The Future of Ethereum | Interview with Joseph Lubin

Hi, guys.

We're here at Ethereal Summit, one of the main events kicking off Blockchain Week 2019 in New York City. Here we met with Joseph Lubin to talk about the future of Ethereum. Yesterday, Jing from Plasma Group spoke in a panel very enthusiastically, very impassioned, this.

Meme that Ethereum is failing and all these competitors are going to take over Ethereum because it doesn't scale, but it does fucking scale and it scales today. And all of this shit is working in production and all these other chains are really doing is that they're marketing harder and they're memeing harder. They raised their billions in ICO money and they're like, oh yeah, we're going to take over Ethereum with our five daily active users. No, that's such bs. And so if anyone as part of the community can really do anything to help Ethereum move along, it's meme harder. Like, tweet about it, tell your friends Ethereum does scale.

Thanks, you guys. In her closing remarks about Ethereum's ability to scale, and I just wanted you to comment on that. Can Ethereum scale? Was the question. And if so, what are the main developments right now in the ecosystem that are making that happen?

Sure. So I think the point as she punctuated that panel quite brilliantly and entertainingly, was not so much about its ability to scale, it's that it has already scaled quite significantly. So she's part of the Plasma group. It's a group that is pioneering a class of different solutions for scalability, essentially recognizing that we have this base trust layer that can handle 15 to 27 transactions per second. And above that, we have state channels of various different varieties in ZK Snarks and ZK Snarks and truebit and Plasma and Plasmas, that class of technologies that enable you to have less decentralized platforms sitting at layer 2 in the Ethereum ecosystem. And they can benefit from the full trust in some cases, sometimes they benefit from partial trust, but if they're linked in really rigorously, they can benefit from the full trust of the base trust layer. And you can get the best of both worlds. So you get high transaction throughput per second and you get the security of the base layer. And by that I mean if you have a game that you've brought a network, you brought your own network basically for your game or your Exchange or some other application, everybody using your system, if they have assets on your system, they can be confident that if you're incompetent or if you're corrupt it doesn't matter so much. It's a pain in the butt, but you can still pull your value tokens back to safety and you're not vulnerable. Okay, other than that's happening.

Yeah, exactly.

Other points. Yeah. So I think we're at like many tens of thousands of decentralized transactions per second on the Ethereum network right now. And other points that I believe she was making and that I think the meme was making, is that we've got all this scalability for specific use cases, so it's architectures of networks that are specifically tailored for the application and we can do a lot of that and we're not running out of capacity to do that. So we're not reaching any limits soon with the base trust layer at 15 to 27 transactions per second, but the base trust layer, within 18 to 24 months is going to multiply its capacity by about a thousand times.

And what is that development?

Oh, so that development is serenity, or Ethereum 2.0. And Ethereum 2.0 is divided into four phases, three major phases in computer science terms, they're numbered 0, 1 and 2. Phase 0 is getting close to. Basically it's eight different groups that are building their own clients according to a specification that's really very stable right now. There's a bunch of different test nets that each uses, and there's one test net for everybody to come together. So within a small number of months we should have a fully operational test net. And possibly by the end of this year we'll have a fully operational, real phase zero of Ethereum 2.0. So good chance it'll go live this year, and there's a decent chance that. So there'll be different ways that it gets connected with Ethereum 1.0. Ether tokens will move from Ethereum 1.0 to Ethereum 2. There may be bidirectional mechanisms and there may be a way in the not too distant future to use the beacon chain, which is basically the phase zero proof of stake to finalize transact or to finalize blocks on Ethereum 1.

Okay, so you mentioned proof of stake, and I wanted to ask about another point yesterday that was sort of contentious was that panel about proof of stake versus proof of work. And I know Ryan Selkis from Asari was sort of critiquing proof of stake.

If you have a million dollars, would you put it on Ethereum 2.0 or Bitcoin?

If you were actually balancing a portfolio, I'd say it should be 80, 20 bitcoin. If you put a gun to my head, it's 100% bitcoin because I have kids.

So could you comment on that move that's been planned in Ethereum for.

So I don't know that he was critiquing proof of stake. The question that was put to him was if you had a certain amount of money to invest in either bitcoin or Ethereum 2.0. He said that he put 80 or 100% on Bitcoin because Ethereum 2.0 isn't released yet. There are still questions and he has children.

So I don't think it's like we see something.

I don't think he was fully discounting proof of stake. I think he just knows that it has been proven that proof of work works. And so if he was faced with the conservative decision of investing his child's college fund, he would make the prudent ch, which is kind of the choice we made on the Ethereum project. At the start we intended to go proof of stake. And unlike what was said on that panel, there are proof of stake systems that are working different flavors of proof of stake systems. But we were aware of edge cases in all the systems that were working at the time that could potentially take down a network. So those systems weren't incredibly valuable. And we figured that if the Ethereum network is incredibly valuable that, well, resourced access would potentially exploit these vulnerabilities. So we knew we could make proof of work work. And the intention was to do that and do the research and get to the point where we were very confident in proof of stake and that is done and it's pretty much good to go. It's implemented and running and just need all the different clients need to be synced.

Could you summarize why that's so important to proof of stake?

Sure. Proof of work is a mechanism that keeps all the different nod of a network in sync. So it's a consensus formation mechanism. You get the trust characteristic from blockchain from having all these nodes kept in sync. So proof of work is one of a class of consensus algorithms. They all essentially find a leader and everybody follows in behind that leader. And this is a brand new one. It's a decentralized mechanism where you don't really elect a leader. The leader wins its role and wins the right to propose the next state of the system by showing everybody the next block that's valid and everybody validates that. And crypto economics causes them to all fall into sync. And proof of work unfortunately requires very expensive Custom hardware, enormous amounts of electricity, it wastes huge amounts of computation and it benefits efficiencies of scale. If you're a well resourced actor, you can have an unfair advantage over just you if you're running it on your game machine at home. Proof of stake fixes all of that proof of stake trades all that expense for a crypto economic bond. Essentially Ether that you put into a smart contract on Ethereum, it burns orders of magnitude less electricity, so you'll be able to run it on your pad or phone at some point pretty soon, or some jewelry at some point in the not too distant future. It doesn't waste a lot of computation. It has very low barriers to entry. So my sister could do it or somebody could set up a warehouse and my sister wouldn't be disadvantaged compared to that warehouse because essentially it's probabilistic in terms of how much you're called on to participate depending on how much you've invested. And so it's a more secure system and a fairer system, so it'll be more equitable. And there's because it's sort of based on probabilistically selecting validators for each new block, you can have a single validator pool for many different sharded blockchains. So right now we have a single validator pool that keeps Ethereum's blockchain secure. So all the validation power is focused on that one blockchain. If we split all that validation power into 1024 different shards, that would weaken all the different shards and people would notice that shard number 37 is really weak and these other shards would gang up and it would be madness. But from this one validator pool in Ethereum 2.0 groups are selected and randomly allocated to validate the different shards. So all the shards are secured equally and they're all secured with the full validation power of the entire network.

Okay, that explains it. I also wanted to touch on, I also wanted to touch on the debate between public and private blockchains. So yesterday, is there a debate?

Yeah, you heard a debate. Okay, I missed that one.

Not a debate. I mean the larger debate, the question.

So is that the John Wolfert, Paul Brody discussion?

Yeah, that discussion.

The two former IBMers.

Right, so IBM and then we have ey former IBM. And the question I guess is they were pretty much convinced of using public blockchain, Ethereum's public mainnet, public blockchain for large enterprises. But that's not something that is always the case for, especially for enterprise blockchain talks. A lot about private blockchain.

We do a huge amount of work in our solutions group where we have hundreds of people around the world and we build lots of enterprise blockchains, private permission blockchains for companies and for consortia and banks and central banks. And you absolutely need to build the right architecture for each use case. And there aren't a lot of use cases on public blockchain right now that are appropriate for enterprise use cases, enterprise solutions. And so one of John Wolfert's arguments is that Ethereum will be the base trust layer, the base settlement layer, that many different side chains and other technologies will link into it. We've got a group called Aztec that built a protocol that enables obfuscation of transactions on public Ethereum. So Aztec protocol is super cool and it will be live on public Ethereum pretty soon. That's very similar to what Ernst and Young built. So Paul Brody described Nightfall, which also enables the shielding of public transactions on public blockchain.

That's the security.

Exactly. So that's essentially public Ethereum isn't fully ready for prime time for all use cases because it's not scalable enough yet and because it doesn't have sufficient privacy and confidentiality for all use cases yet. We're solving privacy and confidentiality by using private networks that can link into public Ethereum or link into each other. And we're also solving it with those two protocols that I just described. So many different classes of transaction or use case can now or soon be done on public Ethereum. And we're solving scalability via the layer 2 and moving to Ethereum 2.0.

Awesome. That's really great. I think that's all we have time for. So thank you so much. I really appreciate it. Cointelegraph like subscribe and Hodl.