The creator of ether doesn't worry about the current crash, but he doesn't like how speculative his creation has become.
His father, a Russian-born engineer andentrepreneur who moved his family to Canada, was the one who learned about the digital currency.
One of the most prominent father-son duos in DeFi, Vitalik and Dmitry, told Fortune they are used to the volatility by now, but this Father's Day they want to think of how other cryptocurrencies could be used.
Vitalik told Fortune that there will be ups and downs in the future. The most meaningful projects get nurtured and built during the down periods.
Vitalik says money was never his focus or motivator. He sees more for the network than for speculative use of the technology.
Vitalik and Dima want to see more applications outside of finance, while continuing to improve the technology of the platform. The actions they have taken back this up. Vitalik and Dima supported the Ukraine DAO, which raised millions of dollars to support Ukrainians in the midst of the war. Both donations are on the multisig wallet.
Vitalik sometimes publishes his ideas for the future of the space on his website, such as the idea of soulbound token, where a record of an individual's credentials could be documented on-chain. He has written about themerge upgrade where the network will shift from a proof of work mechanism to proof of stake and decrease its environmental impact.
Vitalik and Dima spoke with Fortune about their journey in the space, regrets, hopes and likes for the future of the industry, and more. Vitalik and Dima shared more comments about the state of the market on June 15, just before the severe sell-off of thecryptocurrencies.
When did you notice Vitalik was interested in numbers?
His age was three years old. Vitalik was taught math, letters, numbers, and other things by his grandfather.
Are you familiar with Lego constructionblocks? A lot of people build things. Vitalik liked to build numbers out of them. It was interesting to see that. My access to toys was limited when I was a child. I was fond of buying Vitalik cool toys when he was young. It was fascinating to see how he was using Legos in a different way than I would have if I had Legos.
Vitalik's father bought him books to learn about programming after he arrived in Canada. I remember starting to make games for myself to play and it was very enjoyable.
What was the first thing you wanted to do when you heard about Bitcoins?
One of the most fertile areas of human knowledge to explore is in the area of computers and technology. I'd been listening to it. He was a very curious soul and he was touching on a lot of different topics. It seemed like it made a lot of sense when I heard about it on his show. He was great at explaining things.
I was happy that Vitalik was interested in a lot of things. It was always fun for me to say that I found something interesting. Check it out Vitalik. It might be interesting to you.
What did you think when Vitalik started working on the project?
Vitalik shared his white paper with me when we were at the house and it was very well written. When I read the white paper, it made a lot of sense to me, even though I wasn't following that closely. This is one of Vitalik's skills. He can explain things in a way that is easy to comprehend.
Vitalik showed the white paper to his father after he came back to Toronto. He liked it very much.
Was it surprising when people began to use it? Is it possible that you ever anticipated what it would become?
Vitalik said no. I thought that this would be a small project that we would work on and get done within a few months, and then I would return to school. I realized that I had to give up on the plan after seeing that the project would take so long.
I initially thought it would be small. I thought it might be interesting. I did not expect the size of the space to grow as quickly as it did in the last two years. I was surprised by that part of the growth.
What do you think about the market right now? What are your thoughts on what's to come?
It has had ups and downs before and will have ups and downs again. The down periods are challenging and often the periods where the most meaningful projects are built. Over the next decade, I'm confident that the ether will become a more mature and successful platform that is ready to fulfill the hopes and dreams of millions of people.
The life is always changing. The markets are not always up and down. There is a tendency for cryptocurrencies to go down in value. It's been up and down for over a decade, and I've been following it. It will be down again.
It has the same long-term potential that I have always had. It is entering the era of mass adoption.
It isn't always a straight line. It isn't as smooth as it could be. There's lots of fear right now. There is a lot of doubts. There is a war in the country. There are other things happening. There's more than one thing about the Federal Reserve. Humans are able to bounce back from adversity. We will get through this. Some more stuff will be built by us. The coin will be merged into a proof of stake. This is very interesting. In regards to outlook, nothing has changed for me. There is a bit of short term fear and speculators will be washed out, and there will be some suffering, but life will go on.
Since the collapse of Terra, people are concerned about the risk of a domino effect. The domino effect has had an impact. There isn't enough spoken about that is important.
The Luna collapse is a good example of how important it is to remind people that things are not always rosy. It's not possible to build a system and pretend that the negative case won't happen. You have to worry about the fat tails as well as the interest rates in the short term. I think that's going to lead to a more stable environment in the long run.
It's one of the silver linings of this situation, where you can see how different people respond and you get a better view of what their character is.
A lot of people lost a lot of money.
My hope is that we will not be restricted. Let's not let it happen. Let's stop this! Lessons can be learned from all of that. The lessons can help us move forward, rather than keeping us safe.
What do you think are the positives of the coin? What are the things you enjoy doing the most?
When Russia invaded Ukranian, I was impressed by how well Ukrainians and the community supported the country. It was cool to see that they were able to funnel funds to a specific city because there was already a local currency for people to use.
The ability for humans anywhere on Earth to get plugged into their world economy is something that I'm very passionate about. That is a big deal for me. Some of the key technologies that people can use to make money, get involved in a company, and do stuff like that, are cryptocurrencies. I was raised in the Soviet Union and it was very isolated from the rest of the world.
I think there's still a lot to be figured out about how the new organizational structures work. This is the future of how people will organize.
Vitalik feels the same.
At the end of last year, I went to Argentina and noticed that there was a different attitude tocryptocurrencies there. Sometimes it's viewed as a kind of gambling for rich people in the west. It's a lifesaver in places like Argentina where a lot of people live. Sometimes people there use cryptocurrencies to buy and sell things. There's a project that is trying to set up a UBI with the use of digital currency. There are projects that are trying to use different technologies.
There is a lot of this kind of energy in a lot of places. NFTs are examples of that.
Do you like the get-rich- quick schemes? I know you can't control how humans use ether, but do you ever feel bad about the way it's used? What do you think about the not so good use cases?
Vitalik thinks a lot of financial speculation is boring. Sometimes it gets tied together with things that are good, like with NFTs, for example, and there are a lot of these artists in far corners around the world that are getting this chance to participate in a global economy.
It's an open system, so you don't have control over who can use it. We should do things that you can do. There is a point where you have to trust people if you want to believe in freedom.
Humans are looking for love and acceptance from other people. I have this Lambo. I have a Boris ape. I have a lot of cash. It's about trying to hope. "Oh, I suck, but if I show the world that I have all these cool things, maybe people will love me and get human connection."
Vitalik, you recently asked your followers to tell you what they don't agree with. What made that happen?
Vitalik wanted to know. I wanted to understand where different groups of peoples' opinions are different from mine and give a safe space to the people who are my fans. It was fascinating. Some of the answers were intriguing.
What's the biggest thing to come out of it?
Vitalik doesn't think there was a big change. There were a lot of things to eat.
There were disagreements on life extension People were upset with my fashion style.
Some people said that I shouldn't participate in politics or that I shouldn't participate in politics at all. Some people say that you should not strive for neutrality and that you should be more open about your political beliefs.
Everyone can't be satisfied.
Would you ever make a donation to a political party?
Vitalik thinks that the challenge in donating to political parties is that they are very chaotic. It's easy to have an effect that isn't what you wanted it to be. I have no idea how the machine of U.S. politics works inside.
I think I will focus on other paths for the time being, which I think has been going well so far.
Many people disagreed with your post on soulbound token. What are your thoughts on the response?
Vitalik said there was a lot of good discussion and a lot of people who didn't know what they were talking about. That's okay. It happens no matter what you say about it.
People tend to frame debates as being between two solutions, where you either talk about all the benefits and costs of one solution versus the other, or you don't. I prefer a different style of debate. Let's break it down issue by issue, that's my preferred style of debate.
There's always more than one option. Even though soulbound token isn't a thing, people imagined it into existence. A bunch of ideas in a PDF document.
It's good to do things on-chain sometimes. Things can be done off-chain. We should make the best possible solution by figuring out which one is which.
The area of reputation systems that is not yet well explored is one that I believe will see a lot of activity in the future. Vitalik has described a collection of thoughts and ideas in the form of soulbound token. "Oh, here's the approach" is not what it is. It's too soon to discuss the specific approaches. It's interesting for me. Let's continue to explore this.
The highly anticipated merger is shifting gears. Proof of stake is a better mechanism.
Vitalik thinks that changing to proof of stake has benefits.
I think it's a good idea to lower the amount of resources used in the ethereum platform. Proof of stake can make the system safer. It increases the cost of attacking. It makes it easier to recover from an attack. It is more resistant to censorship than just computers that are running validator nodes. It has a lot of advantages.
I think the plan was to switch it to proof of stake by the end of the year. Since the beginning of the year, it's been described as a possibility, if we discovered an algorithm that's good for us. At the end of the year, we had enough confidence in the information to begin developing.
The safety of the network is obviously affected by the huge reduction in energy use. I'm pretty sure that this is a good thing, based on all of the research I've seen. It's important for the network.
I am excited to see this come to fruition because I have seen how much effort has been put into this.
It is not like "We have arrived". This is the best technology. Who knows whenproof of stake will be superseded. This is something that is going to happen.
Do you have any doubts about the Lido Finance merger? Do you think that's one of the top things to think about after the merger?
Vitalik said yes. I'm concerned. One of the bigger issues we're thinking about is how to change proof of stake in the long term. It's important that the issue isn't overblown, because a lot of people do that.
For instance, even with Lido. Lido has a lot of staked Ether. If you have more than one, you cannot change the chain. Some things can be done. It is inconvenient to stop finality for a day or two, but it is not that bad. That is a thing.
Lido isn't an actor. There's a lot of decentralization between the delegates that are running the validators that are inside of Lido. If you put a team of heavily armed men in ski masks into a building and take out some people, you can take out Lido. We don't know where some of the 21 locations are. There is a huge difference between Lido and centralized platforms.
The proof of stake system is still a healthy one, even though things are not as easy as they used to be. Even a higher level of decentralization is something that we are actively trying to shoot for, and we set very high standards for ourselves.
Do you believe the good outweighs the bad in the space?
Vitalik says it does.
The most common applications are far from the loudest one. People are trading monkeys for money. Things get hacked for 20 million dollars a year. It's all real. But the more common stuff that I think is done by random people around the world is not that, and not even the positive applications that are used to protect themselves. The people who do them quietly are also very real.
It's very difficult to evaluate something as good or bad. There are a lot of different things in the cript space. Everything and anything has consequences. There is a lot of this awesome stuff. This is the way of the world.
How do you think the space will evolve for the better?
Vitalik thinks that one of the important things is continuing to improve the technology of ether.
Changing to proof of stake, making it a more energy efficient and secure system, and adding some scaling improvements, like sharding and roll ups, which are going to make a serious dent in the transaction fees that people have to pay, are just some of the things that should be done I'm hoping that we can get back some of the positive experimental energy that we had in the past.
I am excited to see all of the different types of applications that we are seeing, especially things outside of finance. DAOs can be an improvement to how many people can work together. It takes a lot of trial and error to figure out what kinds of DAO mechanisms actually work. There is a lot of progress being made. I believe we're going to see more amazing experiments in the future.
I think there's a lot of amazing things happening in the ether, including applications built on top of the proof of attendance protocol or Proof of humanity.
Do you have any advice for fathers this Father's Day?
Being a parent is a big challenge for humans. I have two girls. Supporting another human growing888-607-ly888-607-ly is a wonderful and challenging aspect of being human. There is a lot of growth and a lot of difficulty in that. I would like to wish all of the parents a happy Father's Day.
You will mess up if you do anything. The future holds so much promise that we are trying to create the best future for children. It's not about our idea of the future, it's about how we can be more present with our kids and support them as much as possible. I wanted to celebrate the idea of being a parent.
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