How Right or Wrong Was He?

Ethereum (ETH) co-founder Vitalik Buterin has summarized his crypto-related predictions over the last decade, revisiting his past stances towards various subjects and making a verdict on whether he now thinks he was right or wrong. 

Bitcoin and adoption

He started with bringing up a piece, titled “How Bitcoin can actually help Iranians and Argentinians,” which he had written for Bitcoin Magazine in 2013. In the article, he had argued that Bitcoin (BTC)’s major benefit is its censorship resistance and the fact that it is international, not its 21 million cap. 

“Last week, I actually went to Argentina! My verdict: generally correct. Cryptocurrency adoption is high but stablecoin adoption is really high too; lots of businesses operate in USDT,” Buterin said, claiming that he was partly right about his prediction, while noting that stablecoin adoption and usage has outpaced that of Bitcoin. 

PoS

Continuing his journey through the past, Buterin shared a draft of his predictions for when the Ethereum network would migrate to Proof-of-Stake (PoS), a more scalable system compared to Proof-of-Work (PoW).

Spoilers: the exact date of the Merge, when the current Ethereum mainnet “merges” with the beacon chain PoS system, is still largely unclear. As reported, it is predicted to happen in the second quarter of 2022, but there is no guarantee. 

“I deeply underestimated the complexity of software development, Buterin now says, adding that “2014-era ideas were waaay too complex.”

In another tweet, he insisted he still believes that “the internet of money should not cost more than 5 cents per transaction.” Paradoxically, the average transaction fee on the Ethereum network is currently over USD 33. In fact, to tackle this issue, Buterin recently proposed a new Ethereum Improvement Proposal (EIP).

Nevertheless, the Ethereum co-founder reiterated his conviction, stating: “That was the goal in 2017, and it’s still the goal now,” adding that it is “precisely why we’re spending so much time working on scalability.”

Buterin also shared what he called an “intellectual evolution” – his journey from a PoW apologist to a PoS enthusiast. In a 2012 piece, he likened Bitcoin mining to gold mining, thus justifying the network’s excessive use of energy. For context, each Bitcoin transaction consumes 1,173 kilowatt-hours of electricity, which could power a US household for six weeks, a report by MoneySuperMarket claims. 

Fast-forward to 2017, when Bitcoin hard-forked and resulted in the creation of Bitcoin Cash (BCH). “I consider BCH a legitimate contender for the bitcoin name. I consider bitcoin’s *failure* to raise block sizes to keep fees reasonable to be a large (non-consensual) change to the “original plan”, morally tantamount to a hard fork,” Buterin had said back then when commenting on the hard-fork.

However, he has now changed his mind about BCH, and even called it “a failure.” He blamed BCH’s community for the failure, saying that they were not united around “a coherent way forward.” 

DeFi and NFT

On another note, Buterin praised himself for rightly predicting what turned out to be decentralized finance (DeFi). He specifically named some applications, including ERC-20 tokens, algorithmic stablecoins, domain name systems (like ENS), and decentralized autonomous organizations (DAOs), which were envisioned in the Ethereum whitepaper. 

“A lot correct (basically predicted “defi”), though incentivized file storage + compute hasn’t taken off that much (yet?), and of course I completely missed NFTs,” he said, noting that he did not expect non-fungible tokens (NFTs) to become an integral part of the DeFi ecosystem. 

Politics and technology

While concluding, Buterin admitted that he was naive when thinking about politics. “Too focused on simple and complete formal models; I did not appreciate challenges of culture and [legitimacy],” he said, adding that he has now progressed— at least to some degree. 

In terms of technological innovations, on the other hand, Buterin claimed he has been right for the most part. 

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