The 1st BSN Global Tech-Innovation Summit |Vitalik Buterin: Updates on Ethereum 2.0 Full Script

On November 27, 2020, Vitalik Buterin, co-founder of Ethereum, gave a keynote titled Updates on Ethereum 2.0 at the 1st BSN Global Tech-Innovation Summit in Wuhan, Hubei Province.

The full script is organized as follows (some minor edits were done):

Hello everyone! Thank you to the BSN Global Tech-Innovation Summit for letting me speak.

So, today here what I wanted to do was just to give everyone some quick updates on Ethereum 2.0. Where Ethereum 2.0 is at, where it is going, and how this can be relevant to blockchain users in general. And in particular, some of the Ethereum Enterprise use cases that I know and some of the projects around the BSN that are likely to be built for.

So, to start, one of the exciting milestones that we have had only in the last few days is the Ethereum 2.0 Proof-of-Stake chain. This is the first phase of the Eth2 effort that has hit the target for its deposits. So, what this means is that the code for the Ethereum to Proof-of-Stake chain is completely ready. And it has been ready for some time. But actually, launching the chain required a sufficient number of people, about 520,000 ether to actually deposit there into the system in order to become validators as part of this Proof-of-Stake system. We actually hit this target two days ago. So, now we’re actually far above the target. There is about 740,000 ether that’s ready to participate as validators in this new Proof-of-Stake network. So, what this means is that the Proof-of-Stake beacon chain is ready for launch. It is actually going to launch next week on Tuesday at 8 pm China time. So, everyone, get ready for that! And look forward to the first phase of this multi-year long Eth2 effort finally happening.

So Eth2 has been in this big, massive project that we have been working on for many years. and now, of course, the project is finally becoming reality with this Proof-of-Stake network launching early next week. So, it’s worth talking about to just briefly what are some of the benefits that the Ethereum 2.0 effort is trying to bring. So, the first one is that Proof-of-Stake brings more efficient consensus. So instead of consensus requiring these are miner’s computers that need to be running 24/7 and constantly burning a huge amount of electricity. Proof-of-Stake is much more energy-efficient, and there is much less waste. It requires much fewer resources to provide the same level of security, faster consensus, so less time is needed to confirm transactions. So, in Eth2, you get a very strong finality guarantee of transactions in about 12 to 18 minutes. But even after about 12 seconds, you actually get a fairly strong guarantee just from initial confirmation. So, this is all much higher levels of security that Proof-of-Work chains which in Ethereum’s case take about 12 seconds to give a single confirmation. And for a very high level of safety, you might need to wait much longer and much higher scalability. So, one of the important technologies in the Eth2 is called sharding, and sharding can decrease transaction fees by a lot, increase scalability by a lot, potentially allow us to process up to 100,000 transactions per second. If you combine sharding together with some layer 2 rollup technology, existing Ethereum applications continue to work. So, if you have an Ethereum application, the transition to Eth2 will not break your application. It will continue to work as it is today.

So, this is the path for scalability. So, today the existing Ethereum chain — it can process about 15 to 45 transactions per second with a scaling technology called rollups, which is in some ways already running on the main network. So, there’s some rollups such as like, for example, Loopring based on Shanghai and ZK-Sync as another major team and a couple of other teams, also some optimistic rollups teams starting the launch soon. This is a scalability technology that can increase scalability to about 1000 to 4000 transactions per second. And currently, it’s all basically ready for simple payments, but more complicated. If your applications on smart contracts still require a little bit more time. And finally, if you combine rollups together with sharding. So, rollups are either already here or coming very soon. Sharding will take some more time on combining those two together. You can get up to 25000 to 100000 transactions per second. So, as an enterprise user, this gives you a much higher scale, level of scalability. And this is a strong guarantee that if you start building an application now, there will actually be space for that application to continue to function, even if it gets to millions of users or tens of millions of users. Or potentially in the longer term, even hundreds of millions of users, like these numbers are just today’s technology. As computers continue to become more powerful, as Ethereum becomes more efficient, I expect even this number to increase over time.

So, for a long time, I think the enterprise will use private chains, and one of the reasons why enterprises use private chains is because public chains had very bad scalability. But with Eth2 public chains are going to have very good scalability. So, looking at Eth2 as a place to run applications is going to become more and more relevant over time. So, any kind of integration work that BSN or anyone else can do to help make that happen, and will be very appreciated. So, scalability is gonna be very important.

Additionally, privacy. Privacy is a big concern for many Enterprise applications. And for that, there’s a lot of work being done in cryptography, a lot of work being done. For example, with zero-knowledge proofs, ZKSnarks and there’s a project called Aztec, there are many projects. There’s one from Ernst & Young that was announced I think, last year. So, a lot of work being done on privacy-preserving applications that benefit from the security that a blockchain provides without sacrificing the confidentiality of private data. So, this is the roadmap from here.

So, the beacon chain. This Eth 2.0 Proof-of-Stake chain is launching next week, and this is what is expected to happen from that point. So, light client support is likely the first major upgrade to the beacon chain, maybe early mid next year. We don’t know yet. It’s a fairly simple upgrade. So, it’s likely to happen fairly soon. In parallel, more improvements to the existing Ethereum blockchain, stateless client support, cryptographic operations, more efficient data structures, binary trees, many things are happening that improve the existing Ethereum experience, improvements to client’s turbo gas sink protocols, many things happening here. Then work on sharding scalability and also in parallel work on combining together Eth2, and the existing Ethereum chain so that the existing Ethereum chain and the new Proof-of-Stake chain I combined together into one system, and of running on a Proof-of-Stake together.

So as a whole these are upgrades that will make the Ethereum chain much more efficient, and they will enable applications with much higher levels of scalability and much lower costs. And so, if you are building an application that it expects to eventually have many millions of users on the existing Eth1 chain, there may not be enough space for you. But on the Eth2 chain, there definitely will be enough space for you. And so, you can start building and then be confident that there will be a way for you to scale and take full advantage of the Ethereum 2.0 chains capabilities. Proof-of-Stake will also provide a more stable and more efficient consensus layer that gives stronger guarantees about the safety of transactions and of many other improvements are happening at the same time. So, if you are building applications encourage you to learn about all of these upgrades, and also learn about rollups and some of the layer 2 scaling technology that is being worked on in the Ethereum ecosystem at the same time, and see how this technology can fit into your application. Or if you are an enthusiast, then you are welcome to stake, you’re welcome to participate in the beacon chain as a validator, and just keep watching, keep participating.

And hope we can all enjoy the Ethereum ecosystem continue to very quickly improve over the next two to three years. Thank you!

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