers work, then you might as well just expose RISC-V to smart contract developers already directly.

[02:29:04] And then you get like 100x gain by just completely removing both the EVM overhead and the overhead that inherits having an interpreter. So that's really nice. Then the question, of course, is like, you know, ZK-proving is still a rapidly moving space. Is it going to be even more different in two or three years? And I guess, you know, we'll see. But right now, RISC-V is definitely looking like a super promising choice. And I think we should do an honest effort at like also evaluating the like Cairo-style, like very ZK-prover-optimized VM road.

[02:29:52] Although the challenge with that is that like often if the prover tech changes, then the VM that's optimized for the previous prover often ends up being like worse on the next prover than it does on RISC-V, right? Like that was definitely true for like the 256-bit stuff. And so now the question is like if we make something that optimizes around like, say, yeah, you know, 32-bit prime fields, you know, like KoalaBear is like the big one right now, I think it's like two to the 31 minus two to the 24 plus one or something like that.

[02:30:26] Yeah, then. Like, imagine if two years later, all the provers just switched to being over binary fields, then like you risk creating something that's actually, yeah, even worse than RISC-V, right? So that's like, it's it's all a matter of kind of prediction, right? The downside of choosing RISC-V is like, well, what if it turns out that RISC-V is like 100 times less efficient than a super optimized VM? So I think it's, we'll have some period of discussion for this. I think hopefully, we'll converge to something like by the end of the year or so.

[02:31:02] Vlad Costea: I look forward to that. If you could travel back in time, like a decade ago, and redesign Ethereum with the knowledge that you have now, what would you do different?

[02:31:13] Vitalik Buterin: Definitely just make the VM basically be something like RISC-V. Like the EVM just ended up having a lot of needlessly complicated bits. There's like 10 different features out of Ethereum that are just needlessly pointless. Like, one of them is the EVM being 256 bits. The other is the Merkle-Patricia tree being like hexary instead of binary. It turns out, like the reason why that was done is to optimize for databases. So you only have to do like eight reads or writes instead of 32s. But the thing that I completely missed is that you could make a tree be like binary from the perspective of Merkling, but hexary from the perspective of databases.

[02:31:50] And that option just totally did not even come up to me. I think there's a lot of like, probably like half the precompiles that we did, we should have just never done them, probably most of the precompiles. But they just ended up contributing a lot to consensus risk without actually getting the benefits of the, like getting a lot of usage on them. Probably the only exception is the elliptic curve stuff. And that ended up being like the bedrock of the Ethereum privacy ecosystem. I think we should have never done Keccak. I think we should have just done SHA-256 from the start.

[02:32:33] There's like a bunch of technical things. There's also like, there's social things that could have been different. Like one like crazy idea that I sometimes like think about, like as a sort of alternate history is like, what if Ethereum had had no sale at all? And no pre-mine, but instead there was some kind of voting gadget by which like 30% of the supply could go to fund development for some period of time. And basically the argument was like, you know, it would have still developed the, like there would have still been a lot of resources for development.

[02:33:16] But at the same time, like it would have at least actually been an open system from day one and like just not even having the foundation as a central actor from the beginning. So that was, you know, I don't know if that would have worked, but I think things like could have been interesting to try.

[02:33:46] Then thinking, I mean, a lot of like individual choices in terms of like how to deal with like the people aspect of starting Ethereum. And I know I've talked about that in a bunch of different occasions.

[02:34:06] On the proof of stake, I think like we should have gone with a simpler and crappier proof of stake at the beginning. We just ended up spending way too much effort on an over complicated protocol that's like actually ended up having quite a few security issues. And so now we're actually going into single slot finality. And so now we have a lot of this research around an optimized protocol that gets you the same kinds of properties in terms of like finalizing, but the chain also being able to continue if a lot of nodes go offline.

[02:34:43] And I made an implementation of it. It's like only like the full thing is like 300 lines of code. So that's like basically I think we should have done something simpler instead of trying to like over-optimize, ending up creating something that like needs to be replaced anyway. Basically, there's just a lot of little things. Also, I think for privacy, the challenge with caring about privacy at the beginning was like we did not have zero knowledge proofs. But I mean, I guess we very plausibly could have had a privacy ecosystem that started off being sort of Monero-like with ring signatures and then upgraded to SNARKs over time.

[02:35:31] I also think we should have started much earlier on the wallet side of privacy, like basically making it like a more default experience inside of wallets. Like that could have, there's a lot of things where I think one of our biggest weaknesses is like we haven't paid enough attention at the wallet layer. I think it's true even today, right? Like a lot of people have these big complaints about like cross-L2 interoperability and like I look at them. And over half of the time, the thing that they're complaining about is a UX issue.

[02:36:02] So had we like done more at the wallet layer that like a lot of things about Ethereum could have been much better than they could otherwise have been. Like even the whole two-click-to-trade thing, like obviously there's like EIP 7702 fixes and it makes it not necessary. But there's ways that the wallets could have been designed better to make that a one-click experience for users as well, right? So, you know, just a lot of those kind of little things.

[02:36:34] Vlad Costea: Today, WBTC on Ethereum, which is a wrapped token, is like 100 times bigger than Lightning Network and Liquid and Rootstock. And it seems to be a pretty popular choice for people wanting to do DeFi with their Bitcoin. And I was going to ask you, first of all, would you say that Ethereum is a layer two to Bitcoin under these circumstances? And secondly, do you see this use case becoming more popular in the future?

[02:37:02] Vitalik Buterin: Well, it's technically not a layer two because they don't have verification, right? But I guess in that circumstance, Ethereum is a sidechain to Bitcoin, yes. And, you know, if Bitcoin DeFi happens, then Bitcoin will also be a sidechain of Ethereum, which is pretty fun.

[02:37:23] But yeah, it's definitely interesting to see those use cases take off more. I mean, the one thing that I wish for is definitely for them to be stronger on the trustlessness side, right? Because I think right now, it's basically a multi-sig. And then I think, didn't it get bought by Justin Sun recently or something like that, right? And I think you want something where the security doesn't depend on knowing who the operators are. And increasingly, that kind of thing is actually possible with the technology. And so I think there just needs to be some team to just go and actually build it.

[02:38:12] Vlad Costea: Do you see Bitcoin and Ethereum being complementary or friendly with each other? Or are they actively competing for users and use cases?

[02:38:22] Vitalik Buterin: I think, yeah, I mean, I think like, realistically, yeah, I mean, obviously some of both, right? Like, I think there is a reality that sort of every cryptocurrency is competitive because they're competing as places to store wealth. But at the same time, I think there's a lot of complementarity as well, right? Like just the kinds of use cases that they have attracted so far have been very different. And also, I think both the two have just benefited each other quite a bit on technology. Like, Bitcoin is now doing L2s.

[02:39:03] I mean, basically all of the original Ethereum design was motivated by Bitcoin, either by copying Bitcoin or by learning from what we perceived as mistakes of Bitcoin. And I mean, potentially, yeah, things could go in the other direction. Like maybe Bitcoin will become a multi-client ecosystem over time. And maybe things like the experience of the Ethereum ecosystem could help there. And a lot of the philosophical backbone is shared. Also, just a lot of the institutional kind of backbone of making sure that cryptocurrency stays easily accessible to people.

[02:39:48] I mean, like for me, that stays legal. It stays like having a friendly regulatory posture. I think there is a huge number of common interests there. There is a huge number of common interests also in like cypherpunk values lower down the stack, right? So, ultimately, secure, like your coins are not your coins if you don't know if the hardware is going to rug you, right? So, you have to think about that. Think about the operating system. If you don't know what the operating system is going to rug you, right?

[02:40:29] Think about like programming languages. So, peer-to-peer networking, right? I think the needs are very similar. So, I like... There's a lot of common interests and I think like more collaboration across those common interests would definitely be really great to happen too.

[02:40:53] Vlad Costea: This question is going to be much more direct because I guess for a number of years there are people who built a platform basically vilifying you and calling you the king of shitcoiners and whatever. But the question is, do you still hold and use Bitcoin? Would you describe yourself a Bitcoiner?

[02:41:11] Vitalik Buterin: Yes, I still hold Bitcoin. And I still have sent and I still have used it. Actually, I think I have like literally... I believe within the last couple of months I've actually sent a Bitcoin transaction to pay for... I forget what it was. I think it was either a Namecheap subscription or like it was some kind of subscription. So, yeah.

[02:41:38] Vlad Costea: Have you tried the Lightning Network? Because some people say this is the gotcha, right? It's the end to all altcoins.

[02:41:45] Vitalik Buterin: Right. I mean, I actually have not yet. And I think I've been like waiting to see it solve its problems, get enough adoption to get to a point. I mean, is there like a desktop Lightning-friendly wallet that you could recommend to me? I'm happy to just like...

[02:42:13] Vlad Costea: Well, I would say so. On mobile, the one that is non-custodial and works pretty well, there are a bunch of them. There's Phoenix and there's Blixt. I think Blixt is more nerdy, has more options. Phoenix is, I think, more popular because ACINQ has one of the largest nodes on the Lightning Network. But for desktop, there is LNbits, which is pretty cool because it's like WordPress. You basically have plugins that you add on top of your client. And you can unlock all the use cases that you want.

[02:42:46] You can make faucets, you can... But I think it's by default custodial.

[02:42:52] Vitalik Buterin: Right. How standardized is the, I guess, payments experience? Like if I pay for something with Bitcoin that accepts Bitcoin, like what would be the... whether it's something like Namecheap or buying, paying for plane tickets. Actually, that's also one of the use cases because you'd be surprised how often credit cards all break at the same time if you're a nomad. Like, what's the probability that they'll accept Lightning in a way that all of the different Lightning wallets would be able to interoperate with?

[02:43:31] Vlad Costea: Well, I think it's been pretty standardized at this point. You're describing issues that were true like six years ago or something.

[02:43:39] Vitalik Buterin: Oh, six? Okay. Okay.

[02:43:41] Vlad Costea: Yeah, even then, I think most wallets right now on mobile, they let you do submarine swaps, meaning that they go from Lightning to on-chain if you scan an on-chain address.

[02:43:51] Vitalik Buterin: Right. Okay. No, that's, I mean, that's good. Yeah, no, I definitely have not looked at the practical day-to-day use of Lightning recently. It definitely is one of my faults. I will make it one of my top priorities then.

[02:44:10] Vlad Costea: I think whatever uses BTCPay as opposed to centralized payment processors is also using Lightning because it's very easy to integrate. At the same time, it's difficult for the operator to run a Lightning node and that's another issue because the network became more centralized with LSPs, which is Lightning Service Providers, and they take fees.

[02:44:38] Basically, it went back to the same issue that they were trying to solve with intermediaries taking fees. I think I'm responsible for paying one of the biggest fees on the Lightning Network last year when I bought my car. I basically sent coins from Lightning to Kraken using Lightning and I paid like $50 for a transaction fee, which is ridiculous. I could have paid much less on-chain, but there are some advantages to using Lightning, which is finality and also fungibility. Because sometimes in Bitcoin, and this is an issue, I think about this a lot.

[02:45:14] I receive donations to my addresses on my website and then I use CoinJoins because I don't want to have these coins associated with any identity, you know? And I'm concerned at the same time because I see, for example, North Koreans using mixers and stuff like this, and I have no idea what my coins are going to catch. So I put them on the Lightning network and I pay with this because it becomes more fungible. It's sort of a very complex workaround. I'm not very happy with it.

[02:45:46] I wish it was much simpler, but I think it's the use case that works for having Bitcoin privacy right now.

[02:45:53] Vitalik Buterin: Right. Yeah, that's good. And then one of them, I mean, I remember reading, like, Roger Ver's book. He complained about some of those intermediation aspects of Lightning and just the difficulty of people running their own 24-7 box. I mean, making any of these kinds of things work well is really hard, right? Even with roll-ups, it's basically been now five and a half years since the roadmap started, and we're just getting stage one layer twos now.

[02:46:36] So hopefully, yeah, they'll get the stage two over the next year as well. One of the things that we've been thinking about for a while is how we can make it easier for more people to run always-on boxes and computers that do some kind of service that just depends on them staying online. This sounds like a lot of use cases, right? A Lightning node is one, Ethereum staking is one, and then AI is the other one, right?

[02:47:09] Vlad Costea: And I can get you in contact with the Start9 people. There is the CEO, I know him very well. He's been on the show and he basically has this box that has also like a marketplace from which you download applications that you want to run. It has Bitcoin Core, it has Lightning clients of your choice, it has AI, it has a Monero node if you want that, but they don't have anything Ethereum yet. And if you're able to explain to them which clients they should be using to make it work on that hardware, I think can be very nice.

[02:47:43] Vitalik Buterin: OK, yeah, I'd be happy to talk to you.

[02:47:47] Vlad Costea: Yeah, and there's also Umbrel, there are a bunch of projects that try to sell something that you just plug into the wall socket and it's supposed to work.

[02:47:58] Vitalik Buterin: Right, right. Yeah, yeah, I mean, I've seen some providers like this, they've been around for a while, I think there's like FreedomBox was one from back then. So it's definitely good to see it becoming more mature. Maybe it's the sort of thing where there's just, once there is enough of a critical mass of applications, then it just like flips from being like a hobby that you forget about to just suddenly being a very viable thing.

[02:48:25] Vlad Costea: I think it can definitely happen. At the same time, the communities are too tribal. And sometimes I think about this because, for example, when Casa, which is Jameson Lopp, he's not the CEO, he's the CTO. There's someone else who is in charge there. But when he announced on Twitter that there's going to be support for Ethereum and other ETH assets, there was a backlash and people called him a traitor and stuff like this. And I guess some companies are afraid of basically losing this purity argument and saying that they're Bitcoin only.

[02:49:01] In the case of Start9, they already added Monero, which I think is trying, it's starting to get some acceptance among Bitcoiners that, OK, this currency is not really fungible, but you can add Monero and there are some use cases there. With Ethereum, if people understand that they can build contracts and whatever without being tribal and dogmatic, it can also happen because you guys have been able to lower the requirements. And I think the hardware also got exponentially better over the last decade or so.

[02:49:38] Vitalik Buterin: It really has. The hardware has gotten better. Also, the software has gotten better, like the efficiency of the EVM on the same software has increased by at least an order of magnitude. And then the denial of service stuff has been completely solved. But, yeah, I think to me, the tribe should be, I think, first and foremost, not about a particular asset, but about the underlying ideals. And I hope that in Ethereum, we can continue to convince all of you guys that we can be very effective stewards of the underlying ideals and just making sure that a financial self-sovereignty and a free and open Internet can continue to actually be a reality for people.

[02:50:34] Even during a time when lots of people don't want it to be a reality. So let's keep working on this.

[02:50:42] Vlad Costea: You can disagree with me, but I still see Ethereum as a research lab for Bitcoin. And it took me a few years to develop this vision, but a lot of the stuff that you built benefits Bitcoin. And as you said, vice versa, you've learned from Bitcoin's breakthroughs and mistakes also.

[02:51:01] Vitalik Buterin: Absolutely. And maybe...

[02:51:03] Vlad Costea: Go on, sorry.

[02:51:05] Vitalik Buterin: No, no, [unclear: that's fine]. You know, as I've said, there's a lot of plenty of very good opportunities to learn from each other and just collaborate more in that way.

[02:51:17] Vlad Costea: Some people think that the future will be just 21 million Bitcoin, and that's the only asset. But I think for a cypherpunk future, we're going to need like four or five or more blockchains, which serve different purposes. Just like today we have Visa, we have MasterCard, we have American Express. They're very similar, but they have a different customer base and they have tradeoffs that you can find. So I see in the future that we're going to have Bitcoin, definitely something for smart contracts, unless Bitcoin... I don't know how we're going to get that into Bitcoin at this point.

[02:51:54] Even covenants seem to be very divisive. We're going to have something for fungibility slash privacy, definitely. We're going to have maybe something just for experimentation, like general purpose, whatever. And there's always going to be, you know, the casinos, the Ponzis. It's inescapable. Every generation has these and technology doesn't enable or disable anything.

[02:52:28] Vitalik Buterin: All right.

[02:52:30] Vlad Costea: Well, I wanted to ask you before this, what's your current opinion on Bitcoin maximalism? Because you wrote two very different articles, one which basically tried to turn the term into an insult and the other one which basically described a carnivore lifestyle. And I think if it was a prank, it was one of the best ever. If you were serious about the carnivore diet, I want to learn more.

[02:53:00] Vitalik Buterin: No, my actual diet is like I have a lot of fish and a lot of vegetables. So I guess that, you know, it's still but no, I think the like philosophically interesting thing there, right? Is this the like what kind of a community you need to have to like really maintain particular values, even in the face of like very strong actors, including on the inside and on the outside, including governments and commercial, including people who like present themselves as being very friendly and well, and well meaning.

[02:53:43] Like all trying to push the ecosystem in some direction that goes further away from those values, right? And these are problems that like Bitcoin had to face. I mean, I think these are problems that like Ethereum has to face as well, right? And I think, you know, if there isn't a contingent of Ethereum culture that's like very strongly pushing for decentralization, privacy, censorship, resistance, then like there is a very natural way in which the ecosystem could just like slide into being a corporate chain where we sort of accept intermediaries out of pragmatism and then they get enshrined forever.

[02:54:29] And then suddenly we don't have self sovereignty anymore. And the challenge, of course, is that, you know, there is such a thing as autoimmune diseases, right? And there's definitely a huge number of very smart people that can be repelled by maximalism, right? And so there is like a challenge in getting kind of, you know, the good parts of that without the bad, right? Like basically, yeah, like having a culture that is like strong without being cruel. And I think that is possible. And I think like that is the sort of thing that Ethereum definitely needs more of.

[02:55:11] And I mean, I think like Bitcoin definitely really needs as well. I think, I mean, like probably the failure modes are a bit different, right? Like I would say, yeah, like though in the Bitcoin case, it has been interesting to see some of these kind of newer attempts at co-opting, right? Things like, you know, like basically Saylorism, right? It's like, hey, you know, like people's ability to self-custody doesn't actually matter. Like, let's just let Bitcoin be a fully institutional asset. And basically, I think one of the big failure modes of a toxic culture, aside from just driving people away, is that it often ends up being toxic in only one direction, right?

[02:56:05] Ends up being like super vulnerable to like people who present themselves as being like friends, right? Even like Bitcoin Cash's vulnerability to Craig Wright is like an excellent example there, right? It was the thing that Scott Alexander in one of his posts a long time ago, he had described it as the "50 Stalins" critique, which is basically his argument is like, oh, well, actually, you know, in the Soviet Union, you had plenty of room to disagree with the government. Like you could totally say like, hey, I think Stalin is great.

[02:56:37] I think Stalin is amazing. We just that he's so amazing that really the biggest problem is that we don't have 50 Stalins that are running and making the Soviet Union 50 times greater. And so his argument is like, well, actually, you know, in any kind of culture, you know, you're going to have a sort of approved, you know, like direction to kind of be maximalistic, right? And you want to make sure that like that also doesn't start becoming a problem, right? So, I mean, I really hope that, you know, the culture of like nodes, the culture of like doing things on chain, I mean, like the more technical sides of things can be stronger in Bitcoin to like really start to push back against Saylorism more.

[02:57:27] I mean, maybe after the current political winds kind of blow over, there's going to be more of an opportunity for that. And I think, I mean, in Ethereum, I think the risks are somewhat different. Like the risks are basically that people accept just like adding in seven different types of intermediaries and then all the intermediaries are like VC funded startups. So they can market themselves as being Ethereum-aligned and like being friends. And we need a strong contingent to try to push against that.

[02:58:00] So it's like that's necessary, though. Also, we get like the way that that happens should not be capricious, right? And like the downside is always that like what happens when it is capricious, right? What happens when like it is kind of random and it's like the equivalent of, you know, like having like police officers without laws where like they just that, you know, there's no speed limit, but they just like randomly decide like, hey, you're going too fast. And like, let's like take away your entire car for it.

[02:58:36] Vlad Costea: Yeah. And before I let you go and I got to acknowledge that you've been here for three hours. I have a lot of respect for being able to go for so long before losing interest. Is there anything in Bitcoin today that gets you excited for the future? Something that gives you hope that the project can still scale and become private and get everything that it currently lacks?

[02:59:02] Vitalik Buterin: I mean, I think the layer two stuff is it, right? I think like to me, yeah, for Bitcoin to really like succeed and be honorable, it needs like I think it needs to have a strong technical core and not just a financial core, because if it just has a financial core, then the tech becomes perceived as something that should just be outsourced for convenience. And once you have that, then like the road to centralization begins. And so like seeing the renewed excitement around, you know, like BitVM, around the OP_CAT-based [unclear: STARK layer twos], around inscriptions, around all of these protocols.

[02:59:43] Like I think that stuff is good. Right. And the more that Bitcoin does things like that, I think the better.

[02:59:51] Vlad Costea: Thank you very much Vitalik. Where can people follow you and read your latest thoughts?

[02:59:57] Vitalik Buterin: Yeah, so there is my blog, which is on ENS at vitalik.eth. And if your browser is not ENS-capable, then vitalik.eth.limo can cover it. There are my socials, which are VitalikButerin on Farcaster and Twitter. There are, I mean, also, you know, I think the Lens is vitalik.eth for me as well. Then there is like various kind of haphazard, you know, like podcasts and in-person things that I do in various contexts, also writings in other places.

[03:00:43] So Ethereum Magicians and ethresear.ch are very big ones. And I think you should also follow those to see some writings by other people about Ethereum. So no, definitely in many different places online and offline.

[03:00:58] Vlad Costea: Thank you very much Vitalik. Come to ETHdam next week if you can, but don't give an answer because your opsec should not be compromised if you want to join. Thank you to everyone who listened to this. It's been a pretty high number, 33,000 people. Thank you very much for tuning in. And thanks to the sponsors once again, Citrea, LayerTwo Labs, SideShift, Bitcoin.com News, Noones.com and Hodling.ch. Thank you very much. I'll see you next week with an interview with Portal, which is this sort of layer two solution that's trying to do swaps between Ethereum and Bitcoin with the Lightning Network.

[03:01:38] I don't know how that works. I'm going to learn from them next week. And I guess good night. It's five in the morning here already.

[03:01:47] Vitalik Buterin: Yes. Yes. Good night.

[03:01:49] Vlad Costea: [The published audio repeats the end of the outro here:] ...Bitcoin.com News, Noones.com and Hodling.ch. Thank you very much. I'll see you next week with an interview with Portal, which is this sort of layer two solution that's trying to do swaps between Ethereum and Bitcoin with the Lightning Network. I don't know how that works. I'm going to learn from them next week. And I guess good night. It's five in the morning here already.

[03:02:15] Vitalik Buterin: Yes. Yes. Good night.