Vitalik Buterin on NFT, DeFi, and the Ether 2.0 Development Process

At the just-concluded Ether Virtual Summit, Ether co-founder Vitalik Buterin spoke on NFT, DAO, DeFi, and the future of cryptocurrency development.

On May 8, at the just-concluded Ether Virtual Summit, Ether co-founder Vitalik Buterin spoke on NFT, DAO, DeFi and the future of cryptocurrencies. During the meeting, the Ether Foundation also pointed out that Ether’s new goal is to have 1 billion new users.

V-God said that decentralized organizations (or DAOs) exist as a set of smart contracts on the Ether blockchain that allow people to organize in a non-hierarchical structure. Their popularity has skyrocketed in recent months with the passage of a bill in Wyoming that gives them legal status.

Vitalik also pointed to the role of decentralized finance (DeFi) and NFT in accelerating ethereum adoption. People talk a lot about the DeFi space, and NFT has really managed to get into the mainstream business and attract a lot of interest,” he said.

NFT is the special property that makes it possible to link to digital content such as images and music. The popularity of digital artwork has exploded in recent months as major brands and celebrities have launched their own NFTs, and the multi-million dollar sales of individual products have dominated the headlines.

Vitalik Buterin on NFT, DeFi, and the Ether 2.0 Development Process

While Vitalik acknowledges that NFTs have a “speculative side,” he is excited about their potential to “allow people who didn’t have a business model at all before to finally have some sort of business model for the first time. This could include creators, artists, and even charities, he added. Something like this could be used as a way to make some interactions happen that weren’t possible before,” he said. That’s already a great result.

Ether 2.0
Vitalik’s top priority is to help with the transition to Ether 2.0, the long-awaited upgrade that will see Ether move from a PoW consensus mechanism to a more environmentally friendly PoS model.

As the merger gets closer, the roadmap is becoming more pragmatic in many ways,” Vitalik said. According to his “optimistic estimates,” the long-awaited upgrade is expected to happen this year. Unlike two blockchains, where assets are moved from one to the other (which was the original vision for 2018), the network upgrade aims to minimize disruptions for users and developers and promises much greater scalability through sharding and ‘other things’.

Perhaps the biggest compromise is that the new PoS chain will not contain the transaction history of the old PoW chain, which was renamed the ‘execution chain’. Meanwhile, the Beacon chain, which introduced PoS into the Ethernet network, will be renamed the Consensus chain.

After the merger, the execution chain will be located within the consensus chain,” Vitalik explained. Each beacon chain block will contain one execution chain block. So it’s like a chain within a chain. This is designed to “make the merging process as simple and smooth as possible for users, customers, developers, and contract and application developers. He added: “There’s a lot of complex technology in the background of the game, but from the user’s perspective, you don’t have to worry too much about that.

The entire transaction history of the blockchain will remain in this PoW working chain. But eventually, the Ethernet client will remove the old code and will no longer be compatible with the new version. People will have to use old nodes or create special-purpose protocols to handle really old data,” he explained.

He noted that tools like The Graph that can effectively locate old data are already available, and that new tools are in development.

New changes to Ether
The decision not to include old data was a necessary trade-off,” said V. “We definitely don’t want Ether nodes to continue to get more clunky and complex over time.

I don’t think it will break invariance because the hash chain is still there,” so it can still be checked, but V God also realizes that Bitcoin advocates may not see eye to eye. “I think there’s a real cultural difference in terms of expectations,” he says. “[Bitcoin users] really value the idea that with today’s Bitcoin nodes, you can verify everything that happens from day one. For ethereum, that’s not the case; future researchers will have to use an older client to check older parts of the chain. He added that the difference in the relationship between the community and the blockchain isn’t the only thing that separates the Bitcoin and Ether communities.

Ether aims for 1 billion new users
Aya Miyaguchi, executive director of the Ethereum Foundation, which manages the ethereum network, also joined Vitalik Buterin for the discussion, discussing what needs to be done to get ethereum to 1 billion new users, including working with UNICEF. This collaborative initiative aims to connect people to the Internet, initially targeting schools.

She also expressed interest from African governments to participate in investing in the network as a way to gain more financial independence. In the near future, the foundation will collaborate in more academic areas, expanding into economics and social sciences, and provide more funding for under-resourced applications that use the network.

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