Vitalik Buterin About Ethereum, Smart Contracts, and Himself

This week, Vitalik Buterin visited Russia to participate in Ethereum Russia 2016 conference. Over the course of the event, the platform’s founder talked with Russian crypto-enthusiasts, entrepreneurs and government officials.

Recent hype around Ethereum is quite understandable considering the opportunities offered by the technology. The fact that the idea went that far without any major investors involved, and especially the fact that Ether’s market cap currently stands at around $1 billion, is truly amazing.

ForkLog collected Buterin’s most interesting quotes from the conference and his interview with Forbes Russia.

HOW ETHEREUM WAS BORN

According to Buterin, he dropped out of university and started travelling across the globe seeking for bitcoin projects. Eventually, he found himself in Israel, where he met lots of people looking for different ways of implementing blockchain technology. While acknowledging that those projects were interesting, Buterin compared them to Swiss army knife, as they offered separate protocols and specific kinds of transactions for each blockchain implementation.

“I came up with the idea of making a universal platform with internal programming language, so that everyone could write any app. I wrote a white paper and sent it to 15 friends to criticize, they sent it to their friends, and in a fortnight nearly 20 people answered me that the project was interesting, and they were willing to help with programming, marketing, and founding a startup,” he said.

Buterin said they chose a non-commercial approach to create a system that nobody would own.

“We got a grant from The Thiel Fellowship, Peter Thiel’s foundation. We had no venture investment. Those who started Ethereum wanted to develop the project following the rules of venture investment, but I was thumbs down. I wanted the underlying infrastructure of the platform to be created by a NPO. That was the only way to make people accept the idea of the system’s decentralization and indepenence that underpins Ethereum. Now we work via Ethereum Foundation, and it doesn’t seek profits. Back in 2011, we launched a crowdsale: people sent us 1 bitcoin in exchange for 2,000 Ethers. Thus we got 30,000 BTC that we used for payroll. It was $18.5 at the exchange rate back then. We still use the money. Ethereum Foundation currently operates around $12 million. We have wages, but we need money only to develop the technology. Many Ethereum Foundation members have their own Ethereum-based projects they consider their future source of revenue.”

ABOUT THE TEAM

“There are 30 people in our team. They are from different parts of the world. We’re headquartered in Switzerland (there are 3 to 4 people), also we have an office for 5 to 7 people in Berlin, there are individual developers from Canada, China, Poland, Russia, and Brazil. I know them all personally. Even though we have managers, the management system itself is more horizontal than elsewhere.”

“Ethereum Foundation employees get their wages for coding. The money we’ve got is enough for four years of the team’s work. We spend $2.3 million a year, and have $13 million to spare. So we have no short-term need for money.”

ETHEREUM VS BITCOIN

According to Buterin, the main difference between Ethereum and Bitcoin lies in the fact that the former is built around the concept of decentralization that could guarantee the system’s safety. Ethereum, in its turn, is a tool to create any decentralized online service.

“Imagine a village that decided to make accounts for everyone passing down the main street. They may assign a person responsible for the list who would write down new strangers. However, the entire village has to trust this person, as he or she may describe the events improperly, on purpose or not. And, the other way round, they could make everyone in the village have their own copy of the list, and write things down only after they ensured that the previous records are correct. If a tourist wants to know about the history of passings for the recent year, he or she will have to look through all the books. And, if there are some discrepancies, he or she will be able to find out what the majority of the villagers believes to be true.”

“Bitcoin is a book where you may write only in one language and only about movement of people. Ethereum is more flexible. Universal mathematical formulae are the language of its book.”

SMART CONTRACTS

“Ethereum may store the cryptocurrency transfer history, but that’s not what it is about. Our blockchain records data on a contract (smart contract). It has a balance (how much ETH there is), and a history of transactions it had been involved in. Any contract has its own internal memory containing a code. When an item participates in a transaction, the code gets executed. It may work with data from the memory and create new transactions. Thus one may encode any kind of rules or any sequence of events that have to happen should the rules are observed. Programmable contracts managed and protected by blockchain may apply to diverse interactions between parties.”

ETHEREUM’S ADVANTAGES

Buterin believes Ethereum has several advantages, including its capability of being an underbed for diverse applications: digital property, financial contracts, registration of non-finance data, data storage, and so on. He also noted that development of such applications would be easy and fast.

“Coders tell us that it’s easy for them to develop apps on Ethereum. The community will grow due to this easiness. If 2016 is the year of experiments and testing, we’ll see serious projects in 2017 and 2018.”

Buterin noted that it doesn’t really matter which blockchain applications would work, and which would not, as the platform will remain useful in any case. Ethereum’s direction is to be chosen by the community, not some individuals.

DAO CROWDFUNDING

Buterin also spoke about fundraising by different projects focusing on the concept of DAO.

“DAO is completely managed by the blockchain. Anyone may describe an idea and launch pre-sale of tokens […] Owners of the tokens may make decisions collectively by voting. This process, due to blockchain’s merits, is transparent and lacks a center. Token owners decide how to use money intended for development, and send them to the contractor with a smart contract. Token owners may decide whether project revenue is to be reinvested, safely kept, or distributed as dividends.”

“Slock.it developers have already launched a ‘decentralized venture foundation’ enabling anyone to invest Ethers in different projects and have their shares.”

ABOUT HIMSELF

Buterin was born in Russia and lived in a small town of Kolomna until he was six, when his family moved to Canada. That’s where he became so keen on computers.

“I was playing with a computer since my childhood, I wrote macroses in Excel. When I was 10, my dad (Dmitri Buterin, who currently works at software company Wild Apricot – FL) presented me a few books on programming. When I was 12, I started coding in C++ and used Allegro library. Initially I wrote simple games, then switched to more complex ones. Then I wrote such a complex game that there’s only one person in the world, aside from me, who could read the tutorial. I have two young sisters, they are four and seven. I graduated a school in Toronto, entered a university there, but dropped out of it in eight months for my work with blockchain.”

ABOUT BLOCKCHAIN HELPING THE WORLD

“Blockchain solves the problem of manipulation. When I speak about it in the West, people say they trust Google, Facebook, or their banks. But the rest of the world doesn’t trust organizations and corporations that much — I mean Africa, India, the Eastern Europe, or Russia. It’s not about the places where people are really rich. Blockchain’s opportunities are the highest in the countries that haven’t reached that level yet. I think the technology, if we do it right, may go in history books. Thanks to blockchain, many countries may rapidly develop their infrastructure.”

MAKING YOUR OWN ETHEREUM

“Now I’ll tell in thirty seconds how any coder may make their own Ethereum. They should read our code, it’s all open, go to Ethereum’s page at GitHub, and press Fork.”

 

Disclaimer: All quotes presented herein are taken from an unofficial translation from Russian, and thus may not be deemed an exact representation of Vitalik Buterin’s speech, however, they have been translated into English as precisely as possible to retain their general meaning.

  • Chiranjeevi Punna

    There’s great potentiality in this Blockchain concept. It’s almost suitable for every use case which deals with Data and transactions. Putting this concept into execution may difficult but surely never fail. All the best Buterin and team.