Layer-2 scaling, wallet security, and privacy-preserving features, according to Ethereum co-founder Vitalik Buterin, are three crucial technical transitions that must occur practically simultaneously in order for Ethereum to succeed.
Vitalik Buterin Thinks Ethereum Will Fail If These 3 Crucial Transitions Don’t Happen
Buterin explained that the Ethereum blockchain fails outright in the absence of adequate scaling infrastructure to lower transaction costs in a post on his personal blog on June 9. Buterin even shared this blog post on his Twitter account.
Ethereum fails because each transaction costs $3.75 and every product aiming for the mass market inevitably forgets about the chain and adopts centralized workarounds for everything,
Buterin
Another Failure Point
Buterin claims that smart contract wallets are another area of failure. He explained that switching to smart contract wallets had certain drawbacks because managing numerous addresses at once presented challenges from the user experience perspective.
According to Buterin, layer-2 scalability, wallet security, and privacy features, all need to be improved in Ethereum. Buterin highlighted that in order to truly migrate towards an on-chain environment with zero-knowledge rollups, wallets would also need to safeguard data:
In a ZK world, however, this is no longer true: the wallet is not just protecting authentication credentials, it’s also holding your data.
Buterin
Privacy
For the third and final transitions, privacy, new identification, reputation, and social recovery mechanisms will be required.
Without the third, Ethereum fails because having all transactions (and POAPs, etc) available publicly for literally anyone to see is far too high a privacy sacrifice for many users, and everyone moves onto centralized solutions that at least somewhat hide your data
Buterin
The co-founder of Ethereum stated that stealth addresses might be used to overcome this problem.
About Ethereum
Building and deploying smart contracts and decentralized apps (dApps) are made possible by Ethereum, a decentralized open-source platform for blockchain developers. Smart contracts are straightforward self-executing programs that, when certain circumstances are satisfied, execute on the Ethereum blockchain and handle transactions. As a result, the transactions can be decentralized without an intermediate.
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