Ethereum Founder Vitalik Buterin Talks Cryptocurrency Governance
Two weeks ago Ethereum launched Frontier, the first live release of the network. And Ethereum founder Vitalik Buterin joined the latest Epicenter Bitcoin podcast episode to discuss where the platform is headed next.
Two weeks ago Ethereum launched Frontier, the first live release of the network. And Ethereum founder Vitalik Buterin joined the latest Epicenter Bitcoin podcast episode to discuss where the platform is headed next. But even as the discussion revolved around the much-awaited launch, it kept bouncing back to the developer's thoughts on big picture cryptocurrency questions, including governance (how to reach decisions about protocol changes) and scalability (how the protocol can support many transactions without compromising decentralization).
The question of governance has been on people's minds given Bitcoin's technical blocksize debate. There isn't consensus about how to reach a consensus. While computer scientists Arvind Narayanan and Andrew Miller suggested a technical advisory board, the likes of Eli Dourado, Director of the Technology Policy Center at Mercatus Center, have argued that while Bitcoin could benefit from better communication across its stakeholders—like miners, exchanges, payment processors, or developers—it's a decentralized protocol that can't be “governed.” Buterin shared his thoughts on the decision-making process, and what he's learned about in the two years he's worked on Ethereum.
In regards to the blocksize debate, Buterin said:
“I think a lot of the sort of theoretical research we ended up doing on Olympic has some applicability to the Bitcoin blocksize debate. With Bitcoin, it's having many of the same concerns. If the blocksize is pushed upward, then propagation times are going to increase, and there are centralization risks.”
The same tradeoffs inherent in altering the blocksize affect Ethereum as well, although the platform works on a different parameter called the gas limit. When Frontier initially launched, the gas limit was to small to support an Ethereum transaction. But now that the “thawing process” is over, miners can vote the gas limit up over time, which means larger blocks that support larger transactions.
To discourage a gas limit that leads to high mining centralization, Buterin proposed a target uncle rate. An “uncle” is kind of like an orphan block in Bitcoin—a valid block that doesn't make it into the main chain. So if the target uncle rate were 0.4, it would mean that the network is striving for 4 % of blocks uncled on average, explained Buterin. If the network were uncling at a higher rate, like 0.6, then miners would need to push down the gas limit. The gas limit has this effect because smaller blocks propagate faster and less uncling supposedly occurs in a network where propagation times are less varied.
Later on, Buterin argued that while Bitcoin developers are arguing about whether to change the blocksize from 1MB to 8MB, the thinking behind Ethereum has been less about numbers and more about mechanisms, like the target uncle rate approach. “Choosing institutions rather than choosing results is a kind of a more robust way of doing governance,” Buterin said.
“But the meta-level concern is, in general, how do these choices get chosen?” he added.
Host Brian Fabien Crain commented, “Right. You can maybe have those discussions and say, 'We're going to talk about institutions and mechanisms,' because you have much more control over that discussion, while in Bitcoin, no one has that control.”
Buterin agreed, explaining that Ethereum benefits from development centralization in these early stages. But he doesn't expect that arrangement to last forever. “I think in the long-term something that's highly-decentralized is necessary,” he said.
In the episode, Buterin also shared his thoughts on scalability (including possible solutions), and what he would have done differently if he could wind back time to Ethereum's early days.
About Epicenter Bitcoin
Epicenter Bitcoin is a podcast about the technologies, projects & startups driving decentralization and the global cryptocurrency revolution. Every week hosts Brian Fabian Crain and Sebastien Couture talk to some of the most influential people in the cryptocurrency space about their projects and get their perspectives on recent events. Their guests, who range from entrepreneurs to academics, to industry experts, join the conversation from different locations around the globe, which gives EB a truly international scope.