Vitalik Buterin, co-creator of the second most-favored cryptocurrency, conversed with CNBC's MacKenzie Sigalos in Prague -one of the latest crypto havens in Europe. He discussed the expanding suppression of crypto in the U.S. and pointed out that emerging countries will maintain the crypto revolution alive. Furthermore, he talked about his notable role in the cryptocurrency he initiated but argued that his venture has taken on a life of its own and is for this reason more tolerant to government crackdowns.
Vitalik Buterin's idea of home is ever-changing, as he is constantly relocating and his list of places he won't go is increasing. He admitted in an interview in the Czech Republic that he is apprehensive about visiting countries he would have gladly visited just three years ago, Russia being one of them due to his active support for the Ukrainian resistance movement. His worries deepen as developers like the creators of the open-source protocol Tornado Cash are being charged by both the US and the Netherlands, indicating that privacy technology and open-source code use is not safe in certain global jurisdictions.
"Even in countries normally considered 'normal,' I definitely worry about those more," Buterin stated. His decentralized lifestyle allows him to maintain his influence in the crypto sector and stay in cities like Prague with like-minded people who are looking to make a change using cryptography-based tech.
We convened in a room at the top of a sprawling industrial complex in the Holešovice district—once renowned for slaughterhouses and steam mills, now concentrated with Bohemian artists and the most rebellious of crypto believers. This unremarkable exterior conceals a maze of ramps and staircases that illustrate the intricacy of crypto to the uninformed.
The current verve within Buterin and the ethereum community is ensuring that it bestows substantial value to people. "I regard the ethereum ecosystem like the past decade was devoted to perfecting ethereum”, Buterin elucidated while leaning forward from his kneeling desk chair, “whereas this decade is designated for actualizing things that people use".
He is the most influential cryptographic developer living today, though he wasn't seeking adulation when he drafted the ethereum white paper in 2013. Despite declining to converse with the press and remaining humble over the years, his prominence has only swelled—notably becoming the world's youngest crypto billionaire at age 27. Chinese communities identify him as “V God”, Time Magazine freshly credited him as “crypto royalty” in its April 2022 cover feature, while crowds of admirers clamor to get a photo with him wherever he travels.
Buterin, however, isn't a prince of crypto, a cypherpunks’ leader, a wonk, or a nerd. In fact, he donates much of his wealth to philanthropic causes, thereby lowering his net value. Moreover, he does not consider himself the ultimate authority on the ethereum network. What he does believe in is establishing a world where people have even access to money regardless of their identity or geography.
Vitalik Buterin observes that cryptocurrencies have seen greater utility in the emerging markets in recent times. "Simple features like making payments and savings are actions that have immense value," he observes. He further noted that connecting to international economy is an indispensable need in low income countries. Hence, there is much more focus on basic functionalities than on niche topics such as decentralized social media.
As crypto regulations tighten in the U.S., the activity in the crypto markets has shifted overseas. Here, investors focus on profiting from the rise and fall of crypto prices. As Buterin visited Africa earlier this year, he found a pattern of usage and recognition of cryptos in the developing economies, which are far more attractive than the U.S.
To truly reap the benefits of cryptos, users must be able to bypass centralized entities such as custodial trading platforms, and the complexity of using them must be simplified. In countries with low GDPs, crypto exchanges like Binance offer users a better experience, but the problem of centralized control still persists. Fraud in the crypto industry has made it evident that users must be able to transact directly on the chain. To make this possible, the blockchain technology must be advanced to achieve transaction fees of less than five cent and the user experience must be made intuitive and reliable.
Privacy and security are of utmost importance to Ethereum's Vitalik Buterin. According to him, digital wallets should be secure enough that if users lose their keys, they will not lose everything. A potential national digital currency should have the ease of use that Buterin envisages, but must also be decentralized to avoid becoming another version of the existing banking system with even more surveillance. On the central bank digital currencies or CBDCs, Buterin had more hope five years ago as they promised blockchain-friendliness, transparency, verifiability guarantees, and some level of privacy. But as the CBDCs gain traction, there is a fear that these digital currencies could include financial surveillance and monitoring tools. Buterin expresses his concern that these technology achieve minimal success in providing privacy, only leading to "systems that are not actually much better than existing payment systems". He added that this could lead to a situation where corporations and governments have less privacy.
Vitalik's father Dmitry introduced him to bitcoin back in 2011. Dmitry, a computer scientist who had been living outside Moscow, found it interesting that a decentralized currency was operating outside the jurisdiction of any government or central bank. Knowing its potential, Vitalik wanted to take it one step further by building smart contracts into the blockchain. Needless to say, this game-changing innovation revolutionized the sector with an influx of projects and Initial Coin Offerings (ICOs) based on ethereum. Now, it is the primary platform for crypto projects like Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi) and Web3, a somewhat abstract term for a third generation of the internet with decentralization and blockchain technology at its core. Ethereum's native token ether is now the second-largest cryptocurrency by market capitalization after bitcoin.
Within Ethereum's sphere, hackers are popularly referred to as BUIDLers - a playful and strategic distortion of the word "builders" that pays tribute to Bitcoin's legendary meme HODL (which stands for “hold on for dear life”). While such meme wars may seem trivial, it does bring out the fundamental contrast between Bitcoiners and Ethereum programmers.The former take a more conservative track, emphasizing the security and decentralization aspects of the blockchain more than anything else. On the other hand, the latter take a more daring approach and embrace a rapid-fire approach to tinkering and experimentations. For example, Ethereum drastically changed the way it secures its networks and verifies transactions last year, decreasing the energy consumption by a staggering 99%.Before this upgrade, both Bitcoin and Ethereum had their own expansive network of miners scattered across the globe, running a variety of computers to solve complex math problems to validate digital transactions. This mechanism, known as Proof-of-Work, has been the subject of much criticism, due to its massive energy consumption.In response, Ethereum switched to a different system, known as proof-of-stake, which replaces miners with validators. Instead of using heavy machinery, validators make use of their existing cache of Ether to verify digital transactions and mint new tokens.Vitalik Buterin, the co-founder of Ethereum, asserted that the shift to proof-of-stake model is more resilient and resistant to governmental intrusion. He believes that proof-of-stake is simpler to keep anonymous and is more challenging to shut down, compared to proof-of-work. He further remarked that to hide the former, all one needs is a laptop, a VPN server and a corner to conceal the setup.
At his recent gathering in Prague, Buterin exhibited a new degree of confidence as he seamlessly transitioned from reticent coder to an enthusiastic teacher. His ability to talk openly about complex matters such as Quadratic Funding, Soulbound Digital Identities, and his own leadership predicament has earned him a reputation as an insightful thinker in the crypto world. To the concern that his open identity makes Ethereum vulnerable to government interference, Buterin has stated that more of the operations have been assumed by independent clients, thus mitigating potential risk. He also stresses the need to protect privacy in the Ethereum platform through Zero Knowledge Rollups. Despite his prominence, Buterin is not an outlaw nor targeted by any country, though he is weary of going to certain countries due to the nature of his work.
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