Time Magazine: Buterin behind Ethereum worries about the future of cryptocurrencies

After a few minutes, electronic music will start beating, plush toys will be thrown into the air, women will appear spinning colorful hula hoops, and a mechanical bull will come into action, knocking off a delighted rider one by one. This is the closing party for ETHDenver, a week-long cryptocurrency conference dedicated to blockchain Ethereum. For days, people had formed long queues around the block. Now, on this Sunday night in February, the dizzying energy is at its peak.

But as the crowd squeezed in, a lean man with pixie features was dashing out of the venue, past surprised selfie-takers and venture capitalists. Some shouted and begged him to stay; others even chased him down the street, on foot and on motorbikes. However, the man ran faster than all of them and disappeared alone into the privacy of the hotel lobby.

The most influential man in crypto, Vitalik Buterin, didn’t come to the party in Denver. He doesn’t drink and doesn’t particularly like crowds. Not that the 28-year-old ethereum creator doesn’t have much to celebrate. Nine years ago, Buterin dreamed of ethereum as a way to use bitcoin’s underlying blockchain technology for a variety of uses beyond money. Since then, it has become the cornerstone layer of what advocates call a new, open-source, decentralized internet. The platform’s native currency, ether, has become the second-largest cryptocurrency after bitcoin, powering a trillion-dollar ecosystem that rivals Visa in terms of the money it moves. Ethereum has brought thousands of unbanked people around the world into the financial system, allowing capital to flow unhindered across borders and providing entrepreneurs with the infrastructure to build all kinds of new products, from payment systems to prediction markets, Digital Exchange Conference to Medical Research Hub.


Benjamin Rasmussen for Time

But ethereum has made a white minority unfathomable, spewed pollutants into the air, and became a vehicle for tax evasion, money laundering, and incredible scams. “Cryptocurrency itself has a lot of dystopian potential if not implemented properly,” the Russian-born Canadian explained in an 80-minute interview in his hotel room the morning after the party.

Buterin worries that the dangers to over-eager investors, skyrocketing transaction fees, and outrageous displays of wealth have dominated public perceptions of cryptocurrencies. “The danger is that you have these $3 million monkeys, and it becomes another gamble,” he said, referring to the Boring Ape Yacht Club, an ultra-popular NFT collection of fancy primates Cartoons, digital-age status symbols that have become millionaires include Jimmy Fallon and Paris Hilton, who have traded for more than $1 million. “There must be a lot of people just buying yachts and Lambos.”

Buterin wants Ethereum to be the launching pad for all kinds of sociopolitical experiments: fairer voting systems, urban planning, universal basic income, public works projects. Most importantly, he wants the platform to counteract authoritarian governments and subvert Silicon Valley’s grip on our digital lives. But he admits that his vision for the transformative power of ethereum risks being replaced by greed. As a result, he reluctantly began to take on a larger public role in shaping his future. “If we don’t exercise our voice, the only things we can build up are those that are immediately profitable,” he said, his voice fidgeting as his hands fidgeted between the cushions of a bumpy grey sofa Ups and downs. “And those are often far from what’s really best for the world.”

Ironically, despite Buterin’s reputation, he may not have the power to stop Ethereum from going off course. That’s because he designed it as a decentralized platform that responds not only to his own vision, but also to the wishes of its builders, investors, and expanding community. Buterin is not the official leader of Ethereum. He fundamentally rejects the idea that anyone should have unilateral power over their future.


Buterin wears Shiba Inu pajama bottoms on stage at ETHDenver

Benjamin Rasmussen

This makes Buterin dependent on limited tools of soft power: writing blog posts, giving interviews, conducting research, speaking at conferences where many attendees just want to bask in the light of their newfound wealth. “I was yelling all the time, and sometimes it felt like howling in the wind,” he said, his eyes scanning the room. Whether his approach works (and how much Buterin has influenced his own creativity) could be the difference between a future where Ethereum is the foundation of a new age of digital life and a future where it’s just another vehicle for financial speculation – credit defaults and utopias exchange of forms.

Three days after music went off the air at ETHDenver , Buterin turned his attention to the world, back to the region where he was born. Cryptocurrencies almost immediately became a tool of Ukrainian resistance in the war waged by Russian President Vladimir Putin. In the first three weeks of the invasion, more than $100 million in cryptocurrency was raised for the Ukrainian government and NGOs. Cryptocurrencies also provide a lifeline for some fleeing Ukrainians who cannot get into banks. Meanwhile, regulators fear it could be used by Russian oligarchs to evade sanctions.

Buterin has also moved into action, directing hundreds of thousands of dollars in grants to disaster relief efforts  and publicly attacking Putin’s decision to invade. “The silver lining of what’s happened over the past three weeks is that it’s reminding a lot of people in the crypto space that the ultimate goal of crypto is not to play games with million-dollar monkey photos, but to do things that can be done to produce meaning in the real world. impact,” Buterin wrote in an email to TIME on March 14 .

His outspoken advocacy marks a shift for a leader who has been slow to find his political voice. “One of the decisions I made in 2022 was to try to be more adventurous and less neutral,” Buterin said. “I’d rather Ethereum offend some people than be a nonsense.”

The war is personal to Buterin, who is of Russian and Ukrainian descent. He was born on the outskirts of Moscow in 1994, a few years after the collapse of the Soviet Union, by two computer scientists, Dmitry Buterin and Natalia Ameline. The monetary and social system had collapsed; his mother’s parents had lost their life savings due to inflation. “Growing up in the Soviet Union, I didn’t realize that most of the good things I was told in school, like communism, were propaganda,” Dmitry explained. “So I want Vitalik to question traditions and beliefs and he grows up to be a very independent thinker.”

The family originally lived in a college dorm with a shared bathroom. There are no disposable diapers, so his parents wash him by hand. Vitalik grew up with a turbulent, dynamic mind. Dmitry said Vitalik learned to read before he fell asleep, and his sentence formation was slow compared to his peers. “Because he was thinking so fast,” recalls Dmitry, “and he actually had a hard time expressing himself for a while.”

Instead, Vitalik favors the clarity of numbers. At age 4, he inherited his parents’ old IBM computer and started playing with Excel spreadsheets. At the age of 7, he could memorize more than 100 digits of pi and shout out mathematical equations to pass the time. At age 12, he was coding in the Microsoft Office Suite. The isolation from his peers was exacerbated by the move to Toronto in 2000, the same year Putin was elected for the first time. His father described Vitalik’s upbringing in Canada as “lucky and naive”. Vitalik himself used the term “loneliness and isolation”.


Buterin at his IBM

Courtesy Dmitry Buterin

In 2011, Dmitry introduced Vitalik to Bitcoin, which was created after the 2008 financial crisis. After seeing the financial systems in Russia and the United States collapse, Dmitry was intrigued by the idea of ​​another source of global money that was not controlled by the authorities. Vitalik soon began writing articles exploring new technologies for Bitcoin Weekly magazine, for which he made 5 bitcoins at a time (about $4 at the time; today, about $200,000).

Even as a teenager, Vitalik Buterin proved to be an incisive writer, capable of expressing complex ideas about cryptocurrencies and their underlying technologies in clear prose. At 18, he co-founded Bitcoin Magazine and became its lead writer, gaining a following in Toronto and abroad. “A lot of people think of him as a quintessential technical engineer,” said Nathan Schneider, a professor of media studies at the University of Colorado Boulder who first interviewed Buterin in 2014. “But more so at the heart of his practice is observation and writing — which helps him see a cohesive vision that no one else has yet.”

As Buterin learned more about the blockchain technology that built Bitcoin, he came to believe that using it purely for currency would be a waste. He believes that blockchain can be an effective way to protect all kinds of assets: web applications, organizations, financial derivatives, non-predatory lending schemes, and even wills. Each of these can be operated through “smart contracts,” codes that can be programmed to transact without the need for an intermediary. For example, a decentralized version of the ride-sharing industry could be built, sending money directly from passengers to drivers, without Uber taking a cut of the proceeds.

In 2013, Buterin dropped out of college and wrote a 36-page white paper laying out his vision for Ethereum: a new open-source blockchain on which programmers could build any type of application they wanted . (Buterin removed the name from Wikipedia’s list of science fiction elements.) He sent it to friends in the Bitcoin community, and they spread it around. Soon, a handful of programmers and businessmen around the world approached Buterin, hoping to help him make it a reality. Within a few months, eight people who would later become known as the Ethereum founders shared a three-story Airbnb in Switzerland, writing code and attracting investors.

According to a recent book by Laura Shin on the history of Bitcoin, while some other founders have mixed work and play — watching Game of Thrones, convincing friends to bring beers in exchange for ether IOUs — But Buterin spends most of his time alone, coding on his laptop. Ethereum , Cryptopians . Over time, it became clear that the group had very different plans for emerging technologies. Buterin wants a decentralized open platform on which anyone can build anything. Others want to use the technology to start businesses. One idea is to build a cryptocurrency equivalent to Google, where Ethereum would use customer data to sell targeted ads.  These people also quarrel over power and titles. One co-founder, Charles Hoskinson, named himself CEO — buterin wasn’t interested, joking that his title was C-3PO, taken from the “Star Wars” droid.

The ensuing conflict left Buterin with culture shock. In a matter of months, he has gone from a recluse writing code and technical articles to a decision maker battling a bloated ego and power struggles. His vision for Ethereum is up in the air. “The biggest divide is definitely that a lot of these people care about making money. For me, that’s not my goal at all,”  a spokesperson confirmed to public records on the blockchain, who has a net worth of at least 8 One hundred million U.S. dollars.  “In the beginning, I was even negotiating a lower percentage of the ether distribution that myself and other top founders would receive to be more equal. It really upset them.”


Buterin said other founders tried to use his naivety to push their own ideas about how ethereum should work. “People used my fear of regulators against me,” he recalls, “saying we should have a for-profit entity because it’s legally so much simpler than being a nonprofit.” As tensions grew , the group implored Buterin to make a decision. In June 2014, he asked Hoskinson and Amir Chetrit, the two co-founders who propelled Ethereum into an enterprise, to leave the group. He then launched the creation of the Ethereum Foundation (EF), a non-profit organization to protect Ethereum’s infrastructure and fund research and development projects.

Over the next few years, all the other founders left one by one to pursue their own projects, either working with Ethereum or as direct competitors. Some of them remain critical of Buterin’s approach. “In the dichotomy between centralization and anarchy, Ethereum seems to be heading for anarchy,” said Hoskinson, who now leads his own blockchain, Cardano. “We think there is a middle ground for creating some sort of blockchain-based governance system.”

With the founder split, Buterin became Ethereum’s philosophical leader. He holds a seat on the EF Board of Directors and has the clout to influence industry trends and drive the market through public statements. He is even known as “V God” in China. But he did not fully enter the power vacuum. “He’s not good at directing people around him,” said EF executive director Aya Miyaguchi. “From a social navigation standpoint, he’s immature. He’s probably still conflict-averse,” said EF’s lead researcher, Danny Ryan. Buterin called his efforts to take on the role of organizational leader “the curse of my early years on Ethereum.”

It’s not hard to see why. When you meet Buterin, he still doesn’t exhibit stereotypical leadership qualities. He sobbed, stammered, and walked stiffly, trying to maintain eye contact. He pays little attention to clothes, mostly wearing Uniqlo T-shirts or clothes given to him by friends. His disheveled appearance makes him an easy target on social media: He recently shared insults from online questioners who said he looked like a “Bond villain” or an “alien lunatic.”

Yet almost everyone who spoke to Buterin at length was full of stars. Buterin is very entertaining and almost completely free of egos or egos. He’s an unabashed geek, and his eyes light up when he sees one of his favorite concepts, be it secondary voting or governance system futarchy. Just as Ethereum was designed to be an all-purpose machine, Buterin is an all-purpose thinker, proficient in everything from sociological theory to advanced calculus to the history of land taxes. (He’s currently using Duolingo to learn his fifth and sixth languages.) He doesn’t speak to people, and he avoids security details. “The emotional part of me says that once you start down this road, specialization is another word for losing your soul,” he said.


Buterin, seen via ETHDenver’s monitor

Benjamin Rasmussen

Alexis Ohanian, co-founder of Reddit and major cryptocurrency investor, said being around Buterin gave him “a kind of connection to Tim Berners-Lee, the inventor of the World Wide Web that I first met. Jazz-like atmosphere”. “He’s very thoughtful and humble,” Ohanian said, “and he’s giving the world some of the most powerful Lego bricks it’s ever seen.”

Buterin has grappled with how much power to exercise in Ethereum’s decentralized ecosystem for years. The first big test came in 2016, when a newly created Ethereum-based fundraiser called The DAO was hacked for $60 million, which at the time accounted for more than 4% of all ether in circulation. The hack tested the values ​​of the crypto community: if they truly believed that no central authority should not take over the code governing smart contracts, then thousands of investors would have to eat their losses – which in turn would encourage more hacker. On the other hand, if Buterin chooses to reverse the hack using a tactic known as a hard fork, he will exercise the same central authority as the financial system he is trying to replace.

Buterin took a middle ground. He consulted with other ethereum leaders, wrote blog posts advocating for a hard fork, and saw the community vote overwhelmingly for the option through forums and petitions. When Ethereum developers create a fork, users and miners can choose to stick with a hacked version of the blockchain. But they overwhelmingly chose the forked version, and Ethereum quickly regained its value.

For Buterin, the DAO hack embodies the promise of a decentralized approach to governance. “Leaders have to rely more on soft power than hard power, so leaders have to really consider the feelings of the community and respect them,” he said. “Leaderships are not fixed, so if leaders stop working, the world forgets them. Conversely, it’s easy for new leaders to come to power.”

Over the past few years, countless leaders have emerged in Ethereum, building various products, tokens, and subcultures. 2017 saw an ICO boom, with venture capitalists raising billions for blockchain projects. 2020 has the DeFi summer, with new trading mechanisms and derivatives structures sending funds around the world at super-fast speeds. Last year also saw an explosion of NFTs: tradable digital goods, such as avatars, art collectibles and sports cards, soared in value.

Skeptics scoff at the utility of NFTs, where billion-dollar economies are built on perceived digital ownership of simple images that can be easily copied and pasted. But they have quickly become one of the most used components in the Ethereum ecosystem. In January, NFT trading platform OpenSea hit a record $5 billion in monthly sales.

otbhCV1zIKkflmLCPNaZjwqaCSEUrQRORHypD9M3.pngConference attendees line up to ask questions after Buterin’s keynote

Benjamin Rasmussen

Rather than predicting the rise of NFTs, Buterin observed the phenomenon with interest and anxiety. On the one hand, they have helped boost the price of ether, which has grown more than tenfold in value over the past two years. (Disclosure: I bought less than $1,300 worth of ether in 2021.) But their volume has overwhelmed the network, causing congestion fees to skyrocket, e.g. bidders trying to get paid hundreds of dollars in extra for rare NFTs fees to ensure their transactions are expedited.

The fees derail  some of Buterin’s favorite projects on the blockchain. Take Proof of Humanity, which pays anyone who signs up a universal basic income  currently around $40 a month. Depending on the week, the network’s congestion charges can make it prohibitively expensive to pull money out of your wallet to cover basic needs. “The fees are like this right now,” Buterin said, “and it’s really getting to the point where the derivatives and gambling stuff is starting to price some cool stuff.”

Inequality has spilled over into the crypto space in other ways, including a severe lack of gender and racial diversity. “It’s not one of those things that I put a lot of intellectual effort into,” Buterin admits to gender equality. “The ecosystem there really needs to improve.” He scoffed at the dominance of token voting, with Buterin arguing that the DAO’s voting process  is just a new version of plutocratic rule, where wealthy venture capitalists can make their own decisions with little resistance. profitable decision. “It’s become the de facto standard, and it’s the dystopia I’ve seen over the past few years,” he said.

These issues have sparked backlash within and outside the blockchain community. As cryptocurrencies move toward the mainstream, their esoteric jargon, idiosyncratic culture, and financial excesses are widely disdained. Meanwhile, frustrated users are turning to newer blockchains like Solana and the BNB Chain, driven by the prospect of lower transaction fees, alternative building tools, or different philosophical values.

Buterin understands why people should stay away from Ethereum. Unlike almost any other leader in the trillion-dollar industry, he says he’s fine with it — especially given the fact that Ethereum’s current problems stem from the fact that it has too many users. (The loss of a huge fortune doesn’t worry him too much: last year, he threw away $6 billion worth of Shiba Inu tokens that were given to him, explaining that he wanted to donate some to charity to help maintain the meme coin’s value, then surrendering to his role as “center of power.”)

Meanwhile, a representative confirmed that he and EF, which holds nearly $1 billion worth of ether reserves, are taking a variety of approaches to improve the ecosystem. Last year, they handed out $27 million to ethereum-based projects, up from $7.7 million in 2019, to smart contract developers and educational conferences in Lagos.

The EF research team is also working on two important technical updates. The first, dubbed “merge,” converts ethereum from proof-of-work (a form of blockchain verification) to proof-of-stake, which EF says will reduce ethereum’s energy usage by more than 99 percent and enable the network safer. Buterin has struggled with proof-of-stake since the inception of Ethereum, but repeated delays have turned implementation into a wait-for-Godot -style drama. At ETHDenver, EF researcher Danny Ryan announced that the merger will happen within the next six months, barring a “crazy catastrophic event”. On the same day, Buterin encouraged companies concerned about the environmental impact to hold off on using ethereum until the merger was complete — even if it was “delayed to 2025.”


ETHDenver attendee Brent Burdick checks his phone in the NFT gallery room

Benjamin Rasmussen

In January, Moxie Marlinspike, co-founder of messaging app Signal, wrote a widely read review noting that despite collectivist slogans, the so-called web3 had merged around centralized platforms. As he often does when faced with legitimate criticism, Buterin made a thoughtful, detailed post on Reddit. “The world of properly validated decentralized blockchains is coming, and it’s closer than many people think,” he wrote. “I don’t see a reason why the future needs technology like it does today.”

Buterin realizes that the utopian promises of cryptocurrencies sound outdated to many, and calls the race to implement sharding in the face of competition a “time bomb.” “If we don’t have fast enough sharding, then people may start migrating to more centralized solutions,” he said. “If it’s still focused after all these things, then yes, there’s a stronger argument that there’s a big problem.”

With the technical issues resolved, Buterin turned his attention to the larger socio-political issues he believes blockchain could potentially solve. On his blog and Twitter, you’ll find papers on housing; on voting systems; on the best way to distribute public goods; research on urban construction and longevity. While Buterin has lived in Singapore most of the time during the pandemic, he is increasingly living as a digital nomad, writing letters on the road.

Those familiar with Buterin have noticed a philosophical shift over the years. “He’s gone through a journey from a more sympathetic anarcho-capitalist thinking to a Georgian thinking,” said economist Glenn Weir, one of his close collaborators, referring to a belief that the value of the commons should be equal. theory for all members of society. A recent post by Buterin called for the creation of a new type of NFT that is not based on monetary value, but on participation and identity. For example, the distribution of votes in an organization may depend on individuals’ commitment to the group, rather than the number of tokens they own. “NFTs can represent more about who you are than just what you can afford,” he wrote.

While Buterin’s blog is one of his primary tools for public persuasion, his posts are not intended to be decrees, but rather intellectual explorations that spark debate. Buterin often dissects the flaws of obscure ideas he once enthusiastically wrote about, such as the Harberger tax. His blog is a model of how leaders can approach complex ideas with transparency and rigor, exposing the chaotic process of intellectual growth to all, and perhaps learning from it.

Some of Buterin’s more radical ideas may be alarming. In January, he sparked mild outrage on Twitter for advocating artificial wombs, which he believes could narrow the pay gap between men and women. He predicts that a person born today is likely to live to be 3,000 years old and take the anti-diabetic drug metformin in hopes of slowing his body’s aging, although studies on the drug’s efficacy are mixed.

As government agencies prepare to venture into crypto — in March, President Biden signed an executive order seeking a  federal program to regulate digital assets — Buterin is increasingly sought after by politicians.  At ETHDenver, he spoke privately with Colorado Gov. Jared Polis, a pro-crypto Democrat. Buterin is anxious about the political valence of crypto in the U.S., and Republicans are generally more eager to embrace it. “There are definitely signs that crypto seems to be about to become a right-leaning thing,” Buterin said. “If it does happen, we will sacrifice a lot of the potential it offers.”

For Buterin, the worst-case scenario for the future of crypto is the eventual concentration of blockchain technology in the hands of authoritarian governments. He was unhappy with El Salvador’s introduction of bitcoin as legal tender, which was riddled with identity theft and volatility. The prospect of governments using the technology to fight dissent is one reason Buterin insists cryptocurrencies remain decentralized. He sees the technology as the most powerful equalizer of surveillance technology deployed by governments (like China) and powerful companies (like Meta).

Buterin argues that if Mark Zuckerberg shouldn’t have the power to make era-changing decisions or control user data for his own gain, neither should he — even if it limits his ability to shape the future of his creations, putting some people send to other blockchains, or allow others to use his platform in obnoxious ways. “I want an ecosystem with a lot of good lunatics and bad lunatics,” Buterin said. “Bad madness is when a lot of money is siphoned off and all it does is subsidize the hacking industry. Good madness is when tech jobs, R&D, and public goods appear on the other end. And then there’s this battle. We have to be conscious , to make sure more of the right things happen.”

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