Vitalik Buterin joined the Research Institute for Art and Technology, Vienna on Tuesday for a discussion on the future of the network. Sometime in the coming months Ethereum will hard fork, leaving behind the former blockchain so that it does not become overloaded. In order to incentivise minors to switch to the new blockchain, Ethereum will increase the mining difficulty to so the former blockchain will ‘freeze’; known as the Ethereum Ice Age. This impending ’time-bomb’ puts pressure on the developers to synchronize the hard-fork with the implementation of new services, currently in development.
Research includes new services such as proof-of-stake, an ecological alternative to the proof-of-work that both Ethereum and Bitcoin currently employ. Ethereum is also collaborating with Z-Cash in an attempt to privatise the Ethereum network, stating that the main obstacle to global blockchain adoption is the transparency it facilitates. Structurally, the transparency of the blockchain is a security feature that protects against fraudulent transactions. To resolve the tension between privacy and security Buterin and his team are focusing on a complex cryptographic procedure known as Zero Knowledge Succinct Non-interactive Arguments of Knowledge (zk-SNARK). Nicknamed ‘moon math’ for its esoteric density, Ethereum has been criticised for not adopting a previously existing privacy model as employed by currencies such as Monero. As the Ice Age looms, research into zk-SNARK feels like a detour. The break down between the two privacy systems has been analysed succinctly by the Monero community here:
Buterin has published lengthly discussions on zk-SNARK, combating complaints about esotericism by offering the research openly. He also discusses a core interest of his- incentivizing currency holders towards decisions which are beneficial to the network; a project which on Tuesday he referred to as ‘abstract crypto economics’. In a recent article he makes the following statement:
“Cryptography is truly special in the 21st century because cryptography is one of the very few fields where adversarial conflict continues to heavily favor the defender. Castles are far easier to destroy than build, islands are defendable but can still be attacked, but an average person’s ECC keys are secure enough to resist even state-level actors. Cypherpunk philosophy is fundamentally about leveraging this precious asymmetry to create a world that better preserves the autonomy of the individual, and cryptoeconomics is to some extent an extension of that, except this time protecting the safety and liveness of complex systems of coordination and collaboration, rather than simply the integrity and confidentiality of private messages. Systems that consider themselves ideological heirs to the cypherpunk spirit should maintain this basic property, and be much more expensive to destroy or disrupt than they are to use and maintain.”
Given Ethereum’s turbulent history (from the DAO drama, the Ethereum Classic fork, and endless network attacks) Buterin’s emphasis on engineered security is easy to understand, and his ongoing enthusiasm towards developing network defences and an ecological alternative to proof-of-work is admirable. However, it is possible that the detour with Z-Cash as well as the impending Ice Age will threaten investors away from the currency.