Here are a few of my takeaways after hearing Vitalik Buterin, founder of Ethereum, speak at a small gathering last week in San Francisco. Vitalik has become quite the icon in the blockchain space and it’s always fascinating to meet these people in real-life after seeing them online for so long. You can also checkout Blockchain at Berkley’s full livestream on Facebook here. The interview is a bit hard to hear unfortunately. Vitalk is being interview by Congressman Jason Hsu.
The Big Elephant in the Room
2018 marks the 10 year anniversary of Satoshi Nakamoto’s Bitcoin whitepaper. While the technology has seen a massive increase in interest and experimentation over the last decade, we’re still far from creating real life use cases for the average person using blockchain. According to Vitalik, the big elephant in the room is the large chasm between the hype and actual use cases. The main challenge we face in 2018 and 2019 will be bridging this gap so that the market cap reflects the actual value it’s generating, rather than just speculation. We’ve already seen a market correction this year with falling prices and low trading volumes, but there’s still a lot to do in order to make this technology usable.
Two Major Problems We Need to Solve For
In order to do this, Vitalik says we need to solve for two problems: 1) practical use cases / improved user experience and 2) improvement of the underlying technology on which to support these use cases. Today, there’s still a lot of friction when it comes using blockchain and cryptocurrencies, especially for the “average” non-technical person. Transaction costs are too high for everyday use unless you’re making really large transactions, plus they can vary wildly from hour to hour (sounds kinda like token values these days). As for privacy, there really isn’t much. Everything on the blockchain is public and can been by everyone else. The security of buying, holding and storing crypto is a big issue as well. We need to make it harder for normal people to be able to screw up and lose their crypto and easier to buy and use (think crypto ATM’s in corner stores).
Centralized vs Decentralized Exchanges
On central vs decentralized exchanges, Vitalik says centralized exchanges have too much concentrated power and influence on the price of tokens which leads to market manipulation. He believes decentralized exchanges will correct this problem.
When asked about his contrarian view that most people would disagree with him on, Vitalk stated that 95% of current blockchain projects are going to fail and there’s a 95% chance that your blockchain project is going to be one of them.
So there you go! Keep your head up and grind away but sounds like the best is yet to come. As history shows, incumbents are usually the ones to win the market but the hard work of paving the way must be done first so kudos to all of you who are building meaningful inroads to support the future possibilities of blockchain.