The founder of Ethereum held an open lecture in the Moscow Digital October centre sharing his thoughts on the system’s advance, lessons learnt from TheDAO attack and SegWit vs BU dilemma.
In March, Ethereum presented a new roadmap for the development of the blockchain platform, which suggests a gradual transfer from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus algorithm. During the Q&A session at Digital October, Buterin explained how it might work:
“At the first stage, we have a PoW chain, but there is a consensus around every hundredth block. Around it, there are validators who put their ethers into a contract and are able to send [supportive] messages. When there is a correct combination of messages, the block is considered finalised, and the clients that understand PoW rules can accept this block as finalised.”
According to Buterin, in the near term, the time between blocks would not change but in the perspective, it may become two or three times shorter. Furthermore, the amount of ether released with each block will decrease because there will be no need in high rewards for miners.
“There will be no miners at all in the very last version. The price of gas would go down because the reward for blocks will go down and the initiative not to include transactions into blocks will go down as well (as long as blocks are not full).”
When asked if the PoS algorithm is actually very far from the principles of Satoshi Nakamoto and prone to centralisation, Buterin emphasised that the new consensus model would allow for a fairer and easier functioning of the network, comparing to bitcoin’s PoW:
“Both systems have a risk of centralisation. A very small number of miners control most of the network. This problem is not easy to resolve. For starters, we are trying to make the most honest algorithm […] That is, if one has 10 times more coins, the income will be 10 times higher. With PoW, their income might be 11 times higher. […] The aim is, even if one computer controls the most of the network and can perform a 51% attack, that it would not destroy the system. We might need to go for a hard fork to keep the system alive. But the attacker would only do it once and, as the result, lose all their money.”
Speaking about one of the most dramatic moments in the history of Ethereum – TheDAO crisis of 2016, when over $60 million was stolen from the distributed autonomous organisation due to a vulnerability in the code – Buterin shared what lessons the developers learnt from the incident.
“I believe, the fact that Ethereum has several implementations and clients actually saved our network. For example, Geth could not process certain transactions, while Parity could, and the other way round. It helped the system survive the attacks.”
Another serious advantage, according to him, is that the system has very short time between blocks allowing the team to respond promptly to a threat.
Commenting on the ongoing confrontation between supporters of SegWit and Bitcoin Unlimited scaling solutions in the bitcoin system, Vitalik claimed it is a purely political matter:
“It is not a technical issue, but I don’t believe either that it’s all about money. Rather, it’s a political struggle between two sides, each having their own ideology. It’s just like American politics.”
Talking about the blockchain systems that may be able to compete in speed with established payment systems, such as Visa and Mastercard, Buterin named two technologies – bitcoin’s Lightning Network and Ethereum’s Raiden Network. Another option is sharding, which implies that a network can contain several blockchains at once and, therefore, have an improved scaling capacity.
The open lecture with took place on 11 April with the support of Waves blockchain platform.