Editor | Wu Talks about Blockchain
This podcast is the second part of a conversation between Colin Wu, founder of WuSay, and Vitalik Buterin, co-founder of Ethereum. The main topics discussed are: How can Memecoin develop in a more meaningful way? What should we do if cryptocurrencies and blockchains are exploited by malicious actors from the Pumpfun live broadcast controversy? Responses to community questions about the Ethereum Foundation selling coins and Vitalik's personal influence being exploited.
Part 1 Wu talks with Vitalik (I): Recalling the story of Ethereum in China, how the Russo-Ukrainian war changed me, and reflections on the BCH big block
It should be noted that Vitalik was interviewed in Chinese, which is not his native language. Some expressions may not be very accurate. Please understand and tolerate. The audio recording is generated by GPT, so there may be some errors. Please listen to the full podcast
Microcosm:
https://www.xiaoyuzhoufm.com/episodes/674dc54c0ed328720a046e50
YouTube：
https://youtu.be/UkQQK60uGMU
How can Memecoin make sense? Why is there so little progress?
Colin: Let's change to a lighter topic. Memecoin has been very popular recently. You have previously asked whether Memecoin can be combined with some public utilities or charitable activities, but it seems that we have not seen many good cases so far. Many of them seem to be for hype or making money. Do you have any suggestions or ideas in this regard?
Vitalik: One reason why Memecoin is so popular is that everyone is thinking about what the next application scenario of blockchain will be. In 2017, ICO brought a lot of new currency projects, and in 2020 and 2021, there was a craze for NFT. Now, there seems to be no new applications in 2024. It can be said that there are two types of blockchain applications now: the first is idealistic, doing some good things, but often without profitability; the second is highly profitable, but without any practical significance.
I have always hoped that there would be some applications that have both. In fact, this topic is very important, because I am personally idealistic, but I also know that decentralized applications have had problems for a long time.
I remember when I was in high school, there was a decentralized Facebook project that received $200,000 in funding, but ultimately failed. What did this failure teach us? If you can't make a profit, you can't hire a better technical team, and you can't compete with centralized projects. The reason why blockchain is interesting is that it provides decentralized developers with opportunities to make money.
There may be opportunities to do some decentralized development projects that are profitable and have strong technical teams. However, so far, most blockchain applications, especially non-financial applications, do not seem to have found such success stories.
For example, projects like DDocs (a decentralized Google Docs) and Farcaster are not making a lot of money at the moment. The one that seems to be making the most money is Memecoin. So, I was thinking: if people are just doing it for gambling and entertainment, can they do something more meaningful in the process? Intrinsically, this kind of thing is not necessarily bad, but it is dangerous for some people, and for most people, it is fine if it is fun. But if the only large-scale application in blockchain is this hype Memecoin, then what is the point of me, as a core developer and researcher, participating in it? Why don't I do something related to AI or bioscience?
So I started thinking, could I combine the concept of Memecoin with something more meaningful? In March of this year, I wrote an article about how to make Memecoin more meaningful, proposing three ideas:
First, can Memecoin be donated to charitable organizations?
Even if most users may lose money, can low-income users also make some money by participating? I remember that in 2021, Axie Infinity was very popular in countries such as Vietnam and the Philippines, because in these countries, many people earned income from the game through "Play to Earn" and felt that they were having a very happy time.
So secondly, is it intentional to allow people in low-income countries to earn money by participating in Memecoin? Is it valuable for them?
Third, I think gambling is not a meaningful goal, we should do something more fun, at least make some more interesting games.
So, I came up with these three methods. However, so far, not a lot of progress seems to have happened. The most that can happen is that some Memecoin will donate some money to me, and I will donate the money to bioscience or other worthy causes. If they give me money, I think it is fair because it means that they trust me to do something good in accordance with the public values.
Why haven’t most teams done something more meaningful yet? I think it’s because there are two separate groups: the first group that knows how to do Memecoin, and the second group that focuses on idealism and philanthropy.
This is like the small vs. big block debate I mentioned earlier: one team can do something that finds users but has little meaning for humanity, while the other team can do something meaningful but not profitable. Ideally, the two parts can be combined to find a large number of users and these applications are beneficial to humanity. I think this is a problem we have not yet solved, but it is very important to solve.
PumpFun live broadcast controversy: What should we do if blockchain is exploited by bad guys?
Colin: The following questions may be of concern to the Chinese community. These may be the last few questions, because the time is quite long and you may be a little tired. The first question is that the vulgar live broadcast on PumpFun recently may have attracted attention. I don't know if you have paid attention to it. Many people ask questions. They will ask, as a decentralized, censorship-resistant blockchain and network, how to deal with those who do bad things? For example, someone uses cryptocurrency to launder money, blackmail, or like the recent live broadcast on PumpFun. How do you think we should deal with this situation? How to balance the contradiction between decentralization and malicious behavior?
Vitalik: This is a very important question. I think there are different solutions in each field. First, we can discuss this issue from the perspective of decentralized social media. I think that the most important function of social media now is not simply to provide a platform for publishing content. In fact, the most important service is "sorting". Many platforms need to decide which content should be shown to you first.
Now we can post anything on the blockchain. On the Ethereum chain, you can post a transaction, write what you want to say, post pictures, videos, etc. There is nothing wrong with these things in themselves. The problem is that if the platform's sorting algorithm tends to push some bad content to the front and good content to the back, then the platform may become a problem. The goal of many centralized platforms is to increase "interaction" and let users spend more time on the platform rather than providing high-quality information. This leads to videos like PumpFun that may be ranked at the front, although most people don't like or want to watch them, but because there are many people interacting, this kind of content will be pushed to the front.
Therefore, the problem with many platforms is that their algorithms cause false and harmful content to be displayed, while high-quality information that users really need is ignored.
Of course, centralized platforms can solve these problems in some ways, but using a centralized approach to solve these problems also has its own flaws. If a platform intervenes with its own team's views, people who do not believe in these views will think that the platform is untrustworthy.
We have seen this in the United States, where many social platforms closed the accounts of Trump and others in 2020, causing many people to lose trust in American social platforms. So I think the ideal way is to develop a more decentralized and open algorithm that is more inclined to the quality of content rather than the sheer number of interactions.
I've been talking about "Community Notes" a lot lately. If you use Twitter, you should know that if a tweet has a lot of retweets and replies, but its content is wrong, Twitter will mark the tweet with a "Community Note" to inform that the information is wrong and provide relevant links to learn the correct situation. The algorithm of community notes is actually a more democratic algorithm. Many participants can vote. If the majority of people think that a piece of information is wrong, it will be marked.
This algorithm works well, and most people like the results of community notes. Therefore, I have always hoped that there will be more similar decentralized algorithms, the goal of which is to allow users to see more correct and high-quality information.
But the PumpFun team obviously won’t do that, because they are purely looking for users and increasing traffic, and there is no idealism at all. So the solution to this problem will not come from them.
Regarding the privacy issue, especially in the case of Tornado Cash, I think the current state of no privacy protection on the public chain is unsustainable. The situation of no privacy will be unacceptable to many people and companies. Because if you make a transaction, others can see all your transaction history, so privacy protection is very necessary.
For the other question — — I have two opinions. First, I think it is very dangerous for the government to have too much power and information. I am from Russia, so I know very well how the Russian government treats the opposition now.
The second point is that even if the government has access to information, the information can still be stolen by hackers. For example, last year, a reporter from the US intelligence department found that many communications were hacked, including databases. Databases in almost all countries can be hacked. Therefore, although some governments think they can control this information, in the end this information can also be stolen by hackers, thus endangering the safety of ordinary people.
Therefore, I support a solution that can protect privacy while balancing transparency. Platforms like Tornado Cash can protect privacy while providing a certain degree of transparency. For example, when users deposit cryptocurrencies on the platform, they can prove that they are legitimate depositors without revealing their identities. But if the source of the deposit is black money, such as funds stolen from DeFi projects, users can also prove that they are not thieves.
I believe that only in this way can we reduce large-scale illicit financial flows while protecting the privacy of ordinary users.
For the early cypherpunks, they had a saying: "Privacy for the weak, transparency for the powerful." This means that ordinary people need privacy to protect themselves, while those who hold power, such as national leaders or senior executives of large companies, should be transparent to society because their behavior will have a significant impact on society.
Zero-knowledge proof technology (ZK) is very useful here. With ZK technology, we can find a balance between privacy and transparency. Previously, privacy-preserving projects were either completely private or completely public, while ZK technology allows us to flexibly choose what information to prove or expose. We can adjust the relationship between privacy and transparency according to our needs.
At present, there are some second-generation privacy projects under development. These projects can effectively solve problems such as DeFi hackers. I am very optimistic about these projects.
Why is the Ethereum Foundation selling coins on the chain? Will it cause panic?
Colin: I saw you responded to a question on Twitter before. Some people wondered why the Ethereum Foundation did not sell coins through OTC, but chose to sell them on the chain? They thought this approach might cause market panic. My understanding is that this is mainly for transparency, right?
Vitalik: Yes, the foundation does face some problems when doing these things. Sometimes people's expectations of the foundation are conflicting. Some people want the foundation to be transparent and disclose all operations; some people hope that the foundation will not disclose information about the sale of ether; in addition, some people hope that the foundation will have enough budget, and even hope that the foundation can pay higher salaries to core developers and avoid relying on selling coins to raise funds. These three expectations are actually difficult to meet, and they form a contradictory triangle.
In addition, many people have a misunderstanding of some of the Foundation's actions. A few days ago, an account on Lookonchain posted a message saying that the Ethereum Foundation account sold more than 5,000 ether. But in fact, this account is not an account controlled by us and has nothing to do with us. In fact, this was a long time ago when we paid a developer funds, and he transferred it to someone else's account.
The 35,000 ether we sold in August was actually done through OTC channels. We handed these ethers to the OTC services of platforms such as Kraken so that they could be sold over a longer period of time, in a more cautious way, and in a way that would not cause too much impact on the market. Therefore, we did not sell 35,000 at once, but in batches through their OTC services.
We chose this approach to maintain openness and transparency, and to let the public see that our trading methods are more secure and controllable.
Indeed, one of the problems we face is that while a lot of information is public, there is no centralized place to display it. We published a transparency report before DevCon that explains how we use our funds. The report mentions how our funds are allocated and where funds flow from some of the foundation's large accounts and other accounts. For example, we have a wallet for the Berlin office that is used to pay salaries and other expenses for some developers.
While this information is public, it is not well organized in one place, and this is something we are working to improve.
Now that we know this, we are considering how to better address this issue. While increasing transparency, we must also acknowledge that it is very difficult to fully meet everyone's needs. For example, the Foundation has a certain budget and needs to pay developers enough salaries to prevent other companies with more funds from poaching our researchers.
This is indeed a dilemma: it is almost impossible to pay developers a reasonable salary while not selling too much ether to raise funds. Therefore, the foundation faces the challenge of constantly adjusting and meeting different requirements during the improvement process.
How to avoid personal influence being abused by project owners and others
Colin: Finally, I have a question. In the Chinese community, everyone calls you "V God", which is a very special name. Although you may not like being called this, a few people may think that some people actively approach you or even try to please you, which may gain some benefits. What do you think of this phenomenon? Or, people who have a good relationship with you may gain some benefits? (Although I personally do not agree with this accusation of the community from my experience)
Vitalik: I have started to say no more recently. Most of the time, I will say no to people who want to take pictures with me. Five years ago, I started saying that I would no longer be an advisor to any token project, and this year I also made it clear that I would not invest in tokens. If I want to support a certain field, I will support it through some organizations instead of doing it myself.
For example, if I want to support a certain field, some people will help me think about what projects in this field are worth supporting, or what rules we can follow to support these projects.
I think this is a natural transition from a small ecosystem to a large ecosystem. When the Ethereum community was small and there were few teams, it was very important to directly support each team. If there is a team doing something valuable, then it should be supported.
In addition, I also need to stay in touch with the real world. I can't become a scholar in an "ivory tower" who doesn't understand what's happening in the real world. But when the community gets bigger, this becomes another problem. There are more projects, and everyone wants to discuss with me, and many people want me to invest in their projects. So, in a small community, my task is to accept, but in a large community, my task is to refuse. Therefore, in the past year or two, I have begun to refuse to directly support certain projects more often.
Sometimes, if a project is great, I might support it a little, but I won’t maintain a long-term relationship. Instead, I’ll consider whether there are more neutral ways to expand the ecosystem.
However, there is also a balance issue here. I need to participate in this world. If I don’t participate in any application, I will be further and further away from our ecosystem. Therefore, this balance needs to be adjusted. It does require some adjustments.
