Vitalik Buterin meets Russian blockchain community

Vitalik Buterin

On April 11, Vitalik Buterin of Digital October met in Moscow with the representatives of the Russian blockchain community. Instead of sticking to a tedious lecture format the organizers decided to do a Q&A session. Vitalik was very generous in sharing his thoughts and ideas. Our representative listened to this conversation and was very excited to share his impressions in this post, which focuses on the business aspects on blockchain.

In response to the question about the critical issues currently affecting cryptocurrencies, Vitalik stated that the lack of stability in the cryptocurrency exchange rates is a major concern. Some in the industry are experimenting with introducing cryptocurrencies whose exchange rate is firmly tied to fiat currency rates, such as USD.

When asked about the recent wave of ICOs, he asserted that ICOs will continue to evolve as they provide many advantages, especially to open source projects which have hard time monetizing themselves. He also urged the market participants to think outside the box rather than just copy some “magic formula,” which will prove to be less and less effective over time. Flexibility is what’s needed. It is necessary to closely examine the problems with completed ICOs — maybe Ethereum should be used less rigidly, or ICOs should offer the option of controlling the money? Or maybe the ICO could be conducted with the reward payments conditional upon the project’s progress? May be experiments with valuation and caps, such as lowering the token price, are in order?

Vitalik was asked about his take on the ICOs of offline businesses which are unable to demonstrate how they spend the proceeds. His response was a very cautious one. He stated that he would not give them his own money but advised that there will be more and more of such projects as blockchain crowdselling will continue to push forward.

The event participants wanted to hear some examples of blockchain’s real-life applications. One of the examples he gave was decentralized identification, when information about a person does not belong to just one entity. He continued this idea, taking it to the next step: decentralized reputation. To give an example: a cab driver worked for Uber and earned his reputation, and then Uber banned him. When he goes to work for Lyft he will have to earn his reputation from scratch. Blockchain could solve that.

A few more examples were offered, such as cross-blockchain systems — the idea on which several market players are working on. It is important to “marry” several blockchains, for instance, Bitcoin и Ethereum. This would be relevant to banks, exchanges, etc. A couple of further examples were private insurer’s club (with insurance issued by a group of people rather than an insurance company), and ICOs of charitable projects.

On the issue of the future evolution of Ethereum as a protocol Vitalik shared that some parties are working on upping the transaction speed, ideally catching up to the speed of Visa and Mastercard, and said that he expects to hear some news later this year and the next. The market is also transitioning to the Proof of Work and Proof of Stake hybrid, which will cause miners to earn somewhat less.

Buterin’s opinion about various governments’ experiments with blockchain was one of keen interest and support, and he cited the work of the Bank of England as well as Masterchain by the Central Bank of Russia. Estonia is quite advanced along the path of blockchain introduction. But he cautioned the attendees not to expect speedy progress — governments move very slowly and are unlikely to propel the industry forward.

You can watch the event here (sorry, only available in Russian):