Editor | Wu talks about blockchain
This podcast is the first part of a conversation between Colin Wu, founder of WuShuo, and Vitalik Buterin, co-founder of Ethereum. The main topics discussed are: recalling the story of how Ethereum became connected with China, he emphasized Wanxiang’s “life-saving” support and his memory of Bihu; discussing the reasons why the BCH big block did not succeed; the differences between Ethereum and Bitcoin culture; why the concept of Ethereum as a world computer is recognized; why blockchain is the only one that is trustworthy; and how the Russo-Ukrainian war brought about huge changes to Vitalik himself.
It should be noted that Vitalik was interviewed in Chinese, which is not his native language. Some expressions may not be entirely accurate; please understand and be tolerant. The audio record was generated by GPT, so there may be some errors. Please listen to the complete podcast.
Xiao Universe:
https://www.xiaoyuzhoufm.com/episodes/674dc2b3c3b2a2f3342ba349
YouTube:
https://youtu.be/zijS0z6FqV8
Remembering China: Wanxiang may have saved Ethereum, deeply impressed by CoinHoo.
Colin: The first question is about your experience coming to China. In 2014-2015, can you recall that experience? At that time, you interacted with many people in the Chinese cryptocurrency community, such as Wanxiang and Shen Bo, who are still among the most supportive teams for Ethereum in China. I've heard that many people rejected you back then, including some who are now very famous. Can you share your experiences from that time?
Vitalik: My first trip to China was in 2014. I stayed for three weeks and visited Beijing, Shanghai, Hangzhou, and Shenzhen. I met many Chinese teams, numerous exchanges, many miners, and some projects. I remember visiting Huobi and OKCOIN, and I saw that these companies were already very large, with more employees than exchanges like Coinbase and Kraken.
I discovered that China had a very developed ecosystem with many large companies, while no one was doing these things abroad. I also found that at that time, there were already many miners in China. In 2014, there weren’t many applications, but by 2015, I had a lot of contact with teams like Wanxiang and Shen Bo. I stayed in Shanghai for almost two months, and they were working on some very interesting applications.
One company was digitizing part of its assets, putting part of the assets into a coin, where each coin might represent 1/1000 or 1/10000 of that asset. This way, different people could participate in investing in some very expensive assets.
In 2017, there were some very large projects in China; I remember CoinHoo was one of them. At that time, they had already come up with very interesting plans to support creators with digital currency, bringing revenue to content creators. What impressed me was that they were not just doing a demo but were creating a practical application that everyone could use, and they already had many users.
In 2014, I saw miners, and by 2015, I saw more practical applications. I felt there were many particularly interesting people in this community, while there was relatively little attention to this community abroad. So, I think 2015 was a particularly important period for the Ethereum community.
After the launch of the Ethereum main chain in 2015, the foundation had almost no funds. Our cash was nearly exhausted, and we were running out of Bitcoin, so we needed to sell Ether to support developers. Wanxiang purchased 410,000 Ether at a price of $1.20, spending a total of $500,000 to support our foundation. This was very important for the foundation, possibly saving its life, and it was also a very good investment for Wanxiang.
Colin: Yes, CoinHoo was indeed an important supporter of Ethereum, and its founder was very influential in China at that time. Unfortunately, CoinHoo later shut down. However, in the past two years, decentralized social media has started to become more popular.
Vitalik: There are some regulatory situations in China, but I found that there are similar issues abroad. Many interesting projects started in 2015 and 2016, but by 2020, their development was still constrained. A large part of the reason is the issue of transaction fees. If these projects want to truly develop and become mainstream applications, they must achieve the required TPS. A successful application may need 100 to 1,000 TPS, but our chain could only support 4 to 5 TPS at that time.
Many applications are competing to put their transactions on the chain, so transaction fees have become very expensive. In this case, it seems that only DeFi can survive.
You can imagine, if you are an ordinary social media user and discover a novel social media application, but you have to pay $1, $5, or sometimes even $15 for every post or action you take, then that is completely unfeasible. But for financial applications, this does not pose a problem. So I think it’s a pity that many decentralized social and other projects did not survive during the DeFi Summer.
But now we have many L2 solutions, and their transaction fees have decreased significantly. Many people are now focusing on more topics related to L2. I am very much looking forward to decentralized social networking and many other projects being able to thrive in the future.
Colin: Maybe you can talk to the founder of CoinHoo and see if he can restart CoinHoo; now is a good time.
Vitalik: Hmm, sure.
Remembering BCH: The ideal of large blocks is correct, but the execution capability is insufficient.
Colin: The next question I want to discuss with you is that I remember you were quite supportive of large blocks in the Bitcoin block size issue. BCH was born in 2017, bringing this dispute to a peak. You recently wrote an article mentioning that you have many new thoughts on this issue and that the reasons for the failure of large blocks might be due to insufficient technical and execution capabilities, as well as the emergence of fraudsters like Craig Wright. Can you recall your interactions with Wu Jihan, Roger, and others at that time? What are your new thoughts on this matter now?
Vitalik: Regarding this issue, it's indeed interesting. Unfortunately, my Chinese wasn’t good enough back then, so I didn’t have the opportunity to delve into Wu Jihan and other supporters of large blocks. I didn’t have the chance to truly understand their personalities, why they supported large blocks, and what their vision for Bitcoin was.
Roger Ver is relatively straightforward; he is not the kind of 'scholar' who reads a lot of books or writes articles. He is a more practical person who understands that the value of Bitcoin lies in its existence as a new currency. If a currency is to be used for payments, it needs enough block space to support a large number of transactions. Therefore, his views are quite simple and direct.
Some people who lean towards 'academic types' often contemplate long-term issues and explore things that others are unwilling to think about. These capable thinkers can sometimes bring very important ideas to the world; without them, we might make bigger mistakes.
But sometimes they also get caught up in their own world, lacking adequate contact with external realities. This is similar to some people criticizing our core Ethereum developers, asking how many smart contracts they have actually participated in and how many DApps they have written. Similar situations arise in many areas, especially in blockchain and politics.
If these capable thinkers do not have enough contact with the real world, their views tend to be very 'internally consistent' but overlook some things that are crucial for people.
In the debates about small and large blocks from 2015 to 2016, the Chinese community sometimes mentioned these issues. Large block supporters often emphasized that they cared more about users and focused on the real world, while small block supporters paid more attention to technical details and were more developers and researchers. This led to conflicts.
In the article I later wrote, I mentioned that my current conclusion is that the ideal of large blocks is correct, but the execution capability of large block supporters is indeed insufficient. Many large block supporters made many mistakes when writing code, which is also why the community eventually began to support small blocks.
But later we found that supporters of small blocks also made significant mistakes. For example, they claimed at the time that Bitcoin should be L1, serving as digital gold, while L2 could function as a payment layer. The L2 they referred to is the Lightning Network. The Lightning Network is a very interesting concept, and I personally appreciate this idea.
However, the actual implementation of the Lightning Network has many issues, is relatively unstable, and its implementation is also quite centralized. These problems are also described in Roger Ver's book.
So from an academic perspective, the idea of large blocks is very beautiful, but in the real world, there are many issues.
Supporters of small blocks did not genuinely focus on the importance of payments and applications. They believed that others were concerned about payment issues, while their task was to provide a technical solution to meet those needs. But they did not put in enough effort to think about whether this solution could truly be realized.
So now the development of the Lightning Network is relatively slow; although there has been some progress recently, most people in the Bitcoin community are still focused on the price of Bitcoin, thinking more about when Bitcoin can reach the target of $1 million. Their greatest hero is Michael Saylor, as his company has purchased a large amount of Bitcoin.
Therefore, I am not optimistic about the technological development of the Bitcoin community.
The price logic of Bitcoin and other currencies is much more complex. In fact, no one knows where the price of digital currencies comes from. This may be the biggest problem in our industry and an important issue in modern markets.
Differences in Bitcoin and Ethereum Culture: The Rich and the Developers?
Colin: Recently, you posted something quite interesting that I retweeted the other day; many people found it intriguing, which is that you generated the Bitcoin person and the Ethereum person using GPT. On the Bitcoin side, there is a rich person, particularly wealthy, and on the Ethereum side, there is a developer. It seems that for Bitcoin holders, the most important thing is to make their coins more expensive and become wealthier.
But many supporters of Ethereum seem to care less about money, making many donations, possibly more focused on hoping to build better public goods. Isn't this also a cultural difference between Bitcoin and Ethereum?
Vitalik: This is indeed an interesting topic. Actually, from 2011 to 2013, the Bitcoin community was very diverse. I remember when I entered the Bitcoin community in 2011, I found a section in the Bitcoin forum called 'Politics and Society' that I particularly liked. There were some libertarians and socialists debating each other about how to handle healthcare issues, whether the government should intervene in the healthcare industry, and other very interesting questions. Everyone had very different views on these issues.
The debates on these topics were very civil. If you know the debates on Twitter now, you would find that such civilized discussions are almost impossible. But in that forum, everyone could express their views civilly, even though my opinions might differ completely from yours. At that time, if you wanted to reply to a post, it might involve writing an article of about 300 words, where you needed to carefully articulate your views rather than just making simple comments. This culture was very special.
The early community culture of Bitcoin actually had a lot of focus on public goods, human future technologies, and ideas. However, by 2014, the Bitcoin community began to split.
Why the split? The reason is clear. Before 2014, Bitcoin had almost no competitors. If you were interested in digital currency, your only choice was Bitcoin. But by 2014, the debate between large blocks and small blocks emerged; secondly, Ethereum appeared as the first currency to compete with Bitcoin. To this day, Ethereum remains the only currency that can truly compete with Bitcoin.
So some who prefer my way of thinking and early Ethereum thinking chose Ethereum. If you prefer the Bitcoin community, you will naturally stay in the Bitcoin community.
By 2017, people had to make a choice: support small block Bitcoin or support large block Bitcoin. But in fact, as early as 2015, everyone had already made their choice. So now, we can see at least two, even three different blockchain cultures. Currently, there are many other projects, such as BNB, Solana, TRON, etc., each with its own unique characteristics and different cultures from Bitcoin and Ethereum. The situation now is somewhat like the cultural differences between different countries, similar to the huge cultural gaps that existed between countries before the internet.
I prefer the term and concept of 'world computer.'
Colin: If, as you say, the diversity of Bitcoin has decreased and people now only see it as digital gold, then how would you describe Ethereum? Would you tell everyone you hope Ethereum is a network state, or as people often say, a decentralized world computer? What kind of existence do you hope it to be?
Vitalik: I actually prefer the term and concept of 'world computer' because it represents a lot to me. I hope Ethereum is not just a chain, but also an ecosystem that can support a wide variety of applications.
This reminds me of an interesting point in the early Ethereum culture: when I started working on Ethereum, I thought Ethereum was just Bitcoin plus smart contracts. Because before that, I was part of the Bitcoin community and participated in some other projects, trying to add functionalities on the blockchain. I had an idea: why add functionalities? Why not add a programming language that allows everyone to write various functions? So when I started working on Ethereum, my original intention was Bitcoin plus smart contracts. However, our core developer, Gavin Wood, had no interest in Bitcoin before joining Ethereum. He found Bitcoin very boring. His understanding of Ethereum was actually more direct; he wanted a combination of open-source technology and shared storage. I can explain this concept in more detail.
We can look back at the history of software; initially, all our applications were open-source and free, which everyone could download, run on their computers, and view and modify the source code anytime.
However, by the 1950s, some large companies began to enter the field. Companies like Microsoft began to launch the Windows operating system and no longer released their source code, claiming their code was copyrighted and could not be copied freely. This phenomenon made many people unhappy because all software before this in computing was open for users to own and modify, just like owning a car—where you could modify any part and repair any damaged parts. When the computing field became controlled by large companies, many people could no longer freely control the applications and software they purchased, even though the software was theirs, it didn’t fully belong to them. This prompted the rise of the free software movement.
By the late 1990s, open-source software became an important topic. Today, many software applications are open-source; for example, the operating system I am using to converse with you is a completely open-source example. Now, open-source software plays an important role in our lives.
However, before the 2000s, applications were mostly standalone, where users used software individually, similar to Microsoft Word or single-player games. After 2000, many collaborative applications emerged, like Google Docs, which differs from Microsoft Word in that Google Docs allows multiple users to edit files simultaneously. Games have also changed significantly, with large-scale multiplayer online games (MMORPGs) like World of Warcraft allowing players to interact in a virtual world.
This change brought up a question: if many people use an application together, then that application needs shared storage. For instance, where is the storage location for files in a collaboratively edited document? Where is user information stored in social networks? These issues can usually only be solved through centralized servers. The biggest problem with centralized servers is that users cannot fully control their digital lives.
For instance, the file format of Microsoft Word is proprietary and difficult to edit with other software. If all important information and operations are on a centralized server, it would lead to a worse situation. A centralized company can change the rules, increase prices at any time, or even shut down services. This is like some startups relying on Facebook or Twitter's API; if any of those applications succeed, Facebook or Twitter can easily compete by modifying the API, quickly replacing other companies' businesses.
Gavin Wood thought about these issues, believing that creating a decentralized shared storage system might solve these problems and could serve as the second version of free and open-source software. He found this a fascinating topic, and I also believe this topic is significant because blockchain is not just a financial tool; it can also play a huge role in the software field. Now, applications like decentralized social networking and decentralized document editing have begun to emerge, such as DDocs (a decentralized Google Docs).
This idea is very appealing, but some people would also say, is Ethereum a digital nation? I think this concept is somewhat exaggerated because the services provided by nations are far more than what Ethereum can offer. Ethereum is merely a collection of digital programs, whereas normal countries address broader issues, including security, education, healthcare, and various public goods. If Ethereum starts to intervene in all these areas, it would no longer be neutral, which might reduce people's willingness to participate in the Ethereum ecosystem.
The only thing worth trusting is blockchain.
Colin: I want to talk to you about another politically related topic. Last year, the U.S. approved the Ethereum ETF, which was actually surprising to everyone because Trump had not yet taken office. What do you think about this issue? From your perspective, would you deliberately keep some distance from countries like China and the U.S.? Because you have also expressed that you believe blockchain and cryptocurrency are best utilized in places where centralized power is not so strong. Has the Russia-Ukraine war had a significant impact on many of your thoughts? It seems you have been very actively involved since this event occurred.
Vitalik: First of all, I believe blockchain belongs to the whole world. One of the very important advantages of blockchain is that it can solve trust issues. If you look at other industries, like AI, there are perhaps only a few centers—Silicon Valley, London, or Beijing, Hangzhou, Shenzhen in China. But blockchain is very decentralized. For example, in the U.S., some applications are concentrated in New York and Silicon Valley; there is also a significant center in Berlin; in Asia, there are many applications in places like Singapore and China. Therefore, the biggest advantage of blockchain is that it can operate in places where trust issues are particularly severe.
Argentina is a very interesting example. The biggest problem facing Argentina is inflation, with an average annual inflation rate of 30%. They have become accustomed to living in such an economic environment for a long time and have completely lost faith in fiat currency. Recently, some people in Argentina deposited dollars in local banks, and the government suddenly announced that all dollars in banks would be forcibly converted into fiat currency, and the value of those fiat currencies changed by 2 to 3 times on the same day.
This situation has caused everyone to lose complete trust in banks. Argentina also faces difficulties in connecting with the international financial system. Although the financial systems of the U.S., China, and Europe are highly developed, Argentina and many African countries have relatively few opportunities to access the global financial system. In these marginal areas, blockchain may play a significant role because it addresses trust issues. This is a trust issue, especially between countries.
Ten or fifteen years ago, the majority of people in the world were using American services. At that time, no one paid particular attention to these issues because the U.S. emphasized freedom of speech and openness, and behavior on platforms was relatively tolerant, without easily shutting down accounts.
But in the past decade, the situation has changed, especially after the Snowden incident in 2013 and the account closures for political reasons in 2020. Nowadays, there is no decentralized platform that is trusted globally; perhaps the only thing that can achieve this is blockchain. Because blockchain is the foundation of trust, it ensures that platforms do not arbitrarily shut down accounts, steal user funds, or leak personal information.
Therefore, in this ever-changing world, I feel that blockchain and related technologies have significant advantages. In recent years, I have spent a lot of time in marginal areas, such as Argentina, Thailand, Montenegro, and Turkey, because I believe blockchain should be an international thing. We should not let it become an increasingly centralized technology. So I recently had a thought: if a blockchain is theoretically decentralized and free, but if most teams are concentrated in one place and share the same values, then in the next crisis, they might make mistakes and ultimately lose global trust. So I care quite a bit about this.
The Russia-Ukraine war completely changed me; returning to Russia might lead to a prison sentence.
Vitalik: The outbreak of the Russia-Ukraine war really surprised me. A month after it happened, I saw information saying the Russian army was near Ukraine, beginning to mobilize troops and tanks. I had no idea such a big event would happen; I thought Russia was just concerned about certain issues, like NATO's expansion. They just wanted to express that they were powerful, worthy of respect, and did not want others to do things they disliked. But I didn’t expect them to completely invade a country, or if they did invade, it would happen gradually, like in 2014.
But by early February, when I communicated with some Russians, they also felt that nothing significant would happen. Until February 24, I remember I was in Denver, and that night I watched the news, and at that time, everyone basically knew that a major conflict was about to occur. When this event truly happened, my thoughts underwent a significant change, and I was completely at a loss for how to express it.
I can first explain what happened. Around 6 PM on February 23, all my activities for the day had ended, and I was sitting in my hotel room communicating with my father. We knew Russia might take some significant actions. Around 7 PM, my father sent me a message saying that Russian rockets had begun striking buildings in eastern Ukraine. At that moment, I knew that real big events were starting to happen.
Next, I didn’t sleep for three or four hours. Normally, I would return to the hotel to rest, but that night I hardly slept until midnight, constantly watching the information. Then I posted my first tweet, expressing my complete opposition to this event, and I was updating information almost every minute, completely shocked.
The next morning, I was shocked again. Why? Because the official Twitter account of Ukraine published an Ethereum address. My first reaction was how could a national government directly publish a trading address on Twitter? I suspected that Russian hackers had infiltrated Ukraine's Twitter account and then published an address controlled by Russia.
So I warned everyone on Twitter to be cautious, as this might be a hacker act, and not to trade casually. At the same time, I started contacting some people I knew, especially those connected to big cities, to confirm the authenticity of this address.
Later, I confirmed the authenticity of this address through a person close to the U.S. government and a Ukrainian team, and everyone can donate. I posted a second tweet to clarify my earlier mistake.
An hour later, my family messaged me saying, 'You know, now that you’ve made this decision, you might not be able to return to Russia later.'
At that time, I realized that not only was I witnessing this war, I had become deeply involved. Now, returning to my birthplace might mean facing significant risks, possibly even a sentence of 10 to 15 years.
At that time, I felt that I was no longer a child.
I was faced with a significant historical event, and I clearly chose my stance, not just regarding the war but also whom I support and oppose. This brought a huge change to my personal life. I started not knowing how to think.
At first, I donated some money to Ukraine, but a month later, I saw the news and learned that Russia had occupied a city, and innocent Ukrainians had been killed, possibly 500 to 1,000 people. That situation made me very angry.
So I decided to donate again, this time $5 million. This decision made me more resolute in my stance; my feelings were almost the same as on February 24.
War is common in history, but in our personal lives, such large-scale wars are entirely abnormal. This is our first time facing such a severe conflict. So in this situation, although initially there was some confusion about what to do, I knew that in such moments, those who need help should receive it. If good people do nothing, bad people will succeed. So I did my best to help Ukraine, as much as I could.
